Aquatic Centres are expensive both to build and run. In Bulletin #784 we estimated building costs of $7.9m for the Rolls Royce 8-lane x 25m, with leisure and hydrotherapy pools, and described a best-case scenario whereby the Shire might access grants covering all but $1.3m. What about the annual running costs in this case?
The community subsidises most recreational services via Shire rates. For example, in 2010/11, the Library received roughly $149k, the Youth Centre $176k and the Recreation Centre $260k. Similarly, even the best-managed Aquatic Centre would need an operating subsidy.
The Consultant [CCA] engaged for the Feasibility Study based his financial modelling on three different pool configurations and three usage scenarios for each. All estimates are framed in terms of a hypothetical ‘base year’ against which annual variations in population, user profiles, energy and staffing costs, periodic refurbishment etc may be compared and then adjusted over the lifetime of the facility.
To find the ‘worst case’ running costs we might take the base year for the most expensive capital build and the most pessimistic usage levels. If refurbishment is amortised annually the CCA model needs a base year subsidy of $334k for the 8-lane option. Shared equally this amounts to $89 per annum or $1.67 per week for “the average ratepayer” – less than a cup of coffee! Individual ratepayers may of course pay more or less, but across the board it’s an 8.4% increase in rates.
Improved patronage reduces the gap between user-pay income and the required subsidy. CCA suggested that, rather than the pessimistic usage numbers of 6 per annum per head of population, we should plan for a “realistic” patronage of 9 - in which case the base year estimate falls to $243k for the 8-lane pool ($64 per annum or 6.1% on the rates). More realistic entry charges also help of course … see for example the recent 5-10% increases at the Albany facility.
If we now include the repayment cost of a building loan (Bulletin #784), the total recurrent estimate becomes $2.25 per week ($117 per annum) per “average ratepayer” for the most expensive configuration and the worst attendance figures. This worst case estimate corresponds to 11.2% in the average rates … but it’s still less than one cup of coffee per week. Of course, it would roughly double in the absence of any grant assistance.
We will recommend that Council should stress-test the CCA estimates and develop more sophisticated financial scenarios. In the meantime we all need to think seriously about how far our desire for a pool is backed by a willingness to pay higher rates, so that we can let councillors know our views.
What level of rate rise would you be prepared to support – and have you told your Councillor?
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| The Mararet River pool has a shallow entry (lower left) leading into a 6.6x18m learn-to-swim area just right of centre which in turn leads to the main 8-lane 25m pool partly visible on the left |
Cyril Edwards, Vice-President, DACCI
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