The first few months of this year will prove critical to the proposed Denmark Aquatic Centre. By the end of February the Shire’s Project Team is expected to report to Council its progress towards recommending that Council give its in-principle support for the Aquatic Centre. A key element in this report will be the Director of Finance and Administration’s assessment of the impact that the proposal would have on future budgets and long-term financial planning.
In previous articles, we’ve looked into the capital costs of the facility and the annual recurrent costs associated with its operation, but we have not yet talked about the “opportunity cost”. What might we have to give up in future if we make a commitment to an aquatic centre now?
A crystal ball would be needed to anticipate what these future projects might be. Yet ratepayers can rest assured that there will be projects. Every year, Council is asked to support improvements to various sporting clubs, new cultural activities etc. It is a measure of a healthy community that imaginative people get together and press their causes – and a mark of a good Council to respond positively when it can. For example, in December, Council gave its in-principle support to meet up to one third of the costs of new clubrooms for the Bowls Club and the Surf Club.
Council usually succeeds in juggling its budget so that it can lend support to such projects … and the community is happy to leave the decisions to Councillors without really stopping to consider that they will nevertheless contribute to them through the rates.
In contrast, in the case of the proposed swimming pool we believe there will be an up-front proposition that Council will put to ratepayers. In essence, this will ask “are you willing to pay $x pa in additional rates in order to maintain an aquatic centre?” If and when this question comes from Council, ratepayers should pause and reflect on the Shire’s financial estimates for 2011/12.
The predicted budget revenue is $8.067M of which $4.264M will be collected in rates. Employee costs account for $4.242M – up $218k from last year’s budgeted amount. That increase alone is roughly similar to the lower estimate of the annual subsidy required for a 6-lane pool suggested in Council’s August 2011 deliberations (Item 8.2.2 quotes $240-357k).
The key point here is that under normal circumstances the ratepayers collectively absorb sums of this order without question – and certainly without the need for a referendum. Annual subsidies for swimming pools are in many ways similar to salary costs in that the benefits of the expenditure is shared across the entire community rather than to the exclusive benefit of any particular community group.
From this perspective, there is no need to fear that future projects will be any more constrained than they are now.
Caption. With apologies to The Castle …”Tell him he’s not dreamin’ Dad, tell him he’s not dreamin’.”
