Minister opens Kulin aquatic centre (#809)

Here we go again.  Our energetic and effective Minister for Sport, Terry Waldron recently opened the refurbished Kulin Aquatic Centre.  It boasts a 25m lap pool, learn-to-swim pool, beach entry and a tiny tots pool.  The population of Kulin was 900 at the 2007 census and declining at 3.9% per annum.  In the same census, Denmark had a population of about 5,000 growing at 3.6%.

Yet here we are still waiting for Council to make up its mind whether it will support even an attempt to do something about it.  The growing sense of community frustration is evident to DACCI.  At times we feel as disheartened as you … but we see no alternative but to work within the constraints of the administrative process that typifies local government.

There is something that all community members can do whether or not they want a pool or not:   exercise that traditional Aussie sense of fair play.  Let be explain the issue I’d like you to judge.

When, at the end of January this year, the council administration finally gave its verdict on the Consultant’s Report (signed off in April 2011) it advised Councilors that the proposed Denmark aquatic facility would cost $1.2M annually to operate.  This total was made up of $432k for actual net day-to-day operating costs, $462k to service the required loan, and $308k to cover the eventual replacement cost (dressed up as depreciation allowance).  In other words, ratepayers would be required to pay $770k each year in finance and depreciation before even opening the doors.  It would be buying two pools:  one for now – one for later.

As explained in previous articles, DACCI’s Plan A calls for $214k net operating cost plus $83k to service the loan  - a subsidy total of $297k annually.  It follows normal business practice of treating depreciation as a cashless entity.  In other words, DACCI’s plan includes a replacement (depreciation) cost of $0: it is concerned with just one pool, not two.

The question of replacement is for future ratepayers.  In 25 years time the pool will be paid for.  At that time ratepayers may be asked whether they’d like to have the mortgage payments returned to them each year (reducing the annual subsidy to $214k) or perhaps be used to build a replacement reserve.

It has been suggested that whoever dreamt up the idea of buying two pools not one was clearly determined to sink both.  That’s as may be.  But there’s a matter of principle here for everyone to think about.  Which approach seems fairer to you? 

Let your Councilor know.

Cyril Edwards, DACCI, denmarkpool@gmail.com and http://www.denmarkpool.blogspot.com.

Let's bake a different cake (#808)

Two weeks ago we reported two of the essential features of DACCI’s concept plan:  compared with the original proposal,  this plan cuts building costs roughly in half ($5M rather than $9M) and running costs to about one quarter ($300k rather than $1.2M).

 

But there’s a third kind of cost – the opportunity cost – that often takes pole position in budget considerations.

Each year Council has to choose which of the many proposals before it can support.  As we’ve said before, DACCI strongly supports the diversity that is reflected in the community’s shopping list.   The imagination and enthusiasm that goes into these projects is an essential part of what makes Denmark tick socially.  Many of those that DACCI represents are also members of other clubs – golf, tennis, bowls, surf, footy etc. - and they agonise over the question “how do we have our cake and eat it?”

This is what “opportunity cost” is all about.  How does a community wanting to have its own pool avoid squeezing other projects out of the picture?  DACCI believes we simply bake a second cake  ... a different kind of cake from the usual one that’s sliced up each year.  Here’s the recipe.

Ratepayers contribute a fixed amount ($1.50 per week - $78 pa) in an additional rate and this money is quarantined from all other Council expenditure.  The usual annual competition for Council support is not affected … that’s fed from a different cake.  By quarantining the project from all other requests there is essentially zero opportunity cost.

Thus in all three of these major areas – building cost, recurrent cost and opportunity cost - DACCI has offered solutions that match our community profile.  (In a future article we’ll explain our solution to the last major problem i.e. how to replace the pool at the end of its working life.)

Although endorsed by the Shire’s own Project Team (on which DACCI serves in a 2:6 minority), the plan has yet to make it on to a Council Agenda.  Sadly, it won’t be considered at the next meeting (12 June) as we had hoped, it has been sent to third parties for comments and is now scheduled for July.

Remember … DACCI is not asking Council to build a pool now … we are simply asking for a commitment to try to make the pool a reality.  Once given, there’d still be lots of hard work to be done before the pool could become a reality … and DACCI is more than willing to contribute to that work.  But until this commitment is made we can do no more unless Council comes on board.

If you feel strongly about the pool, please contact your Councillor.

Cyril Edwards, DACCI, denmarkpool@gmail.com and http://www.denmarkpool.blogspot.com.