DACCI supports shire's budget caution (#815)

Many people find numbers a bit boring and sometimes a bit scary.  Yet we can’t build bridges without them.  If you just want to cross the river, simply trust the engineers and stop reading here.  But if you are part of the decision making process and want to be informed, read on.

DACCI unreservedly supports the Shire President’s insistence on budget rigour (Bulletin #814).  This has been a prime concern of Council’s Project Team since it began work late in 2009.  So in the spirit of budget rigour, let’s get the numbers clear.

The Coffey Commercial Advisory estimate of capital cost was $8.173M.  In January this year the Shire gave a revised figure of $9.338M with annual running costs of $1.201M.  The latter included $461k to pay the mortgage and $308k put aside each year for a replacement pool 30 years hence.  Thus $769k would be needed each year to pay for a pool without staff, water or customers!

In response, DACCI developed several alternative models and used the same methodology to estimate capital and running costs for one of these - concept Plan A.  We found it should cost $4.828M to build and $297k each year to run including an annual mortgage of $83K.

 

These dramatic gains were achieved without changing the water configuration by halving the building’s footprint, delaying the pool replacement fund until the 25-year mortgage was paid off, a forward savings plan and opening up the funding possibilities to include sources other than the State government’s Community Sporting and Recreation Facilites Fund [CSRFF].

These funding assumptions, based on the Pinjarra experience (40% from State and 17% Federal sources) and a new Pool Reserve Fund (explained in earlier articles), allowed the required loan to be reduced six-fold.  The Reserve needs to be underwritten by the community’s readiness to pay whatever the eventual operating subsidy may be throughout the two and a half year planning and construction stage – i.e. $1.50 per week or $78 per year for the average ratepayer.  This amount happened to be 7% of last year’s average rate, but it is 6.5% of this year’s average.

The Department of Sport and Recreation’s advice that Council should plan for a maximum grant of 33% from the CSRFF rather than 40% (Pinjarra) implies a $335k gap in the Plan A capital works budget … but it’s hardly a Canberra black hole.  Other possibilities exist.  Neither the Shire’s nor DACCI’s capital funding estimates include a Royalties for Regions contribution.  Perhaps this self-imposed discipline needs to be revisited in the light of this year’s capital works budget includes RfR projects worth $2.876M for a range of other community projects.

Finally, while concept Plan A does involve moving the gym from one side of the basketball courts it’s not leaving the Rec Centre.  And with 50 new parking bays included in Plan A (35 already funded) you will be able to park when you have a swim. 

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

Committee's aims and methods 'misrepresented' (#814)

Robert Laing’s letter about DACCI (Bulletin 813) demands a response because it seriously misinterprets DACCI’s aims and modus operandi.

DACCI has never wanted a pool at “any cost.”  Our aim has always been to determine whether it is feasible to build and operate a pool tailored to the Denmark community’s needs, at a cost which the community is able and willing to bear. To this end we have always argued that councillors must have the most accurate information possible to enable them to make an informed decision. In responding to CCA’s Feasibility Report and the Finance Director’s Report, we saw it as our role to question dubious assumptions and challenge perceived errors in the interests of getting to the truth. We do not apologise for this.

The CCA Report and the Director of Finance’s Report certainly suggested that

“a pool would be very costly and ratepayers would face very significant increases in rates to build, run and maintain it” and invited the conclusion that a pool would be beyond the community’s means. However[CU1] , DACCI challenged a number of the key assumptions in those Reports, and has framed an alternative plan for a facility with a smaller footprint and reduced operating costs, which could be within the community’s means. A wealth of meticulous research underpins this plan and it merits due consideration.

We believe that there is strong community support for a pool.  The Denmark Aquatic Centre Association has a support base of over 850 families - more than half of the 1437 families normally resident in the community.  We have yet to see whether in-principle support translates into willingness to pay higher rates to make an appropriate facility a reality. However, we are confident that many ratepayers, knowing the significant benefits of a pool to the community, would support a rate increase.

It would clearly be unworkable for DACCI to build and maintain a pool for its members, as Robert Laing suggests. We would have no chance of securing grant funding, and it would anyway be unthinkable to embark on a major project to be managed long-term by volunteers.

When the joint Council/DACCI Project Team puts its final recommendations to Council, Council is likely to consider the projected costs to the community in a range of scenarios (dependent on projected capital and operating costs, possible income from grant applications and donations etc). Council is then likely to ask the community for its input on paying higher rates to support a pool. The final decision will be made by Council, taking account of that community input.

  

Wendy Edgeley, Secretary, DACCI Management Committee

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 [CU1]It would have cost $770k per annum to service the finance and replacement costs alone – that’s without even opening the doors