For those who were not able to live stream the Extraordinary Council meeting today regarding grant applications for the Batemans Bay Aquatic/Performance Centre here is the presentation of Jeff de Jager. Public Forum Submission - 29 August 2017
PSR17/050 CONSIDERATION OF BUSINESS CASES AND CONCEPT PLAN OPTIONS FOR MACKAY PARK PRECINCT REDEVELOPMENT
There are a number of aspects of the report before you that require further thought and information before any reasonable decision can be made.
You have before you an urgent recommendation to adopt Otium’s Option 1 over its Option 2 – according to the report you are given no other choice but you do have as many choices as you see fit.
To name just a few other choices -
Demand that before proceeding with this matter, you be given the opportunity to endorse or otherwise the (phantom?) Draft Pools Strategy on which Otium's plan is based
Make amendments to bring the proposal in line with the community's wishes, i.e. add a 50 metre pool,
Demand full costing information including estimates of depreciation and borrowing and/or any other funding arrangements or
Chuck it out altogether.
Sensible things for you to do at this meeting, if you feel you must proceed to make a decision, would be to introduce amendments to -
Insist that, before you vote, the estimated depreciation, borrowing and any other costs are made known so that you are not blind to the full consequences of the decision you are being asked to make
Assuming you are satisfied with the project’s affordability once full cost estimates are known, and only then, adopt Option 1 including a 50 metre pool in place of the 25 metre pool. This is the sensible and practical thing to do and is consistent with community wishes.
Include a condition that, should grants be obtained, the existing community centre and visitor information centre be sold as soon as practical when the new facility is available and that proceeds of the sales be used to reduce the loans for the new facility (It is noted in Otium’s business cases the operating costs of these facilities have been absorbed into the new facility).
Why this matter is considered urgent at this stage is puzzling.
While one of the two grant funds mentioned – this round of the Regional Cultural Fund - has a deadline of 4 September, it is only the first of four rounds and the other – the Regional Sports Infrastructure Fund - remains open without any published closing date.
3. Eurobodalla Aquatic Strategy
The recommendations in the report are based on Otium’s business cases for the two options, both of which are based on the draft Eurobodalla Aquatic Strategy which Otium was asked to develop but is yet to be adopted by council. The business case suggests Option 1 is in line with this unadopted strategy.
This draft strategy nominates the Narooma 50m pool facility to accommodate Eurobodalla Shire’s swimming carnival and event needs and describes the proposal in Batemans Bay as “a contemporary leisure centre facility mix featuring different programs, leisure, fitness and adventure water options, health and fitness facilities, retail, food and beverage and co-location with visitor information centre, community and arts and cultural facilities.”
The exclusion of sporting uses in Otium’s description of the proposed Batemans Bay facility seems at odds with Council’s wish to apply for a Sports Infrastructure Fund grant. The inclusion of a 50 metre pool to satisfy carnival and event needs of the northern most populous part of the Shire would help overcome this anomaly.
4. Grant Funding vs Council’s Contribution
While the Otium business cases spell out the capital costs estimated for the proposed facility, including additional costs for a 50 metre pool, the recommendation before you today does not identify the grant amounts being sought from either of the State funding sources or for that matter, from any Federal funds, not that any application can be guaranteed in advance.
It has been suggested that for Option 1, council might be seeking some $36 million in grant funding - $35 million from the Sports Infrastructure Fund and $1 million from the Cultural Fund - leaving a Council contribution of at least $10 million toward the total cost.
If the proposal has such merit and the state has such large amounts available, and any potential federal sources have yet to be identified, why would not Council seek larger grants to include the additional cost of a 50 metre pool and to more equitably cover the cost of the arts and cultural development?
5. Write Down Costs – Community and Visitor Information Centres
The business cases for the proposed development discount its ongoing operational expenses by the current costs of the Community and Visitor Information Centres and it assumed these facilities will be sold off to partially fund the new development but no mention is made of expected proceeds or perhaps capital write-downs that may be required. This information, at least in estimate form, should be known before you make a decision to proceed.
6. Depreciation and Borrowing Costs
It is also noted in the report before you “that as the quantum of grant funding, if awarded, is unknown, any requirement to raise loans is also unknown and cannot be quantified. Further, any additional depreciation for any structure can only be determined once final designs and construction costs are also known.”
The Otium business case clearly quantifies operating and capital costs for the various parts of the project and Council publishes tables used for the depreciation of various classes of infrastructure therefore depreciation can be easily estimated. Similarly, by deducting estimated grants from total capital costs, it is simple to identify the range of borrowings or internal funding that will be necessary (indicative TCorp interest rates are available following the $2 million loan for the purchase of the old bowling club site).
To suggest that such estimates cannot be made available until further details are confirmed is ludicrous and you should refuse to proceed until such estimates are made available for your full and proper consideration of the large commitment you are being asked to approve.
In an email to you on 21 August 2017, I provided some ballpark estimates – it’s not all that hard to do – I trust you have obtained updates since, and if so, these need to be documented in this recommendation to show how thoroughly you considered the issues before arriving at your decision.
You wouldn’t buy a new car known to be inadequate for all your needs solely on the basis of its list price without also knowing the dealer and statutory costs, its warranty arrangements, its operating and insurance costs and the financing arrangements, would you? This project’s capital cost is the equivalent of 1,000 $46,000 cars!
While it would be fantastic for Batemans Bay and the rest of the Shire to have the proposed development complete with a 50 metre pool, I urge you, please, to not decide to proceed before you are fully aware of the likely one-time and ongoing costs involved.
If more work needs to be done to ensure a fully informed decision, then so be it even at the small-fry risk of missing the first round of grants from the Cultural Fund.
Jeff de Jager