Beagle readers, Once again Mayor Innes has rolled out her stock standard response to the 50m pool saying today in a media release and yesterday in the Bay Post that “A 50-metre pool has been estimated to cost an additional $6.5 million to build, and an extra $300,000 each year to operate. When you consider that the Batemans Bay Pool already operates at a loss, an additional $300,000 is a significant impost to our community." Those figures come from the Otium Business Case that was put together for the first design we all saw long before the latest concept plans. The problem with these figures she quotes is that there is nothing other than the following that guides her and her fellow Councillors to the accuracy of these figures. It should be noted that a 50m pool has not been included for the following reasons:
There is a limited market for traditional 50m pools and the additional capital cost is substantial (estimated at $6.5m);
It would incur higher operating costs and deficits (estimated at between $260,000 and $305,000pa, ie an additional $2.6m to $3.05m over the first 10 years of operation); The Mayor and the Councillors have taken those figures on face value and parroted them off since. But when you point out that the Business Plan has a whole range of very questionable figures they don't dare think to question the above rhetoric. An Example: The Otium Business Case that says 127,276 will use the aquatic area every year which translates to 348 people in the pool every day of the year (2436 per week) paying $8.50 entry? Let’s look at Council’s spokespersons statement in the Bay Post today “In the past five years, 478,410 people visited our pools,” the council said.
“Narooma pool accounted for 45 per cent of visitors, Moruya 31 per cent and Batemans Bay 24 per cent. The total average visits per week over the past five years is estimated to be 887 in Narooma, 888 in Batemans Bay and 1154 in Moruya.”
What? By Council’s own figures Batemans Bay has an average of 888 per week? That is a long way short of 2436 estimated at the turnstile by Otium in their Business Case. They estimate an income from the pool alone of $1,090,349 in the first year with 2436 people per week, every week (not 888) paying $8.50. By Council’s visitation figures above the projected income will be $392,496. This is 221 people missing every day of the year - will they be coming to the waterslide, the kiddies pool and splash pool every single day ? Example 2: By Otiums Business Case they estimate there will be 56 people every day of the year paying $9.50 a time to go to the Council gym. There are six other gyms in Batemans Bay. Why is Council setting up in competition? In 2016 Liz Innes specifically told the Bay Post, whilst electioneering to be Mayor, "the council should not be in direct competition with its ratepayers in business". Example 3: The Otium Business Case says there will be 38,720 going to the theatre in the first year. Their theatre had a capacity of 450 (the latest is just 350). Otium estimated there will be twelve productions per year. For Otium's projected 38,720 per year to work it would require 3226 people per production. In a 450 seat theatre that would require a sell out performance for seven nights (or a sold out for 9 nights if the theatre was only 350 capacity). The Business Case also projected an average operational loss of $800,000 each year over a 10-year period looking at operating performance, visitations and net contribution. There is very little detail and certainly not enough to be able to substantiate any evidence that a 50m pool would cost $6.5m extra to build and $300,000 per year extra to run. The projected annual loss of the Centre also, and importantly, does not include a further $1.2m per year in depreciation. All up, according to the Otium Business Case on Councils website, the Aquatic and Performance centre is going to cost the rate payers a minimum of $2 million per year to operate even if the anticipated 2436 swimmers come each and every week, the 56 gym users come every day and every single performance is sold out. That is $2 million we don't have in our budget. Council will have to find that which means we have to find it and fund it. From Sth Durras to Akolele. The council say there are 25,442 rateable properties in the shire. That will see a need to extract out $78 per year from each and every property in order to run the centre. Just to run it. And even more if they don't come in the droves projected. That's just 21c per day folks. And according to Council just another 25c per day if you really do want that 50m pool. As you can see once you start to look at these figures the Mayor depends on to defend the justification for not having a 50m pool it all comes unravelled. The figures in the Business Plan, when you drill down, become highly questionable. So much so that Otium added this disclaimer to their Business Case (in part) Readers should be aware that the preparation of this report may have necessitated projections of the future that are inherently uncertain and that our opinion is based on the underlying representations, assumptions and projections detailed in this ‘point in time’ report. There will be differences between projected and actual results, because events and circumstances frequently do not occur as expected and those differences may be material. We do not express an opinion as to whether actual results will approximate projected results, nor can we confirm, underwrite or guarantee the achievability of the projections as it is not possible to substantiate assumptions which are based on future events The Business case also states: It should be noted that the financial model does not incorporate sensitivity analysis or depreciation at this stage. This will be done after the base case assumptions and preferred design option have been approved by Council. Further, once the preferred design option and financial modelling has been approved and finalised, an assessment of the economic impact of the facility should be undertaken by Council to support any applications for external funding.
Just in closing it might be of interest to readers to learn that the Business Plan that was given to the NSW Department of Sport seeking a $26m grant for the Centre has been requested from them by members of the community who would like to read in detail the figures that have been provided by Council showing the estimated costs, the running costs, the projected revenues and expenditures and the depreciation estimated over the life of the asset. Each time the NSW Department of Sport has advised it could provide a copy, even though parts would be redacted for Commercial In Confidence reasons, a third party (read here the Eurobodalla Council) has sought a measure to block the request as they do not want the public to see this business plan. That is your Council going out of its way to block you, the community, from looking at the business plan and seeing if you can afford to have a $51 million dollar aquatic centre that is now highly controversial, and an equally controversial performance space with three concept plans out for exhibition that the community are clearly objecting to in design and function. Until next Lei, Editor of The Beagle
Council's rhetoric is watery to say the least