SUBMISSION - YRCC REVIEW DISCUSSION PAPER

 

The Chief Executive Officer

Shire of York

PO Box 22

York WA 6302

30 March 2017

By email to records@york.wa.gov.au

Submission—YRCC Review Discussion Paper

Let me begin by thanking the Shire for providing this opportunity for public comment on options for the future management of the YRCC.  In particular, I congratulate the author of the Shire’s review discussion paper on having comprehensively canvassed relevant issues and for having summarised important financial information that appears up to now to have been diligently withheld from the public gaze.

As you may know, I have written extensively on my blog The REAL Voice of York about a variety of issues pertaining to the origins, history and present situation of the YRCC.  While at times I may have been mistaken as to detail, the discussion paper has provided me with no reason to resile from the main thrust of my opinion. 

In short, I believe that the project was poorly conceived and designed, incompetently constructed, ineptly managed and from the beginning misrepresented as an enterprise that would result in beneficial outcomes for the York community as a whole but at no serious cost to ratepayers. 

Instead, the project has generally benefited only a minority of members of the community, especially those belonging to various sporting clubs, and the degree of that benefit is itself questionable.  It is at least arguable that from a social, self-reliance and fundraising standpoint, the clubs (with the possible exception of the Hockey Club, which seems to have done quite well out of the venture) may have been better off in their previous accommodation.

Cost

What is not arguable is that the YRCC has imposed a massive financial impost on ratepayers leading to huge rate hikes over several years that many ratepayers resent and are finding it hard to contend with.   It comes as no surprise to learn that as of February 2017 some 66% of current rates ($1,217,633) remain outstanding, along with 34% ($622,267) from previous years (see SY029-03-17, March OCM agenda, p.66).  

I read somewhere recently that the Wheatbelt is the most socially and economically impoverished region in WA.  These are certainly tough times for the people of York, who are required to pay rates of metropolitan dimensions in return for a much inferior level of public amenity than most metropolitan local governments are able to provide. 

Analysis of the Shire’s discussion paper reveals the great proportion of municipal funds that have been consumed by construction, repair and maintenance of the YRCC.  Meanwhile, roads and other projects have been sadly neglected, to the detriment both of residents and visitors to York.

Those developments have occurred despite the involvement of several expensive consultants (six according to the discussion paper, or seven counting the quantity surveyors Ralph Beattie Bosworth, referred to in the 2008 report of the ‘leisure consultancy’ A Balanced View as authors of a ‘concept plan’ for the project).  

Notwithstanding that involvement, the Shire seems never to have formally adopted a definitive business plan to guide and direct the management of the YRCC, or to have exercised restraint and commonsense in its approach to spending on the project.  

Optimism

Regretfully, I cannot share the optimistic view maintained in the discussion paper (p. 15) that the YRCC ‘has the potential to become a facility that the whole community can enjoy and be proud of and one that contributes to the economy’. 

While I agree—up to a point—that providing sporting and recreation facilities ‘is an investment in the health and well-being of a community’, I remain unconvinced that this particular ‘investment’ has contributed much to the physical, social or psychological welfare of more than a small fraction of York’s inhabitants, if indeed of those. 

On the contrary, I believe it has created anger and division in the community, imposed an unfair financial burden on the majority of ratepayers, and threatened, by including a tavern and restaurant among its facilities, the livelihood of local business people and their employees. 

I would venture a guess that the YRCC has played no small part in the decline of York over the past few years from a vibrant tourist attraction focussed mainly on the CBD to its present relatively drab and cheerless condition.

Above all, the discussion paper makes clear that the YRCC operates at a thumping loss, every cent of which is made up from the rates.   Health and wellbeing is one thing; systematic impoverishment of our community is quite another.

‘Convention Centre’

Significantly, the original master plan for the redevelopment of the Forrest Oval Precinct did not envisage the construction of a convention centre such as now purportedly exists.   The idea of having a convention centre was an afterthought, first put forward in a revised master plan cobbled together to meet the funding rules of the Country Local Government Fund.  The centre was supposed to seat 250 participants.  I think it would have difficulty accommodating fewer than half that number.

The discussion paper indicates that this facility could be ‘aggressively’ promoted both in the region and Perth as a locus for conferences, seminars and the like (conventions tend to be much bigger affairs). 

Perhaps it’s worth a try, but Perth is well provided with conference facilities, and our building as it stands is not an ideal conference environment.  The acoustics are poor, the air-conditioning problematic, the structure barn-like and uninviting, and the immediate proximity of a bar, while superficially attractive, could well pose an unwelcome distraction to participants and organisers alike.   

Perhaps the first two of those objections could be overcome—no doubt at the usual outlandish cost to ratepayers.

The Tavern and Restaurant/Café

A local government should not be operating a facility that takes custom from local business owners, who especially in these straitened times battle to make ends meet and provide employment. 

In the absence, as is usually the case these days, of a teeming flow of visitors to York, proprietors of cafés, pubs and restaurants have to rely to a great extent on local trade.  A facility like the tavern and restaurant is capable of making a big dent in the viability of their businesses.

This objection is compounded by the astonishing disclosure that ratepayers—including those business owners—are willy-nilly contributing to an operational subsidy that enables the facility in question to serve food and drink at discounted prices.  This has been justified on the basis that ‘full cost pricing’ will drive patrons away, forcing the Shire to increase the amount of the operational subsidy.  I invite the Shire to meditate on the topsy-turvy morality of that arrangement.

By what seems to me a process of creative accounting, the tavern and restaurant have been made in financial reports to show a small but persistent profit.  Unless I am greatly mistaken, this happy result is achieved to some extent by ignoring the full cost of employing staff. 

At present, the Shire employs a full-time Centre Manager on a scale of $72,361 to $78,128 and a part-time Catering Manager on a scale of $48,000 to $52,000 (figures taken from the advertisements for those positions, so they may be out of date).  I’m told that it also provides the Centre Manager with subsidised accommodation, the cost of which, if that is true, should be factored into the equation.  Casual staff are also employed at the facility.

On p.11, the discussion paper recommends that the Centre Manager should cease being responsible for bar management duties, which should then devolve to a new position, that of Bar Manager.  That, the paper argues, would leave the Centre Manager free ‘to attract bookings and develop programs’.  Maybe so, but some might regard such a step as an expensive move in support of a nebulous outcome—a move, moreover, that might reduce the profitability of the bar.

The discussion paper correctly observes (p. 7) that the principle of competitive neutrality applies only to local government businesses ‘where annual income exceeds $200,000’.  So far as I can tell, the tavern and restaurant do not generate that level of income, but that is hardly the point, especially given the unfair competitive advantage conferred on the enterprise by the Shire’s operating subsidy.

Options

My first thought on contemplating the options presented in the discussion paper was that something was missing.  Those are not the only options we should be asked to think about.

For example, we might consider, in the first instance, simply closing down the centre for a year or two pending the adoption of a detailed business plan based on sound principles and acceptable, as determined perhaps by plebiscite, to the whole community.  If nothing else, that would take some temporary pressure off the rates.  During that period, no money would be spent on upgrading or repairing sporting facilities, unless the sporting clubs themselves were to provide it. 

Which brings me to my most important point:  that whatever option is finally adopted, it should be governed as far as possible by the principle of ‘user pays’.  No operational subsidy from the rates, no upgrading of sporting facililities at ratepayers’ expense, no Shire funding of centre employees—only basic repair and maintenance of the fabric, and repayment of currently existing loan repayments, to be met from municipal funds.  Such an arrangement would best accord with assurances given to the people of York when the construction of the centre was first broached.

As for the options proposed in the discussion paper, I find it difficult to decide among them because they have not been costed, and information gleaned by the Shire from its visits to other recreation centres has not yet been made available.

Having said that, if I were forced to choose today, I would lean towards Option 2, the Sporting Association option, which effectively hands over responsibility for the centre and its facilities to an incorporated association formed from representatives of the sporting clubs.  

I would do so with this proviso, that while the Shire must retain responsibility for loan repayments and depreciation, it should not be responsible for ‘asset renewal’ to the extent of upgrading sporting facilities like tennis courts and bowling greens.  Such costs ought to be met from fundraising and where possible state and federal grants, not from the rates.

This arrangement, I believe, would encourage a degree of self-reliance and a proud sense of ownership conducive to the future success of the YRCC.

 If the sporting association decides, as would be its right, to continue with the tavern and restaurant, it should do so without any subsidy from the Shire that would give it an unfair competitive advantage over privately owned businesses.  The facility would have to survive on its own merits, perhaps with the help of volunteer workers.

In conclusion, I hope nobody will assume that I am hostile in principle to the provision by local governments of sporting and recreation facilities.  That is certainly not the case.  My argument is simply that ratepayers should always be assured that they are getting value for money, and that has not happened with regard to the YRCC.  

In my view, the money spent on the YRCC would have been better spent elsewhere, for example on the swimming pool, on cycle tracks, on the river banks and parks and on pleasant open spaces in various locations where families and their neighbours can play sport casually, run with their dogs and picnic or barbecue with friends. 

Those are facilities that almost everyone can enjoy at almost any time without having to be a member of a sporting organisation.  If a healthy and vibrant community is what you want—surely it’s what we all want—focussing on such facilities would be the best way forward.

James Plumridge