SO—WHAT ARE WE GOING TO DO WITH THE SPLURJ MAHAL? PART 2

Community engagement

My main purpose in this post is to examine the options for the future of the YRCC that the Shire is asking us to consider.  But before I get to that, I want to take issue with a couple of aspects of the Shire’s ‘YRCC Community Engagement Plan’, as presented in SY014-02/17 Appendix B to Ms Haslehurst’s discussion paper (http://www.york.wa.gov.au/Profiles/york/Assets/ClientData/Document-Centre/Current_Ordinary_Meeting_Agenda/Appendices_-_SY014-2017_b.pdf).

First, I note that the period allotted for public comment on Ms Haslehurst’s discussion paper ends on 31 March.   The paper is only 21 pages long, but raises complex issues.   I wonder if three weeks will give people enough time to produce a genuinely informed opinion.   

Secondly, the proposal that councillors, shire officers and community members take a spin around the Wheatbelt to visit recreation centres in other shires has merit but as it stands is seriously flawed.

‘Stakeholders’

It privileges ‘Forrest Oval Advisory Group representatives’—i.e. selected members of sporting clubs that use the centre—over other members of the community by including them along with councillors and staff in what I take to be a quasi-official deputation riding to those centres in the community bus.

Recently, the Shire has been referring to those people as ‘stakeholders’, as though the rest of us ratepayers who pay for but don’t use the centre have a lesser stake or none at all in the YRCC’s fate.

By the same token, the proposal suggests emailing ‘users’ to invite them to make submissions and seek ‘expressions of interest to visit other venues’.

‘User’ or not, every ratepayer is equally a ‘stakeholder’ in the future of the YRCC.  If the Shire intends to email anybody, it should email everybody with the same message. 

And if representatives of the Forrest Oval Advisory Group want to visit recreation centres in the nominated towns, they should have to make their own way there like the rest of us. 

I must admit to having a queasy feeling regarding the Forrest Oval Advisory Group.  I tried to find out who belongs to it (apart from the Shire President, who chairs it), but found nothing on the Shire website to tell me.    On p. 12 of her discussion paper, Ms Haslehurst tells us that the group consists of ‘representatives of users of the complex’, but doesn’t say who they are currently or how they are selected.

If some of the members are who I think they might be, I’m not sure I would want to give them the opportunity to cosy up to councillors and staff in the community bus as it whizzes merrily from town to town.

Comparing apples with apples?

The shires chosen for comparison are surprisingly diverse in a number of important respects.  What follows is a rough guide based mainly on statistics gleaned from the DLGC’s My Council website. 

Those statistics are a tad out of date—they relate to financial year 2014/15, and those for 2015/16 won’t appear until next month—but I doubt they’ve changed much, except in the case of Narrogin where town and shire merged last year to form a new Shire of Narrogin with a population of around 4200.

1.              Goomalling: Area 1835 sq. km. Population 990. Electors 690. Full-time employees (FTE) 29.  Financial Health Indicator (FHI) a dismal 46 (the ‘pass mark’ is 70).  Rate increase 9% (compare state average of 8.47%).

2.              Merredin: Area 3294 sq. km.  Population 3287. Electors 2028.  FTE 47.  FHI a spectacular 97.  Rate increase 8%.

3.              Kellerberrin: Area 1916 sq.km.  Population 1221.  Electors 782.  FTE 27.  FHI a brilliant 94.  Rate increase 5%.

4.              Narrogin (before amalgamation):  Area 1618.  Population 883.  Electors 577.  FTE 18.  FHI a highly commendable 92.  Rate increase a menacing 11%.

5.              Katanning: Area 1518.  Population 4409.  Electors 2419.  FTE 63.  FHI a highly commendable 92.   Rate increase 8%.

6.              Kulin: Area 4717.  Population 807.  Electors 578.  FTE 39.  FHI a remarkable 93. Rate increase 7%.

7.              York:  Area 2132 sq. km.  Population 3486.  Electors 2461.  FTE 47.  FHI a mediocre 67.  Rate increase a mind-bending 16%.

To my mind, the shires most closely comparable with York are Merredin, Katanning and after last year’s amalgamation, Narrogin.  In terms of financial management, however, those shires appear to have been well ahead of poor old York if FHI and rate increase levels are a guide.  

Could this have something to do with the models they have adopted for the management of their leisure and recreation facilities?

Or in York’s case, is it possible that some kind of ‘dickhead factor’ came into play from which other shires have largely been exempt? 

Options

Section 4.0 (pp. 18-20) of Ms Haslehurst’s discussion paper puts forward five options for the centre’s future.   We are told that these options are based on ‘community and user feedback’, ‘expert’ advice from consultants, and ‘consultation with other local government authorities and state government agencies’.

Here is a summary of the options and my responses to them. 

Option 1: ‘Shire Operated’, i.e. business more or less as at present but with a more professional focus on management, marketing and developing the centre as a business and greater use of volunteers in fund raising for clubs.   This would involve vigorously promoting the centre as a venue for events and conferences.

A new scale of fees and charges would be imposed and the vexed issue of competitive neutrality tackled once and for all.

My response:  Several moves in the right direction, but as a veteran of such events I’ve yet to be convinced that the centre provides the right kind of environment for conferences, seminars and the like.   To start with, the acoustics are dreadful, the air conditioning erratic and the centre’s interior barn-like and uninviting.   The new scale of fees and charges for use of sporting facilities would have to be set very high to cover maintenance and repair costs like re-turfing greens and pitches.

Option 2: ‘Sportsman’s [sic] Association’, i.e. an association is formed from the sporting clubs to lease, manage and maintain the centre and its facilities, employ staff and so on.  The Shire would still be responsible for ‘loan repayments, depreciation and renewal of the asset’.

This was the model recommended by Domenic Carbone and Associates back in 2009.  My intuition tells me that it is the one favoured by Shire President Wallace.

My response:  Would being ‘responsible for renewal of the asset’ mean that every time the synthetic surfaces of the tennis courts or bowling greens should need replacing, ratepayers would be called on, as now, to bear the cost to the tune of hundreds of thousands of dollars?  I quite like this option, but only if the lessee is required to meet all the costs of maintenance and repair of sporting facilities and seek funding as necessary for renewing the asset from agencies other than the Shire.

Option 3: ‘Lease to a Single Club’, i.e. one of the sporting clubs assumes full responsibility for running the centre.

My response:  This option is about as risky as it gets, for all the reasons identified in the discussion paper.  Is there a club in York big or rich enough to take on such a huge responsibility and carry it out successfully?  I doubt it.   And if there were such a club, would other clubs and users be guaranteed to get a fair go?

Option 4: ‘Outsourced Management’, i.e. the Shire contracts with a commercial company to manage the entire Forrest Oval Complex.  This is the model used by the Shires of Merredin, Narrogin and Serpentine-Jarrahdale for the management of their sporting and leisure facilities. 

My response: Presumably, this kind of arrangement results in identifiable savings for the Shire, but I’m not entirely sure of what they might be other than in the area of staffing. 

Bear in mind that this is not a situation where the company pays to hire the facilities from the Shire, then profits by charging the public for the use of them.  Instead, the Shire pays the company to manage the facilities, and the company’s profits depend, one would suppose, primarily on that payment. 

Of course the parties might agree to share between them the proceeds of fees and charges, in which case the management agreement could turn out to be complicated indeed.

As Ms Haslehurst suggests, taking up this option would require careful analysis of costs and benefits.   At present, I’m not sure that the option would do much if anything to reduce the current burden on ratepayers, but I’m willing to be convinced.  The model seems to work for Merredin, though with regard to competitive neutrality it leaves that shire pulling business from the Oasis Hotel.

Option 5:  ‘Mixture of In-House Management and Outsourcing’ i.e. a management model incorporating features of other options.  This could involve, for example, the Shire leasing out the bar and gym ‘while continuing to be responsible for the sporting facilities’.

My response:  It strikes me that the tavern and gym are the only aspects of the centre that with good luck, skilled management and a following wind might offer a prospect of commercial viability sufficient to attract potential lessees (but I wouldn’t bank on it).  

But so far as the tavern is concerned, you’d still have the problem of competitive neutrality (is there a commercial gym in town?  I don’t think so).  It should be clear by now that in my view, the clubs should be responsible for sporting facilities, not the Shire.

First principles

So, what should we do with the Splurj Mahal?

Before we begin to answer that question, we need, I think, to face some unpleasant facts.

From the beginning, it has been an expensive and unprofitable failure.  

The project was poorly conceptualised, designed and managed and incompetently constructed.

The centre has done little for York’s sporting culture and the social fabric that supports it.  The clubs were better off where they used to be, taking responsibility for their own premises, raising funds through their own efforts and for the most part managing their own affairs.

It has cost ratepayers millions by way of capital expenditure and hundreds of thousands annually by way of loan repayments, maintenance, repairs, and ‘renewal of the asset’—like the recent premature re-turfing of the tennis courts.

It is used regularly by only a small fraction of residents and ratepayers.  Most of the people living in York would most likely never have set foot in the place.  This will be increasingly the case as the population ages and younger folk are drawn to the city.

But we’re stuck with it.  Even if an earthquake were to strike York, and the centre collapse into rubble overnight, we’d still be repaying the loans for years to come.

What to do, then?  In making that decision, we need to go back to first principles.  In my opinion, the most important of those principles is ‘user pays’. 

Many of us remember being assured by CEO Hooper and his ‘acolytes’ that the YRCC would cost ratepayers nothing because it would soon pay for itself.  In saying that, they more than once cited the ‘user pays’ principle.  That assurance, as we all know, was a furphy.

I think I know which option I prefer, but I’m going to keep my preference to myself for now.  I have reservations about all of them.

 'OZYMANDIAS' RAY CONTEMPLATES HIS LEGACY

"It's not the Splurj Mahal, you fool, it's THE HOOPERDROME!  Look on my works, ye ratepayers, and despair!"