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18 June 2019

Memo to:             Mayor and Councillors

Memo from:         Governance Advisers

Subject:              Council 20 June 2019 – SUPPLEMENTARY ITEM

 

 

6.2.    Sports and Recreation Committee  - Fees and Charges: Supplementary Information                3 - 21

Document R10294

A report titled Sports and Recreation Committee – Fees and Charges: Supplementary Information is attached and provides further information and an alternative recommendation to the Sports and Recreation Committee recommendation - Fees and Charges relating to Sports and Recreation 2019/20 as noted at Item 6.2 in the agenda.

 

 

 

 

 

 


 

Item 14: Sports and Recreation Committee  - Fees and Charges: Supplementary Information

 

Council

20 June 2019

 

 

REPORT R10294

Sports and Recreation Committee  - Fees and Charges: Supplementary Information

     

 

1.       Purpose of Report

1.1     The purpose of this report is to clarify questions raised at the Sports and Recreation Committee meeting of 23 May 2019 and to provide further information on the fees and charges relating to the Brook Valley Holiday Park, and recovery from Premier Parks and Facilities.

1.2     To provide an alternative recommendation based on further information.

 

 

2.       Recommendation

 

That the Council

1.     Receives the report Sports and Recreation Committee  - Fees and Charges: Supplementary Information (R10294) and its attachments (A2157708, A2203637 and A2210534); and

EITHER

2.     Approves the proposed fees and charges as per Attachment 1 (A2157708) of Report 10236, effective from 1 July 2019, with the exception of the fees and charges relating to the Brook Camp.

OR

3.     Notes that further information has been received regarding the impact of not increasing fees for the Brook Camp; and

4.     Approves the proposed fees and charges as per Attachment 1 (A2157708) of Report 10236, effective from 1 July 2019, with amendments as follows:

a.       That the Brook Valley Holiday Park fees and charges increase by 20% excluding the fees for permanent residents; and

b.       That the fees and charges for Saxton Field Stadium have no increase for the 2019/20 year.

 

 

 

3.       Background

Brook Valley Holiday Park

3.1       In the report to the Sports and Recreation Committee on 23 May 2019, officers recommended increasing fees for the Brook Valley Holiday Park. This was because the current recovery rate (41% in 2017/18)) was not within the target set in the Revenue and Financing Policy (90-100%).

3.2       The reasoning behind the proposed increase in fees was to bring the revenue from the Brook Valley Holiday Park closer to the Revenue and Financing Policy target. The target is set for Motor Camps overall (Tahuna Holiday Park, Maitai Valley Motor Camp and Brook Valley Holiday Park). The overall result for Motor Camps in 2017/18 was 87% recovery from users, however the Brook Valley Holiday Park achieved a 41% recovery from users. This required a rates contribution of $342,470 in 2017/18.

3.3       The Committee raised concerns about the impact of an increase in fees by 20% on the permanent residents at the Camp and resolved to recommend that Council approve all the fees presented, except for the fees relating to the Brook Valley Holiday Park. The Committee resolved:

Recommendation to Council

That the Council

1.   Approves the proposed fees and charges as per Attachment 1 (A2157708) of Report 10236, effective from 1 July 2019, with the exception of the fees and charges relating to the Brook Camp.

3.4       A copy of the attachment referred to in the resolution above (A2157708) is provided as Attachment 1.

3.5       The above recommendation was based on advice given by officers.  Given the discussion at the Sports and Recreation Committee, officers are providing additional information and options for Council to consider, particularly bearing in mind the consequences for revenue.

3.6       Permanent residents (16 in total) were not consulted about the proposed fee increase, but given an increase would result in the residents having a higher rent, it is anticipated that residents would not be supportive of this increase.

3.7       For residents that are eligible for the Accommodation Supplement provided by the Ministry of Social Development, part of an increase in fees may be able to be offset by an increase in the amount of Accommodation Supplement available to them. The Accommodation Supplement is assessed individually and the impact will vary for each eligible resident.

3.8       The 23 May 2019 Sports and Recreation report identified that staff would give 30 days’ notice to users before fees increased. Given a decision to increase fees at the Brook Valley Holiday Park was not made by the Committee, staff have not advised the residents of a fee increase. If Council decides at the 20 June meeting that it does wish to increase fees for the Brook Valley Holiday Park permanent residents, staff propose that this fee increase should not occur until 1 August 2019 to enable residents to prepare for this change and make the necessary arrangements for this.

Premier Parks and Facilities Recovery

3.9       There was discussion at the Committee meeting regarding the recovery rate for Premier Parks and Facilities with a request for further information on the breakdown for recovery.

3.10     The Revenue and Financing Policy sets a recovery rate at 10-20% private recovery and 80-90% public recovery for premier facilities, which some of the Saxton Field facilities come under.

3.11     Premier parks and facilities include: Trafalgar Park (including Trafalgar Pavilion) Trafalgar Centre and Saxton Field (Saxton Oval, Saxton Field Stadium and Saxton Oval Pavilion).

4.       Discussion

Brook Valley Holiday Park

4.1       To assist Council three options are presented for the Brook Valley Holiday Park:

·    Option 1: Do not increase any fees at the Brook Valley Holiday Park.

·    Option 2a: Increase fees by 20% (all)

·    Option 2b: Increase fees by 20% (excluding permanent residents)

·    Option 3a: Increase fees by CPI (all)

·    Option 3b: Increase fees by CPI (excluding permanent residents)

4.2       Comment on each option is provided below. The fees resulting from these options are outlined in Attachment 2 (A2203637).

 

Option 1 Leave fees unchanged. Fees could be re-visited once the preferred management option for the Camp has been discussed. (A workshop is scheduled for July 2019 and a report will be brought to Council in December 2019.)

 

Option 2 (a) Was originally recommended by officers as the Brook Valley Holiday Park is not currently meeting the Revenue and Financing Policy targets  and this increase would begin the process to improve the recovery at the campground. A 20% increase would be reassessed each year until the camp is within the recovery target. This option was not supported by the Committee.

 

Option 2 (b) Proposes an increase in fees by 20% except for the fees for permanent residents at the camp. This is the recommended option and the fees for this option are set out in Attachment 3 (A2210534).

 

Option 3 (a) Increases the fees to keep up with the Consumer Price Index increases but does not make any adjustment to meet the Revenue and Financing Policy target.

 

Option 3 (b) Proposes an increase in fees by CPI except for the fees for permanent residents at the camp.

4.3       The amount of potential additional revenue for 2019/20 from fees varies depending on the option selected but is approximately as follows:

·    2 (a) Increase 20% (all): Additional income $41,000

·    2 (b) Increase 20% (excluding permanent residents): Additional income  $28,000

·    3 (a) Increase CPI (all): No additional income

·    3 (b) Increase CPI (excluding permanent residents): $900 less income

4.4       Permanent residents currently contribute approximately 28.2% towards the total income from fees at the camp. This would drop to approximately 25% if fees at the camp were increased by 20% for non-permanent campers only, or 27.8% if fees at the camp were increased by CPI for non-permanent campers only.

Campground price comparison 2018/19

4.5       The Committee also sought further information about pricing of other campgrounds in the Top of the South. These prices are presented below:

Location

Tent

Power

Cabin range

Nelson City Top 10

$20

$45

$77-$120

Tahuna Holiday Park

$19

$18

$93 - $164

Maitai Valley Motor Camp

$10

$16

$50 - $60

Collingwood Motor Camp

$30

$38

$59 - $140

St Arnaud Kerr Bay Camp

$18

$21

NA

Brook Camp

$10

$18

$48-$75

 

 

 

 

 

 

 

 

 

 

 

Premier Parks and Facilities Recovery

4.6       After further analysis of the activity’s recovery some miscoding has been identified and subsequently corrected.

4.7       This results in the overall result for Premier Parks and Facilities from 2017/18 changing from 31% (as reported to the Sports and Recreation Committee on 23 May) to 23%.

4.8       This change does not alter that actual recovery for the Premier Parks and Facilities group (23%) is greater than the target set in the Revenue and Financing Policy (10-20%).

4.9       It is possible to separate out Saxton Oval Pavilion and Saxton Field Stadium to determine the individual recovery as follows:  22% for Saxton Oval Pavilion, and 36% for Saxton Field Stadium.  This represents recovery greater than the policy, therefore no fee increase is proposed.

4.10     There is some analysis challenge resulting from grouping of activities within the Revenue and Financing Policy and the coding set up within the general ledger. Coding does not go down to the individual asset level for Trafalgar Park, Trafalgar Pavilion or Saxton Oval. It is proposed to amend this, which will provide better data for analysis and reporting in the future.

4.11     Therefore, the recommendations relating to Premier Parks and Facilities are:

 

Premier Facilities

Commentary

Recommendation

Trafalgar Centre

Within target range

Increase by CPI

Trafalgar Park

No individual ledger code

Increase by CPI

Trafalgar Pavilion

No individual ledger code

Increase by CPI

Saxton Oval

No individual ledger code

Increase by CPI

Saxton Oval Pavilion

Better than  target range

No increase

Saxton Field Stadium

Better than target range

No increase

 

4.12     The fees and charges that were presented at the 23 May Sports and Recreation Committee meeting proposed increasing the Premier Parks and Facilities by CPI, excluding the Saxton Oval Pavilion which was proposed as no fee increase. This remains the same in this report except that Saxton Field Stadium is now also proposed as ‘no increase’ (because analysis at the asset level revealed it was achieving better than target). 

5.       Options

5.1       There are a variety of options however officers consider that the main options are to adopt the recommendations put forward by the Sports and Recreation Committee.  Or, in light of the further analysis above, to increase the fees at Brook Camp by 20% excluding permanent residents (additional income from campground fees would be $28,000) and to adjust fees for the specific Premier Parks and Facilities as listed above in 4.11. 

 

6.       Next Steps

6.1       Once fees and charges are approved, facility managers and Sports users will be communicated with regarding changes to the fees for use. Staff will update the Council website and relevant booking forms to reflect the changes. Council’s Finance business unit will alter fees and charges in their systems.

 

Author:           Rosie Bartlett, Manager Parks and Facilities

Attachments

Attachment 1:    Fees and Charges from 23 May 2019 Sports and Recreation Committee meeting (A2157708)

Attachment 2:    Brook Valley Holiday Park options and fees (A2203637)

Attachment 3:    Brook Valley Holiday Park Fees 20 June 2019 (A2210534)

 

 

Important considerations for decision making

1.   Fit with Purpose of Local Government

Annual review of fees and charges enables Council to meet the current and future needs of communities for good-quality local infrastructure, local public services, in a way that is most cost-effective for households and businesses.

2.   Consistency with Community Outcomes and Council Policy

Approving amended fees and charges enables Council to carry out activities that are aligned with the community outcome “our infrastructure is efficient, cost effective and meets current and future needs”.

3.   Risk

 Fees and charges are reviewed annually and either adjusted in line with the Consumer Price Index or adjusted to reflect any changes in process and/or costs incurred to Council. If proposed changes are not approved the income generated from fees and changes may not cover actual costs incurred and result in a financial shortfall.  

There is some risk that the community may object to the changed rate or charge which may have reputational consequences. Council also has the ability to revisit fees and charges at any time, and they will be reconsidered in twelve months’ time.

4.   Financial impact

An estimate for fees and charges income based on past trends and the Revenue and Finance Policy is included in Council’s Long Term Plan.

5.   Degree of significance and level of engagement

This matter is of low significance because the Revenue and Finance Policy which provides guidelines for fees and charges has been set through the Long Term Plan. Therefore no engagement, feedback or consultation is proposed for this report.

6.   Inclusion of Māori in the decision making process

No engagement with Māori has been undertaken in preparing this report.

7.   Delegations

The matter was considered by the Sports and Recreation Committee as it has the following delegations:

Areas of Responsibility:

·        Recreation and Leisure Facilities and Services

·        Parks and Reserves

·        Note:  Saxton Field is a matter for the Saxton Field Committee

·        Note:  Greenmeadows Community Centre, Stoke Memorial Hall, and Tahunanui Community Centre are matters for the Community Services Committee

·        Note:  Heritage Houses and their grounds are matters for the Community Services Committee

·        Note: All powers relating to the Brook Waimarama Sanctuary Trust applications for further funding from the provision set aside in the Annual Plan 2017/18 are referred to Council

·        The Trafalgar Centre

·        Modellers’ Pond

·        Sports Fields

·        Swimming Pool Facilities

·        Campgrounds

·        Marina

·        All land and buildings relating to the areas of responsibility of the committee, including the acquisition, lease, sale or disposal, maintenance, management or development of any land or buildings

Powers to Recommend:

·    Any other matters within the areas of responsibility noted above.

Currently officers have delegated authority to set fees and charges.  For increases over CPI, officers are of the view that approval by Council is appropriate.

 

 

 


Item 14: Sports and Recreation Committee  - Fees and Charges: Supplementary Information: Attachment 1

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Item 14: Sports and Recreation Committee  - Fees and Charges: Supplementary Information: Attachment 2

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Item 14: Sports and Recreation Committee  - Fees and Charges: Supplementary Information: Attachment 3

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