Private Push for HILAC

The Hamilton Spectator – October 20, 2015

HAMILTON’S Indoor Leisure and Aquatic Centre could have more of its functions taken over by private businesses as Southern Grampians Shire Council voted unanimously for recommendations designed to stem mounting losses.

Councillors were presented in Wednesday’s meeting with a list of
‘key recommendations’ of a HILAC Enterprise Review, commissioned from external consultants by the Shire late last year.

Shire services director Bronwyn Herbert told councillors that the report had “looked at the governance and management arrangements and identified some operational and financial improvements that can be undertaken over the next several years: a five to 10-year timeframe”.

The report had recommended the shire develop a business unit, business case, and marketing and asset management plans to “substantially increase profitability” and achieve “council’s financial objectives”.

However, Cr Dennis Dawson successfully moved an amendment to delete a number of recommendations that would increase the shire’s involvement in running HILAC, and added recommendations to open up more of the facility to private businesses.

Community members and other stakeholders will now be asked to consider a proposal that the aquatic education programs be run by an external operator.

The report’s authors, Adelaide-based Tredwell Management Services, had already recommended that the Shire seek expressions of interest
for a new gym contract, as well as “additional leisure activities and dry sport provision (with the exception of basketball)”.

Cr Dawson said the amended recommendations were needed to
turn around rising costs and declining expense recovery rates.

“HILAC has 51 individual fees, it’s got a projected net cost of $1.3 million for the shire and if you include it with losses made from the pools it’s $2m all up,” he said.

“The expense recovery for HILAC has deteriorated from 2006/2007 from 82 per cent to 43 per cent in 2014/2015.”

Cr Dawson argued that the Shire, which owns HILAC, would not be able to significantly reduce costs for its own services because of regulatory and wage cost inflexibility, noting that the shire “employs 34 staff at a cost of $1 million” at the centre.

Cr Dawson said the report had provided the Shire with “an alternative structure” which “outlines quite clearly how $350,000 of that can be taken off right now.”

“Council should not be in the business of running HILAC programs,” he said.

“It cannot do so efficiently because of the nature of governments and the control required. And it cannot do so economically because of the wage structures that are in place because of council’s EBA and the number of staff that are there.”

Cr Dawson said HILAC received enough visitors for certain functions to be profitable for private operators that could more easily reduce their costs for staffing and service delivery.

“This centre is particularly well-used and the report tells us that almost a quarter of a million visitors go through per annum,” he said.

“I would suggest that if any business in Hamilton that had an average of 5000 people walking through the door (per week), it would make money.

“We cannot, and have not been able to make money out of this centre for 30 years, and there’s no indication in this report that we would be able to do so in the future, whatever management option was chosen.”

Crs Albert Calvano, Bruach Colliton, Paul Battista and Katrina Rainsford expressed qualified support for the details of Cr Dawson’s amendment.

Cr Dawson said he “agreed on every point” but said the main pool should remain a shire operation because its costs would be too high and it would be better to “subsidise” HILAC’s main facility and use a “hybrid model” of partial privatisation.

“We have gone down the pathway for good reason because this facility is starting to cost more and more in operation each year,” Cr Colliton said.

He also called for short-term improvements to the change rooms and general appearance of HILAC.

Cr Dawson had also moved that the food and beverage vendors at HILAC be put out to tender to increase “availability” as well as presentation and variety.

“With a potential average customer base of 5000 people a week, there must be an arrangement for (the café kiosk) to be run on a more commercial basis than present,” Cr Dawson said.
“It is presently limited in hours, both morning and evening, which are particular times of high use and it’s closed.”

Cr Colliton said “with the right people in there (the canteen) can certainly do quite well.

Cr Calvano said he was “for the motion” but felt “a little uncomfortable” that the shire had made a “break” with the original report and its consultation process with staff and community

“I feel a little uncomfortable that we don’t have the background. We should have more information,” Cr Calvano said.

Cr Dawson responded that his amendments were supported by material
provided in the enterprise review’s report.

Cr Rainsford said she was also in favour of the motion and if the changes were implemented it might result in a “more engaging, more useful experience”.

“I, too, think there should be an entrepreneurial and community ownership and involvement in the centre.”
Cr Rainsford said she was glad to see a recommendation for more vending machines removed and called for the shire to “recognise the significance of the basketball club to the history of the centre”.

Cr Battista backed the amendments and said he would “welcome community feedback on what is being proposed” and there were some short-term improvements to car parking, drop off points for children, and lighting that should be made.

“It is a very complex centre, there are a lot of sports that work out of the centre but I think for a long time we have had reports come to council on improving it and we have come so far with the centre and this is what we have to do for our ratepayers,” he said.

Cr Battista also backed a suggestion from Cr Rainsford that the shire copy other local governments that had slashed season pass fees to $99 to boost attendance.

“It’s important that we work towards making sure that everyone can be involved in (the centre) and it’s not too expensive for lower social economic areas to be able to have their sports and keep up their fitness and health,” Cr Battista said.