Long Term Community Plan 2012-2022 - Hurunui District Council

Hurunui Community Long Term Plan 2012 - 2022
Service
Relevant
Community
Outcomes
Relevant Issues &
Constraints
Who benefits, and over
what period
Future Funding & Sustainability
Hanmer Springs
Thermal Pools
and Spa
The Council’s funding
the Hanmer Springs
Thermal Pools and Spa
(also known as the
Hanmer Springs Thermal
Reserve) function
contributes to the
Hurunui district being:
A place with a thriving
local economy:
- We are seen as a
good place to do
business, to live and
to visit
A place where our
traditional rural values
and heritage make
Hurunui unique:
- People have a range
of opportunities to
participate in leisure
and culture activities
- Our historic and
cultural heritage is
protected for future
generations
The Thermal Pool complex
is run as a department of
the Council and as such, the
use of the profits has certain
restrictions placed on it and
most of it must be in accord
with the Reserves Act. The
Pools is run as a business and
deliberately aims for increased
profits. The resulting profits
can amount to more than
needs to be spent on reserves.
All ratepayers living in the
Hurunui District benefit from
the Thermal Pools operation
in some way or other. Because
of the profits earned from the
Pools, these are used to offset
the amount of rates charged
to the ratepayer. All reserves
and operations run on reserves,
such as libraries, are funded
from the pools surpluses rather
than through direct rates.
Residents in the Hurunui
benefit from having the thermal
pools resource in the District
from a recreational point of
view. Residents have special
discounted rates to use the
pools.
The Thermal Pool complex
brings visitors and tourists into
the District which brings about
economic benefits to other
business operators.
Operational Costs:
-100% user charge as per the pools fee schedule.
Capital Costs:
- -Replacement of existing assets is funded
from the Hanmer Springs Thermal Reserve
surpluses.
- -Expenditure on new assets are generally
funded through an internal loan according to
Council’s internal financing policy.
- The Thermal Pools and Spa are funded 100%
by user charges and generate an annual
surplus for Council. Major capital works are
funded through the Thermal Pools and Spa
borrowing from the Council pursuant to
the Council’s Internal Financing Policy. The
interest rate set at:
- -2.5% above the Council’s external borrowing
rate
- Minor capital works are funded through the
Thermal Pools and Spa’s retained earnings.
The additional interest derived from the
internal financing to the Thermal Pools and
Spa ($25,000 per $1 million of borrowings)
provides a good return for the Council that
contributes toward lower rates.
Use of income derived from the Thermal Pools
and Spa:
- The Thermal Pools and Spa are situated
on a Recreation Reserve which has been
vested in the Council under the Reserves
Act 1977. Pursuant to the Reserves Act, the
Council is only able to apply any surpluses
derived from the Thermal Reserve to other
reserves administered by the Council. The
Council actively uses these surpluses to fund
the costs relating to other District Reserves,
Cemeteries, Public Toilets, and as the District
Library has been built on a Reserve, the costs
associated with the Library function is also
subsidised by the surpluses from the Thermal
Reserve.
- The pools and spa were expanded and
improved in a major upgrade in 2010. This
was funded by way of internal loan finance,
as per Council’s Internal Financing Policy.
The interest costs incurred by the Hanmer
Springs Thermal Pools and Spa creates
a distinct flow of income that is derived
from the use of the funds that the Council
is investing, rather than from the use of the
Recreation Reserve.
As a result, we now have two distinct streams
of income generated from the Pools and Spa
operation:
- one from internal interest, which the Council
uses to offset General Rates (in accordance
with the Council’s funding policies)
- and the other being on-going surpluses which
are used to fund costs relating the reserves
(as per the provisions of the Reserve Act
1977).
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