FUTURE MELBOURNE (FINANCE AND Agenda Item 5.6 …€¦ · priority to the North Melbourne...

Attachments: 1. Supporting Attachment 2. Public Interest Test for North Melbourne Recreation Centre and Melbourne City Baths

F U T U R E M E L B O U R N E ( F I N A N C E A N D G O V E R N A N C E ) C O M M I T T E E R E P O R T

Agenda Item 5.6

COMPETITIVE NEUTRALITY REVIEW 14 December 2010 Presenter: Graham Porteous, Manager Recreation Services

Purpose and background

1. The purpose of this report is to seek endorsement of the recommendations of the Public Interest Test for the North Melbourne Recreation Centre and the Melbourne City Baths.

2. Council is required to comply with the Victorian Government's Competitive Neutrality Policy 2000 (Neutrality Policy). The principle of competitive neutrality aims to ensure that significant government businesses and activities of councils do not enjoy any net competitive advantages simply as a result of their public sector ownership. The Neutrality Policy aims to ensure that government businesses operate on a fair and equitable basis.

3. During 2009-10 Maddocks Lawyers (Maddocks) were engaged to determine which of Council’s activities were ‘significant business activities’ for the purpose of the Neutrality Policy.

4. Maddocks identified all significant business activities across the organisation. It was recommended that immediate priority be given to the further analysis of the activities and pricing at the North Melbourne Recreation Centre and the Melbourne City Baths (‘the centres’), operated by Council’s Recreation Services branch.

Key issues

5. Management applied a cost-reflecting pricing model to determine the direct and indirect corporate overheads associated with the centres. It was calculated that both centres were being subsidised by Council and thus a Public Interest Test and information meeting were arranged in September 2010 to further consider pricing matters and the public policy objectives.

6. As part of the public interest test written submissions were invited from members of the public. One written submission, from a private sector competitor in the recreation industry, was received (see appendix 10 of Attachment 2).

7. The review by Maddocks (refer Attachment 2) concluded that it was not in the public interest to apply competitive neutrality cost-reflective pricing and measures to the operation of the centres as this would jeopardise the achievement of Council’s policy objectives providing affordable recreation services and the improvement of the health and wellbeing of the community.

8. The review also recommended that the pricing structure of the centres should continue to be reviewed, benchmarked and approved by Council each year.

9. A review of the memberships and pricing structure for all of Council’s community recreational facilities and services will be undertaken in 2011-2012 in order to continuously improve Council’s Active Melbourne membership model.

Recommendation from management

10. That the Future Melbourne Committee:

10.1. resolves not to apply competitive neutrality cost-reflective pricing to the operations at the North Melbourne Recreation Centre and the Melbourne City Baths following the Competitive Neutrality Review; and

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Attachments: 1. Supporting Attachment 2. Public Interest Test for North Melbourne Recreation Centre and Melbourne City Baths

10.2. notes that the operations and pricing structure of the centres will continue to be reviewed, benchmarked and approved by Council each year in order to successfully meet specific public policy objectives for the community.

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Attachment 1 Agenda Item 5.6

Future Melbourne Committee 14 December 2010

1

SUPPORTING ATTACHMENT

Legal

1. Legal advice has been provided as required in respect to the subject matter of the report.

Finance

2. The recommendation to not apply competitive neutrality cost-reflective pricing to the operations at the North Melbourne Recreation Centre and the Melbourne City Baths does not result in any additional financial implications.

Conflict of interest

3. No member of Council staff, or other person engaged under a contract, involved in advising on or preparing this report has declared a direct or indirect interest in relation to the matter of the report.

Stakeholder consultation

4. Council gave notice of the competitive neutrality public interest test by publishing an advertisement in the Age (28 August 2010) and the Melbourne Leader (31 August 2010). Notices were also placed in the Melbourne City Baths and the North Melbourne Recreation Centre. The advertisements and notices advised that Council was undertaking a public interest test to determine whether National Competition Policy and Competitive Neutrality Policy should be applied to its operation of the Melbourne City Baths and the North Melbourne Recreation Centre. It included an invitation to obtain a copy of a Discussion Paper, attend an information meeting, and 'have your say' by making a submission to Council.

Relation to Council policy

5. The management decisions regarding the Competitive Neutrality Review are in line with Objective 1.2.1 from Council Plan 2009-2013 "Support increased participation in physical activity through sport and recreation services". Council’s strategic direction for leisure and recreation are communicated primarily in the ‘Active Melbourne Strategy’. Other relevant policy documents include Empowering Young People: Young Peoples Policy 2010 – 2013, Disability Action Plan 2010-2013 and Children’s Plan 2010 - 2013. Further details on relevant public policy objectives for the Melbourne City Baths and the North Melbourne Recreation Centre are shown in Appendix 9 of Attachment 2.

Environmental sustainability

6. Environmental sustainability issues or opportunities are considered not relevant to this report.

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Maddocks

Lawyers 140 William Street Melbourne Victoria 3000 Australia

Telephone 61 3 9288 0555 Facsimile 61 3 9288 0666

[email protected] www.maddocks.com.au

DX 259 Melbourne

Melbourne City Council Public Interest Test for North Melbourne Recreation Centre and Melbourne City Baths

November 2010

Legal professional privilege attaches to this document. It contains legal advice on compliance with the relevant laws and is provided solely for the information of, and assistance to, Melbourne City Council

Interstate office Sydney

Affiliated offices around the world through the

[5640007: 7188163_5] DM#6177015 Advoc Asia network - www.advocasia.com

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Table of Contents

1. Introduction 3

2. Recommendations 4

3. Backg round 4

4. Current Arrangements and Competitors 5

5. Costing Analysis 8

6. Public interest Test 11

6.1 Process 11 6.2 Council's Policy Objectives 12 6.3 Options Considered 13 6.4 Submissions Received 16 6.5 Other Consultation Results 16 6.6 Impact on Policy Objectives 17

7. Conclusion 18

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1. Introduction

In 1995, the Council of Australian Governments agreed to the implementation of National Competition Policy (NCP) by entering into three inter-governmental agreements. One of these agreements was the Competition Principles Agreement. Clause 3 of the Competition Principles Agreement deals with competitive neutrality policies and principles.

The principle of competitive neutrality aims to ensure that "significant" government businesses, including significant business activities of councils, do not enjoy any net competitive advantages simply as a result of their public sector ownership. In other words, it aims to ensure that government businesses operate on a fair and equitable basis.

The Victorian Government's Competitive Neutrality Policy Victoria 2000 (CN Policy) sets out the Victorian approach to competitive neutrality. It emphasises the role of public interest considerations and the importance of consultation and transparency in this process. Responsibility for CN Policy rests with the Competitive Neutrality Unit within the Victorian Competition and Efficiency Commission (VCEC).

The Council of Australian Governments recommitted to the principles under the Competition Principles Agreement in 2006.

In December 2008, the Victorian Government released a revised statement of its policy as applying to local government, entitled National Competition Policy and Local Government. This restates local government's continued obligation to comply with NCP principles even after the discontinuation of NCP payments in 2005-06.

Implementation of CN Policy involves consideration of the following three key questions:

• Is the activity subject to CN Policy (ie is it a significant business activity?)

• If so, do the expected benefits of introducing a competitive neutrality measure outweigh the costs?

• If so, is that measure in the "public interest"?

Melbourne City Council (Council) has engaged Maddocks to assist Council complete the steps stated above.

In June 2010, Maddocks completed the first of the three steps, namely a report on the review of Council's activities to determine which (if any) were "significant business activities" for the purposes of CN Policy. In summary, the report recommended that Council consider the following as significant business activities:

• Venue hire, operation of child care centres, Family Day Care, provision of immunisation services to adults, baby capsule hire, ArtPlay, Melbourne City Baths (other than its 'recreational aquatic' activities), Royal Park Golf Course, North Melbourne Recreation Centre (other than its 'recreational aquatic' activities), Carlton Baths Community Centre (other than its 'recreational aquatic' activities), Kensington Community Recreation Centre (other than its 'recreational aquatic'

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activities), Skate Parks, Melbourne City Sports Program, visitor berthing at the Docklands Marina, operation of car parks, building consultancy services, Melbourne City Research, the Melbourne Visitor Centre, and the Melbourne City Tourist Shuttle.

The report also recommended that Council continue its assessment of the significant business activities referred to above for the purposes of CN Policy and, in doing so, give priority to the North Melbourne Recreation Centre, the Melbourne City Baths, the operation of childcare centres, ArtPlay and venue hire.

Following this, Council, with the assistance of Maddocks, has undertaken a public interest test on the North Melbourne Recreation Centre and the Melbourne City Baths.

This document constitutes Maddocks' report to Council on the results of this public interest test.

2. Recommendations

It is recommended that Council resolve as follows:

2.1 based on the public interest test conducted, it is not in the public interest to apply competitive neutrality cost-reflective pricing to the operation of the North Melbourne Recreation Centre or the Melbourne City Baths.

2.2 the operations and pricing structure of the North Melbourne Recreation Centre and the Melbourne City Baths should continue to be reviewed, benchmarked and approved by Council each year in order to successfully meet specific public policy objectives for the community.

2.3 as committed by Council, a review of the memberships and pricing structure for all of Council's community recreational facilities and services should be undertaken in 2011-2012 in order to fully integrate and continuously improve Council's membership model and associated Active Melbourne Strategy.

3. Background

First Implementation Step

Council recently completed the first of the three implementation steps for the purposes of CN Policy. Of relevance here, is that Council determined that the North Melbourne Recreation Centre (NMRC) and the Melbourne City Baths (MCB) be considered significant business activities.

Second Implementation Step

The second implementation step is to determine whether the expected benefits of introducing a competitive neutrality measure outweighs the costs. Competitive neutrality measures are only required to be implemented where the benefits to be realised from implementation outweigh the costs.

The competitive neutrality measure proposed for the NMRC and the MCB was cost-reflective pricing. This means that the costs of operating these facilities should be recovered over the medium to long term.

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Council was prepared to accept that the expected benefits of introducing this measure (eg increased market contestability and improved performance) would outweigh any potential costs (eg administrative 'transaction costs' involved in undertaking the costing analysis).

Third Implementation Step

This report details with the third and final implementation step, namely to determine whether the implementation of cost-reflective pricing to the NMRC and the MCB is in the public interest.

The first part of this step involved applying cost-reflecting pricing to the NMRC and the MCB to determine whether the centres were generating a ON surplus or subsidy.

If they were generating a CN subsidy, a public interest test was required to determine whether the implementation of the cost-reflective pricing was in the public interest.

This report first describes the current arrangements and the state of competition, and then the results of the costing analysis and the public interest test.

• Qualifications

The report is provided solely for the information of, and assistance to, Council in connection with its compliance with CN Policy. The report will not be given to third parties or reproduced (in whole or in part) in any published document without the prior written consent of the Council.

We have not made any enquiries other than those disclosed in this report. In preparing this report and in reviewing information made available to or obtained by us we have assumed:

the completeness and conformity to originals of all documents made available to us;

that all information provided to us or obtained by us is complete, accurate and up-to-date;

that responses to information requests have been true, complete and accurate and not misleading, except where we have noted otherwise because our enquiries have given rise to a contrary belief; and

that all persons who provided responses to information requests were competent to do so, except where we have noted otherwise because our enquiries have given rise to a contrary belief.

4. Current Arrangements and Competitors

Council currently owns and operates the NMRC and the MCB.

North Melbourne Recreation Centre (NMRC)

The NMRC opened in December 2009 with a new gymnasium and stadium in addition to the outdoor pool (that had been in this location for many years) following a redevelopment in conjunction with the North Melbourne Football Club.

It has an eight lane 25 meter outdoor lap pool, stadium, gym, café, function rooms and theatrette. It offers swimming lessons (both group and private), has various merchandise for sale (such as swimwear) and offers group fitness classes. Many of the areas are available for public hire and it also runs children's birthday parties for primary school-aged children.

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While the pool has been in its present location for a long time, the 'dry facilities' that now form part of the NMRC have been in operation for less than 12 months. The dry and wet facilities are adjacent to each other, rather than part of the one structure. The decision was taken to provide combined facilities to provide a diverse and efficiently run cluster of facilities. Council resolved in June 2009 to operate the facilities via an 'in house' management arrangement. This accorded with community preference expressed at the time via the North Melbourne Recreation Reserve Landscape Plan Advisory Committee for Council to manage any community facilities available within the reserve.

The NMRC achieved the Life Saving Victoria Platinum Pool award in February 2010. The Platinum Pool Program is a Life Saving Victoria initiative which recognises and commends commercial aquatic facilities that achieve a high standard in the provision of aquatic safety measures. The award is only given following rigorous assessment over a 12-month period. The facility must also undertake internal safety assessments every three months which are developed with Life Saving Victoria and are complimentary to the Royal Life Saving Society's Swimming Pool Safety Assessment.

The NMRC's business plan provides the following actions and deliverables:

• Action: Manage the NMRC as leaders in the stadium, fitness and aquatic industries, delivering high quality and innovative experiences.

• Deliverables: Manage the NMRC to a high standard in relation to safety; achieve high results in quality assurance inspections; introduce innovative financially sustainable programs; and implement Active Melbourne programs.

The NMRC's pricing structure is contained in Appendix 1 of this Report. The fortnightly direct debit fee is currently $20.99 and the annual fee is $545.50.

The NMRC's primary competitors are considered to be :

• Equilibrium Health & Fitness, 1 st Floor, 19-23 Errol Street, North Melbourne (Equilibrium).

Its website claims: " Equilibrium Health & Fitness is one of Melbourne's leading health and fitness providers. Our Member's only clubs are conveniently located at North Melbourne and Doncaster East. Offering state of the art facilities we cater for all ages and offer a broad range of programs and services such as group fitness, free weights and personal training. We provide a relaxed, social-able environment that encourages family and friends to train together."

Equilibrium charges the following:

- $43.90 per fortnight under a non-contractual arrangement (or under a 3 month contractual arrangement with an additional $99 joining fee).

- $39.90 per fortnight under a 6 month contractual arrangement with an additional $99 joining fee.

- $33.90 per fortnight under a 12 month contractual arrangement with an additional $99 joining fee.

A membership special as of November 2010 allows a member to join for 12 months for a total $625 up-front fee. This equates to $24.04 per fortnight.

It does not have any aquatic facilities.

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Equilibrium made a submission to Council as part of the public interest test process.

• Jetts Fitness, Level 1/shop 6, 750 Collins Street, Docklands (franchise).

Its website claims: "At Jetts, you don't pay for facilities such as steam rooms, pools, crèches and classes that you pay for at other clubs but never get time to use. Memberships start from $17.95* per fortnight for unlimited access to all clubs nationwide, half the price of the average gym in your area."

Its annual fee equates to $468. It also does not have any aquatic facilities.

There is also the Kensington Community Recreation Centre, corner Kensington Rod and Altona Street, Kensington, which is owned by Council and run by the YMCA. This has a pool and gym. It charges $29.30 per fortnight, which equates to $762 annually.

The NMRC's gym is small in size compared to its competitors. The NMRC's gym is approximately 150 square metres. By comparison, Equilibrium's gym is approximately 300 square metres.

Melbourne City Baths (MCB)

The MCB was first opened in 1860 and has continued to provide health and fitness services to the community for more than 140 years, an achievement that distinguishes it from any other health and fitness facility in Victoria.

The MCB has a 30 metre lap pool, a 15 metre teaching pool, gym, squash courts, and training and fitness studios. It offers swimming lessons (both group and private), group fitness classes, wellness sessions, and massage, and has various merchandise for sale (such as swimwear). It also runs a school holiday program and has a podiatrist practice and retail outlet and medical centre. It is housed in a heritage listed building.

The MCB's business plan provides the following actions and deliverables:

• Action: Manage the MCB as a leader in the health and fitness industry, delivering a high quality and innovative experience.

• Deliverables: Manage the MCB to a high standard in relation to safety; Achieve high results in Quality Assurance inspections; introduce innovative financially sustainable programs; implement Active Melbourne programs; continue to undertake capital improvement works that comply with Heritage Victoria requirements.

The MCB's pricing structure is contained in Appendix 2 of this Report. The fortnightly direct debit fee is currently $42.99 and the annual fee is $1,040.

The MCB's primary competitors are considered to be:

• Virgin Active, 138 Bourke Street, Melbourne.

It has a 25m pool, aqua lounge, plunge and spa (and one other location in NSW). Its website claims: "Virgin Active is a leading global health club with world class facilities, a fun and friendly environment with that great Virgin customer service and value for money. Virgin Active has over 170 clubs in the UK, Italy, Spain and South Africa and over 900 000 members."

Its fortnightly fee is $47.90.

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• Fitness First, with locations at QV, Melbourne Central and Bourke Street.

Its website claims: "At Fitness First we have over 91 clubs across the country with state of the art equipment, fully trained staff teaching the latest fitness classes and personal trainers on hand to help you meet your health and fitness goals. All this and the convenience to train at any of our gyms."

Its fortnightly fee is $59.90. It does not have any aquatic facilities.

5. Costing Analysis

As noted above, Council applied cost-reflecting pricing to the NMRC and the MCB to determine whether the centres were generating a CN surplus or subsidy.

General Comments

A costing analysis of both centres was undertaken for the 2009-2010 financial year. A spreadsheet was prepared for each centre, which included the following information:

• an income statement for the pool, which showed the direct revenue and operating costs;

• an income statement for the non-pool areas, which showed the direct revenue and operating costs; and

• significant business calculations.

The spreadsheets are contained in Appendix 3 (NMRC) and Appendix 4 (MCB) of this Report.

The income statements contained a comparison of the income versus expenditure to determine the operating surplus or subsidy. The significant business calculations contained the CN adjustments to determine the CN surplus or subsidy.

A description of the significant business calculations is provided below. This was undertaken by Council's financial staff within both the Recreation Services Branch and Financial Services Branch.

The significant business calculations were split into individual areas within each centre. These differed for each centre but, generally speaking, separated out the following:

• recreation swim component. This represented swims, swim membership and 10% of other memberships.

• aquatic education. This represented swimming lessons.

dry — health and fitness. This represented the gym and 70% of other membership. For MCB it also represented personal training.

• dry — group fitness or wellbeing. This represented fitness classes and 20% of memberships. For MCB, it also represented wellness sessions and massage.

• dry — stadium and court hire.

The percentage allocations for memberships were assigned based on Council's records of actual use of each of those areas, where 70% use was designated to gym activities, 20% use to group fitness activities and 10% use to swimming.

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For each area, a breakdown was provided for income, labour, recreation contractors, utilities and all other direct costs. There were separate utility invoices for the 'wet' and 'dry' areas, which assisted with the division of these costs. All other direct operating costs were apportioned in the same manner as for labour costs. This resulted in a direct net subsidy.

To this, corporate overheads were also then added. These represented cleaning costs (which were incurred under a 'whole of Council' contract) as well as other general corporate overheads comprising Human Resources, Information Technology, Financial Services, Customer Relations, Governance Services (being a 50% allocation of those overheads, which is consistent with a model developed by the Municipal Association of Victoria and reflects Council's other governance activities that would are not relevant to private businesses), Insurance, Legal Services (per employee cost), Procurement and Contracts Services, and Recreation Services Branch Management and Administration (10% of total annual costs).

Following this, CN adjustments were made. This represented both CN advantages and CN disadvantages. Adjustments were made either on the basis of income or labour drivers. The key advantages for which adjustment was made were recognising a return on assets and working capital, and tax and rates exemptions. The key disadvantages were the centralised cleaning contract, which resulted in higher costs than would otherwise have been the case for centres of this kind, and the higher labour costs, with Council staff being paid at least 20% above 'market' rates.

This led to a Total Surplus/(Subsidy), which included CN adjustments.

Then, a profit margin of 8% was applied to all areas excluding the recreational swim (ie as a further 'cost').

The final result was a Total Surplus/(Subsidy) including CN adjustments and profit margin.

Both centres resulted in a total CN subsidy of just under $1.14 million each. This was despite the MCB actually having an operating surplus. The main component of the subsidy was the return on assets. For NMRC, its revenue would need to increase by 162% to

- remove the CN subsidy. For MCB, its revenue would need to increase by 52% to remove the CN subsidy.

More detailed information on each centre is set out below.

Application to the NMRC

The NMRC opened in December 2009 and so was only in operation for 7 months to the end of the financial 2009-2010 year. As a result, Council annualised the figures by including estimated figures for the period July to November 2009 based on the 2010 budget figures for this period less the CPI adjustment (ie the 2010 budget figures were discounted by the CPI factor of around 3%). This actually had the effect of amplifying the CN subsidy.

The individual significant business calculations for the NMRC were split into recreational swim (swim, swim membership and 10% of club membership); aquatic education; dry- health and fitness (gym, 70% of club membership); dry — group fitness (fitness classes, 20% of club membership); dry — stadium hire, competitions, events; pool café, merchandise, vending; arid pool events and other.

From an operating perspective, its revenue was $702,002, with expenditure of $1,253,954, resulting in a deficit of $551,951 (based on estimated costs for July-November 2009 to make up the complete 2009-2010 financial year). Allocated corporate overheads of $425,054 were then added. This meant the Net Subsidy excluding CN adjustments was $997,005. The CN advantages totalled $338,654 and the CN disadvantages totalled $226,793. As a result, the Total Surplus/(Subsidy) including CN adjustments was $1,008,864. This was then adjusted

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to remove the recreational swim component: $1,087,073, but a profit margin of 8% was then applied ($50,028). This resulted in a CN subsidy of $1,137,102. See Appendix 3.

To offset the Adjusted Total Surplus/Subsidy including CN Adjustments & Profit Margin of $1,137,102, the NMRC's total revenue would need to increase by 162%.

Application to the MCB

The individual significant business calculations for the MCB were split into recreational swim (swim, spa/sauna, swim membership, 10% of all other memberships and hire of pool facility); aquatic education; dry- health and fitness (gym, personal training, 70% of all other memberships); dry — wellbeing (fitness classes, wellness sessions, massage, and 20% of all other memberships); squash, tennis/netball court hire; locker hire, towel hire, merchandise and vending; school holiday program; and commercial lease of part of building (ie shoe shop and medical centre).

From an operating perspective, its revenue was $2,195,826, with expenditure of $2,156,265, resulting in a surplus of $39,561. This compared to the NMRC, which had an operating deficit of $551,951.

Allocated corporate overheads of $925,103 were then added. This meant the Net Subsidy excluding CN adjustments was $885,542. The CN advantages totalled $938,162 (as compared to $338,654 for the NMRC) and the CN disadvantages totalled $703,172 (compared to $226,793 for the NMRC). The difference between the disadvantages and advantages was $234,990 (which is added to the CN price). As a result, the Total Surplus/(Subsidy) including CN adjustments was $1,10,532 (compared to $1,008,864 for the NMRC). This was then adjusted to remove the recreational swim component: $1,112,267 (compared to $1,087,073 for the NMRC), but a profit margin of 8% was added ($27,586). This resulted in a CN subsidy of $1,139,753 (only $2,000 more than the NMRC, which had a CN subsidy of $1,137,102). See Appendix 4.

To offset the Adjusted Total Surplus/Subsidy including CN Adjustments & Profit Margin of $1,139,753, the MCB's total revenue would need to increase by 52% (compared to 162% for the NMRC).

Interestingly, while the MCB had a positive operational position, its overall CN subsidy is not significantly different from the NMRC's, which had both an operational and CN subsidy. This was due to the high corporate overheads ($925,103) and significant return on fixed assets ($648,941).

Certain areas within the MCB achieved CN compliance, even after the profit margin of 8%, namely Dry — Wellbeing (12% return); Squash, Tennis/Netball Court Hire (11% return); Locker Hire, Towel Hire, Merchandise and Vending (18% return); School Holiday Program (48% return).

Observations

After the application of CN cost-reflective pricing, both centres require a significant CN subsidy. To remove this subsidy, the revenue of the NMRC would need to increase by 162% and the MCB's revenue would need to increase by 52%.

This suggests that the implementation of the CN measure could compromise other public policy objectives in relation to the provision of these facilities. As a result, a public interest test was conducted in order to consider fully the case for not implementing cost-reflective pricing.

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6. Public Interest Test

The public interest test proceeded on the basis that it should:

• clearly identify the policy objective (which had Council endorsement);

• demonstrate that the achievement of the policy objective would be jeopardised if the CN measure was implemented; and

• determine the best available means of achieving the overall policy objectives, including an assessment of alternative approaches (eg rebates, reduced general rates and charges etc).

Set out below is a description of the public interest test process undertaken, Council's policy objectives, the options considered, the submissions received, other consultation results and an analysis of the impact on the policy objectives if the CN measures was implemented.

6.1 Process

The public interest test involved a number of stages, which are described below.

Public Notice

Council gave public notice of the public interest test by:

• publishing an advertisement in the Age (28 August 2010) and the Melbourne Leader (31 August 2010) (refer to Appendix 5); and

• posting notices in the centres (refer to Appendix 6).

The newspaper advertisements advised that Council was undertaking a public interest test to determine whether NCP and CN Policy should be applied to its operation of the NMRC and the MCB. It included an invitation to obtain a copy of a Discussion Paper, attend an information meeting, and make submissions to Council.

The notices posted in the centres were designed to be 'eye-catching' in an attempt to generate interest. They noted that Council was examining the operation of the centres and referred to the availability of the Discussion Paper and the opportunity to attend the information meeting and 'have your say' by making a submission to Council.

Discussion Paper

A Discussion Paper was prepared for distribution to those seeking further information (refer to Appendix 7).

The Discussion Paper explained that Council was undertaking a public interest test to determine whether CN Policy should be applied to the centres. It set out Council's policy objectives and information on the current operation of the centres and provided possible alternatives for discussion.

It invited people to attend an information meeting and make submissions to Council.

Information Meeting

An information meeting was held on 9 September 2010 from 5.30pm to 7pm in the Council meeting room at the Melbourne Town Hall. This provided an opportunity for people to hear more about the public interest test process and engage in discussion.

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A copy of the presentation made at the information evening is contained in Appendix 8. The presentation highlighted that the purpose of the information meeting was to discuss the current operations and alternatives for the centres. It also outlined the process following the information meeting, including the ability to make written submissions to Council by 24 September 2010.

A number of Council staff attended this information meeting, which was facilitated by Maddocks. The only other attendee was the owner of Equilibrium.

Fitness Australia and the VCEC were both aware of the information meeting but did not send any representatives along to attend.

6.2 Council's Policy Objectives

Traditionally, local government has provided a range of facilities for their communities, including leisure centres. These facilities were provided for the 'public good', ie improving the quality of life in a community. This is relevant here, where both pools have been in place for many years.

Corporate and Recreation Goals and Objectives

Council has a well-integrated service planning and development process that ensures services respond to community need, and are managed effectively and responsibly. Council recognises that, because it is a capital city municipality, it has to respond to a diverse and unique range of service, program and facility needs and expectations.

Under the Local Government Act 1989, one of the objectives of Council is to improve the overall quality of life of people in the local community. Council's functions under that Act include planning for and providing services and facilities for the local community, and providing and maintaining community infrastructure.

Future Melbourne is the community's vision for the management, development and direction of the City of Melbourne to 2020 and beyond, replacing the former "City Plan". Future Melbourne is the vision behind Council's actions during the next decade, as the Melbourne community collaborates in steering our city towards a bold, new, sustainable future. One of the goals in the Future Melbourne plan is: "To improve the physical and mental health and wellbeing of residents in the municipality."

Council Plan 2009-2013 is Council's statement of vision, mission, goal and objectives for the current term in office. It has a medium term outlook while the Future Melbourne Plan has a long range view. For the first time this Council Plan integrates Council's Municipal Public Health Plan obligations as per the Public Health and Wellbeing Act 2008. A key objective in Council Plan relating to health and wellbeing is "Support increased participation in physical activity through sport and recreation services."

Council's response to this strategic direction, in terms of leisure and recreation, is communicated primarily in the 'Active Melbourne Strategy'. This document reflects not only the findings from the consultation conducted as part of the project, but also strategic directions identified in other corporate planning documents. These documents include:

Title of Policy Document Relevance to Recreation Goals and Objectives (Aims/Strategies/Objectives/Outcomes)

'Empowering Young People: Young Peoples Policy 2010 - 2013

> Goal 2 — Healthy and Active Young People

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Title of Policy Document Relevance to Recreation Goals and Objectives (Aims/Strategies/Objectives/Outcomes)

'Disability Action Plan 2010- 2013'

> Further enhance access to park and recreation activities for people with disabilities.

'Children's Plan 2010 - 2013' Theme 3 — Healthy Children > Theme 6 — Services and Infrastructure

Specific Public Policy Objectives relating to the NMRC and the MCB

In the 'Active Melbourne Strategy' Council has developed a number of public policy objectives/goals to guide the provision of its leisure and recreation services and programs. These are defined in relation to:

• Planning & Policy • Place • Promotion • People • Provision.

Appendix 9 of this Report explains these public policy objectives and shows how they translate into services and programs at the NMRC and the MCB.

For example, they result in:

• providing a range of services and programs that responds to the needs of the 'catchment' for the centres, including programs that cater for special needs and minority groups;

• a pricing structure that encourages participation in aquatic health and wellbeing activities, recognises the requirements of special needs groups and represents 'value for money' based on industry benchmarks;

• a range of programs and activities that are provided and/or developed in conjunction with community groups, agencies, sporting and recreation associations and commercial operators;

• health and wellness service and program 'packages' that are provided in collaboration with a range of provider partners; and

• having a level of staffing that can respond to site-specific service and safety requirements and community expectations.

The growing residential population will further increase the need for these facilities and services in the inner city to provide a broad range of community level programs. The diversity of facilities, programs and services ensures that there are opportunities for participation that serve a wide variety of interests, ages and abilities.

6.3 Options Considered

In considering the best available means of achieving the overall policy objectives, a number of options were considered. These options were chosen to see if the CN subsidy could be removed and so achieve compliance with CN Policy. They were:

• reducing the opening hours;

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• charging the same price for all memberships (at the adult rate);

• charging the same price for all casual swims (at the adult rate); and

• for the NMRC, closing the pool at the end of March rather than the end of April, and reducing the lifeguards on duty to Lifesaving Victoria minimum ratio requirements.

Implementing these options would result in some cost savings, in the order of 11% for the NMRC and 19% for the MCB, although there were also disadvantages associated with them. The option of increasing fees was also canvassed.

More detailed information on each centre is set out below.

In addition to these options, the possibility of contracting a private provider to operate the centres instead of Council was also canvassed. However, in Council's experience, Council facilities that are contracted out have a similar level of deficit funding provided to them. This can be seen in the other Council recreational facilities operated by the YMCA. For example, the Kensington Community Recreation Centre had a budgeted 2009/2010 deficit of $480,000.

While an external operator may be able to reduce some of the costs, Council would also have to pay the operator a management fee. This could be in the order of 16%, based on Council's dealings with the YMCA. As a result, it is to difficult to quantify the effect of outsourcing the operation of the NMRC and the MCB.

North Melbourne Recreation Centre (NMRC)

The specific subsidy reduction options considered for the NMRC were as follows:

• reducing the opening hours (so that the centre would close one hour earlier on Monday to Friday): $7,389 saving.

• reducing the lifeguards on duty to Lifesaving Victoria minimum ratio requirements: $29,626 saving.

• closing the pool at the end of March rather than the end of April: $32,995 saving.

• charging the same price for all memberships (at the adult rate): $4,940 saving.

• charging the same price for all casual swims (at the adult rate): $35,846 saving.

Implementing all of these options would reduce the total subsidy from $1,137,102 to $1,026,306 (ie a total $110,796 cost saving). This is just under an 11% difference.

While these options can reduce the subsidy, it is considered that this is not particularly significant. Furthermore, there are a number of disadvantages associated with these options. Reducing lifeguard ratios would have serious risk implications and potentially affect Council's rating for insurance premiums. There would also be a cost to Council in implementing a reduced season for the NMRC (by a month). Removing the concessions and discounts, and charging the same adult price for all memberships and casual swims, has implications for both access and equity.

Fee increases were also considered as a means to reduce the CN subsidy.

To achieve CN for each area (other than the pool café, merchandise and vending), fees would need to increase as follows:

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• recreational swim: 258%. This means that the cost of a swim would go from $4.60 to $16.47. This compares to around $4.50 for a swim at other Council centres run by the YMCA and at centres run by the City of Yarra (based on the LG Price 2009- 2010 Fees and Charges Survey, which benchmarks the fees and charges of all Victorian councils).

• aquatic education: 97%. For example, a 30 minute private swimming lesson would go from $55.99 to $110.30.

• dry- health and fitness (including the gym): 210%. So, a casual adult gym pass would go from $16.50 to $51.15. By comparison, the City of Yarra equivalent is $19 (based on the LG Price 2009-2010 Fees and Charges Survey). The cost of membership would go from $545.50 to $1,691.05, well beyond what its competitors are charging (Jetts Fitness: $468 and Equilibrium: $570).

• dry — group fitness (including fitness classes): 82%. For example, a casual adult group fitness pass would go from $16.50 to $30.03.

• dry — stadium hire: 29%. For example, a basketball court hire (per hour per court) would go from $45.99 to'$59.33.

• pool events and other: 129%.

If Council did increase fees, there is likely to be an associated decrease in usage as a result (eg fewer members and casual users), which could result in a greater cost subsidy by Council.

It also needs to be noted that the figures are based on its first year of operation (on an extrapolated basis), and that its operating position is likely to improve over time — with labour costs being reasonably fixed, any increase in memberships and casual use should see a reduction in the operating deficit.

Melbourne City Baths (MCB)

The specific subsidy reduction options considered for the MCB were as follows:

• reducing the opening hours (so that the centre would close two hours earlier on Monday to Thursday, ie at 8pm not lOpm): $43,493 saving.

• charging the same price for all memberships (at the adult rate): $156,233 saving.

• charging the same price for all casual swims (at the adult rate): $17,306 saving.

Implementing all of these options would reduce the total subsidy from $1,139,753 to $922,721 (ie a total $217,032 cost saving). This is approximately a 19% difference, which is more significant than for the NMRC (at around 11%). However, there are again a number of disadvantages associated with these options. Reducing the operating hours would place the MCB at a disadvantage compared to its competitors (only one of which closes at 9pm, the others closing at lOpm). Removing the concessions and discounts, and charging the same adult price for all memberships and casual swims, has implications for both access and equity.

Fee increases were also considered as a means to reduce the CN subsidy.

To achieve CN for each area (other than those which already do so), fees would need to increase as follows:

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• recreational swim: 156%. This means that the cost of a swim would go from $5.50 to $14.08. This compares to around $4.50 for a swim at other Council centres run by the YMCA and at centres run by the City of Yarra (based on the LG Price 2009- 2010 Fees and Charges Survey, which benchmarks the fees and charges of all Victorian councils). So, it would be well above the usual cost of a swim and would make swimming out of reach for most, if not all, users.

• aquatic education: 15%. For example, a 30 minute private swimming lesson would go from $55.99 to 64.39.

• dry — health and fitness (including the gym): 40%. So, a casual adult gym pass would go from $19.95 to $27.93. By comparison, the City of Yarra equivalent is $19 (based on the LG Price 2009-2010 Fees and Charges Survey). The cost of membership would go from $41.99 to $58.79. This is more than one of its competitors (Virgin Active) but only $1 less than its other competitor (Fitness First).

If Council did increase fees at the MCB, there is likely to be an associated decrease in usage as a result (eg fewer members and casual users), which could result in a greater cost subsidy by Council.

6.4 Submissions Received

Council received one written submission from the owner of Equilibrium (refer to Appendix 10).

Equilibrium's owner also attended the information meeting and participated in discussions.

Equilibrium is concerned with the pricing structure for the NMRC and submits that Council should increase its price to a level that is consistent with other facilities, being in the range of $36 per fortnight. The NMRC currently charges $21 per fortnight.

While Council is to have regard to this submission for the purposes of the public interest test, it is important to note that Council must not enter into any arrangement with a competitor in relation to price. This is strictly prohibited under the Trade Practices Act 1974 (Cth) as illegal price fixing.

Equilibrium contends that it has lost 200 members since the NMRC opened in December 2009. It did not want to prevent Council from operating leisure facilities but it was concerned that the NMRC was having a detrimental impact on its business through its low prices.

It felt that Jetts Fitness at Docklands was not a fair comparison as it was deliberately a 'no service' facility. It said that the NMRC was 30% cheaper than Equilibrium and yet had more facilities and services.

It contended that a better way for Council to meet its public policy objectives was to offer discounts to students, pensioners etc. On this point, it is noted that Council has a policy position on discounts for recreational services and this will be reviewed in 2011-2012 as part of the review of the Active Melbourne Strategy.

Equilibrium did not comment on the operation of the MCB.

6.5 Other Consultation Results

Council's Recreation Services branch has compiled a report that indicates their performance against set key performance indicators (refer to Appendix 11). This shows that Council exceeded the targets set in the following KPls:

• community satisfaction rating for Council-owned recreational facilities;

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• annual Royal Live Saving Safety Audit rating at the MCB; and

• overall customer satisfaction rating with the MCB.

When planning for the redevelopment of the NMRC, the current option of in-house Council management was considered the best model. This was thought to provide a better funding model, allowed Council to closely monitor facility operations, was consistent with community feedback in relation to having direct Council oversight of the facilities and was directly integrated with the North Melbourne Football Club (these views were expressed via the community representatives to Council through the North Melbourne Recreation Reserve Landscape Plan Advisory Committee).

Council conducts an annual survey of its members at the MCB (refer to Appendix 12). The results of the 2010 survey show that there was a strong level of confidence in Council to deliver the services required (over 87% saying they had either a lot or complete confidence), with over 90% recommending or strongly recommending the MCB to family and friends.

It also provides information about the MCB members who completed the survey. The majority were female and aged between 26 to 45 years old. The most common membership type was Club (83.5%), followed by Aquatic (11.8%) and then Living Stronger (4.7%). The vast majority worked nearby (over 70% within 2km) and a large number also lived nearby (over 42% within 2km). Of those surveyed, over 90% would recommend or strongly recommend the MCB to family and friends. The most used services were the gymnasium (70.4%), group fitness classes (39.6%) and lap swimming (30.8%).

6.6 Impact on Policy Objectives

The public interest test is to assess whether the policy objectives would be jeopardised if the CN measure was implemented and to determine the best available means of achieving the overall policy objectives.

If competitive neutrality cost-reflective pricing were to be applied to the NMRC and the MCB, there is evidence that the above policy objectives would be jeopardised.

The application of CN cost-reflective pricing to both centres would require a significant CN subsidy. To remove this subsidy, the revenue of the NMRC would need to increase by 162% and the MCB's revenue would need to increase by 52%. In relation to the MCB, this is the case even though the MCB had a positive operational position (due to the significant allocated corporate overheads and return on fixed assets).

A range of options were considered, aimed at reducing the level of the subsidies, such as:

• reducing the opening hours;

• removing discounts and concessions;

• increasing fees;

• for the NMRC, closing the pool at the end of March rather than the end of April, and reducing the lifeguards on duty to Lifesaving Victoria minimum ratio requirements; and

• contracting a private provider to operate the centres instead of Council.

While these options would result in some cost savings, there were also a number of disadvantages associated with them.

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The option favoured by Equilibrium was increasing fees. Equilibrium was very concerned with the level of pricing at the NMRC, which it considered to be too low having regard to its facilities and services and the pricing structures of other centres. It contended that a better way for Council to meet its public policy objectives was to offer discounts to students, pensioners etc.

It is true that the NMRC offers a good range of facilities and services, although its gym is small in size compared to its competitors. An issue associated with increasing fees is how to manage this in a way that does not compromise Council's policy objectives. Those objectives include having a pricing structure that encourages participation in aquatic health and wellbeing activities, recognises the requirements of special needs groups and represents 'value for money' based on industry benchmarks.

The Active Melbourne Strategy seeks a holistic approach to implementing community health and wellbeing objectives and thus membership pricing is not arranged in isolation. Membership pricing is reviewed annually for appropriateness, benchmarked against other operators within the industry and approved by Council every year. As committed by Council, a review of the memberships and pricing structure for all of Council's community recreational facilities and services will be undertaken in 2011-2012 in order to fully integrate and continuously improve Council's membership model and associated Active Melbourne Strategy. This includes the alignment and integration of the internally managed and externally contracted operations of all of Council's recreational facilities and resources to maximise participation and minimise costs. A component of the review of the Active Melbourne Strategy will involve the assessment and updating of Council's current policy position on discounts.

In order to remove the CN subsidy at the NMRC, the cost of a swim would need to go from $4.60 to $16.47, a casual adult gym pass would go from $16.50 to $51.15 and the cost of annual gym membership would go from $545.50 p.a. to $1,691.05 p.a. At the MCB, the increases would need to be from $5.50 to $14.08 for a swim, from $19.95 to $27.93 for a casual adult gym pass, and from $41.99 p.m. to $58.79 p.m. for the cost of membership. Apart from the MCB's gym, this would put these activities out of reach for most, if not all, people. Furthermore, even if Council could increase fees, there is likely to be an associated decrease in usage as a result (eg fewer members and casual users).

This then puts at risk Council's other policy objectives, which include providing a range of services and programs that respond to the needs of the 'catchment' for the centres and are developed in conjunction with relevant organisations, such as community groups and sporting and recreation associations. Privately owned leisure centres usually serve only selected segments of the leisure services market, such as learn to swim programs, aerobics and fitness programs, and gym programs.

Community consultation undertaken as part of the NMRC redevelopment identified a strong desire for Council to be actively involved in the management of the community facilities at North Melbourne. This was to ensure that the provision of community programs was as diverse as possible and reflected community expectations with regard to standards, pricing and demographics.

7. Conclusion

In our opinion, it has been demonstrated that Council's policy objectives would be jeopardised if CN cost-reflective pricing was implemented at the centres. We are also of the view that Council's current approach represents the best available means of achieving the overall policy objectives.

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Signed: Melanie Olynyk, Partner Maddocks

29 November 2010

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Accordingly, it is considered that it would not be in the public interest to apply competitive neutrality cost-reflective pricing to the operation of the NMRC or the MCB.

We would, however, recommend that Council monitor operations at the NMRC in particular. We are approaching the first anniversary of this centre in its newly redeveloped form. This presents Council with an opportunity to reflect on its performance over a full year, and to analyse where any cost savings may be able to be achieved. As part of this review, we also recommend that Council consider its pricing structure, including developing a plan for possible increases in prices over a projected period of time.

Vladdocks Date

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Appendix 1

Pricing Structure for the NMRC

See attached

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Recreation Services - Nth Melbourne Pool Price Register • All Prico, includo GST if GST k opplicablo.

Price to 30 June 2010

Price from 01 July 2010

Movement

1. Casual Entry Swim Adult Swim 5 4.50 $ 4.60 2.2% StJcient Swim $ 3.30 $ 3.40 3.0%

Concession (Seniors Card) $ 2.60 $ 2.70 3.8%

Child Swim $ 2.60 $ 2.70 3.8% Fcmily s-virn .r 11 AO $ 11.50 3.5$5 $10(rn Multi Visit Passes (Not offered from 1)77,2810) Adult Swim 10 visit pass $ 40.50 N/A

Student Swim 10 Visit Pass $ 29.70 N/A Concession (Seniors Card) Swim 10 visit Pass $ 23.40 N/A Child Swim 10 visit pass $ 23.40 N/A Family Swim 10 visit pass $ 102.60 N/A Swift) Multi Visit Passes (valid for ope year from date of purchase)

Adult Swirn 20 visa pass (was 10 visit pass) N/A $ 87.40 Student Swim 20 Visit Pass (was 10 visit pass) N/A $ 64.60 Concession (Seniors Card) Swim 20 visit Pass (was 10 visit pass) N/A $ 51.30 Caild Swim 20 visit pass (was 10 visit pass) N/A $ 51.30 Framsy Swim 20 visit pass (was 10 v:sit pass) 19/A $ 204.20 Scason Passes AJoit Swim Season Pass $ 215.00 8 219.99 2.314

Student Swim Season Pass $ 165.00 $ 169.99 3.0% Concession (Seniors Card) Swim Season Pass $ 129.00 $ 132.99 3.1% Child Swim Season Pass $ 129.00 $ 132.99 3.1% Family Swim Season Pass $ 499.00 $ 511.99 2.6%

Aquatic Education birect Debit Joining Fee $ 19.95 $ 19.99 0.2% Adult Aquatic Education Class (Per visit - Term Basis Only) 12 $ 40.00 $ 40.99 2.5% Child Aquatic $ducation Class (Per visit - Tarrn Oasis Only) 9 90 $ 33.00 $ 33.99 3.0% Private Swim Lessons One on One 30 Minute Session $ 54.50 $ 55.99 2.7%

One on One 30 Minute Session - Member $ 51.95 $ 52.99 2.0% One on One Hour Session $ 77.50 $ 78.99 1.9% One on One Hour Session - Member $ 69.95 $ 71.99 2.9% One on Two Hour Session $ 97.95 $ 99.99 2.1% One on Two Hour Session - Member $ 82.95 $ 84.99 2.5% One on One 30 Min Session - Casual 10 visit Pass $ 490.50 $ 502.99 2.5% One on One 30 Min Session - Member 10 visit Pass $ 467.55 $ 478.99 2.4%

One on One Hour Session - Casual 10 visit Pass $ 697.50 $ 714.99 2.5% One on One Hour Session - Member 10 visit Pass $ 629.55 $ 649.99 3.2% One on Two Hour Session - Casual 10 visit Pass $ 881.55 $ 902.99 2.4% One on Two Hour Session - Member 10 visit Pass $ 746.55 $ 764.99 2.5%

„. 3. Facility Equipment and Staff Hire Pool Pool Lane Hlte per Hour (Plus Group Petty Tee) S 59_00 S 59.99 1.7% Floorns/Studios Meeting Room/Learning Studio Hne (Per Hour) 39.00 3 39.99 2.5%

Miscellaneous Locker Hire $ 2.00 $ 2.10 5.0%

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Recreation Services - North Melbourne Gym Price Register • A I Pricus includo 65111650 is spplizablo.

Price to 30 June 2010


Movement

Gymnasium & Group Fitness Adult 0 15 99 6 15.50 3 21iis

Student e 13 99 8 14 SO 3 6°,,-,

Concession $ 11.99 $ 12.50 4.3% 0014444 ilk Group Fitness Adult Gymnasium 10 visits $ 143.91 N/A Student Gymnasium 10 visits $ 125.91 N/A Persioner Gymnasium 1h vishs $ 107 91 N/A Cymnasium Si Group Fitness Adult Gymnasium 20 visits N/A 313.50 Student Gymnasium 20 visits N/A 275.50 Per slonr (8ymnesitJrn 20 visits N/A 5 237.50 Personal Training One on One 30 Minute Session $ 54.50 5 55.99 2.7% One on One 30 Minute Session - Member $ 51.95 $ 52.99 2.0% One on One Hour Session $ 77.50 $ 78.99 1.9% One on One Hour Session - Member $ 69.95 71.99 2.9% One on Two Hour Session $ 97.95 $ 99.99 2.1% One on Two Hour Session - Member $ 82.95 84.99 2.5% One on Two Hour Session - Casual 10 visit Pass $ 490.50 502.99 2.5% One on Two Hour Session - Member 10 visit Pass $ 467.55 $ 478.99 2.4% One on One 30 Min Session - Casual 10 visit pass $ 697.50 714.99 2.5% One on One 30 Min Session - Member 10 visit pass $ 629.55 $ 649.99 3.2% One on One Hour Session - Casual 10 visit pass $ 881.55 $ 902.99 2.4% One on One Hour Session - Member 10 visit pass $ 7/16.55 5 764.99 2.5% 04446-4":0ervices 30 minute Consultation $ 39 99 6 39.99 0 005

45 minute Consultation $ 49. 96 5 49 99 0.0%

60 minute Consultation $ 59.99 S 59 99 0 0% 90 minute Consultation 5 89.99 5 69.99 0.0% Wel Inv s s Courses Adult WeinGss Course 9 99 99 8 99 99 0 0=/,-,

Adult Wellness Class - Relntlonship 9 79.99 79.99 0.0% koiationsitip options Lifestyle Start Up $ 49.99 49.99 0.0% Youth Gym & Young at Heart Start Up $ 39.99 $ 39.99 0.0% Lifestyle (Fortnightly DD) $ 19.99 20.99 5.0% Results (12 Months) $ 519.99 $ 545.50 4.9% Young at Heart / Youth (Fortnightly DD) $ 14.99 15.49 3.3% Young at Heart / Youth (12 months) $ 389.99 $ 402.99 3.3% Rehabilitation 3 month (not for retail sale) f!', 249.99 9 26599 2.496 -Court Hire Basketball / Netball Court / Soccer Hire per hour, per court $ 45.00 5 45.99 2.2% Outdoor Basketball Court Hire per hour, per court $ 20.00 $ 19.99 -0.1% yolleybnll Court Hire per hour, per court ' $ 25 00 $ 25 99 4 0% Competitions Team sheet per learn, per gams (Ne n ball/Basketball/Soccer) $ 49.99 6 49.99 0.0% Entry Fees Adult 2.00 2.10 5.0% Student / Concession 1.50 1.60 6.7% Fanily (2 Adults / 2 Children) 6.00 $ 6.40 6.7% Miscellaneous Locker Hire 2.00 $ 2.10 5.0% Casual Shoofing 5.00 $ 5.00 0.0%

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Appendix 2

Pricing Structure for the MCB

See attached

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Recreation Services - City Baths Price Register ' Al Pric.ur, incluclo GST if AST is upplicnblo.

S •Mm Casual Entry Adult Swim i Sliower i SOU i ' S 5.30 $ 5.50

Student Swim / Shower / Bath $ 4.30 $ 4.50

Pensioner Swim / Shower / Bath $ 2.50 $ 2.60 Chad Swim / Shower $ 2.50 $ 2.60 Family Swirn $ 11.50 $ 12.00 Swim Multi Visit Passes Adult Swim 20 visit pass $ 96.40 $ 99.00 Student Swim 20 Visit Pass $ 77.40 $ 81.00 Pensioner Swim 20 visit Pass $ 45.00 $ 46.80 ChM Swim 20 visit Pass 5 45 00 5 46.80

Swim Spa Sauna (SSS) Adult Switu/Spa/Saima $ 11.00 $ 11.40 Studer I owl m/Spa/Sauna $ 8.50 $ 8.80 Pensiea o, Swirn/Spa/Saune 5 5.10 $ 5.20

Swim Spa Sauna (SSS) Multi VISit Passes Adult SOS 20 visit Pass $ 198.00 .S 205.20 Pensioner SSS 20 visit Pass $ 153 OU S 158 40

sit..clelit SSS 20 visit Pass S 91 80 ::.; 93 00

Gipwasiurn Adult Gym - SOS & Locker ,, 19.50 5 16.ati Student Gym - SSS & Locker $ 17.50 $ 17.95 Pensioner Gym - SSS & Locker $ 10.50 $ 10.95 Fitness Testinn, Program Start & 1001 Work Out Review $ 80 00 $ 9998 Gymnasium - Multi visits Adult Gymnasium SSS & L 20 visit Pass $ 351.00 5 359.10 Shdent symn..,n 555 & L 20 v0It PDS; 0 315.00 5 323.10 Pensioner Gyt rula,u1, SSS .', L 20 v:slt Pa, S 19313 $ 19i 10

GSt*p Fiiness Adult GF - SSS & L 5 17.00 3 17.35 Student OF SSS & L $ 13.40 $ 13.95 Pensioner GF - S/S/S & L $ 8.50 $ 8.95 Adult GF SSS & L 20 visit Pass $ 306.00 $ 323.10 Student OF SSS & L 20 visit Pass $ 241 20 5 251.10

Private Swimming Lessons Ona on One 30 Minute Session $ 54.50 $ 55.99 One on One 30 Minute Session - Member $ 51.95 $ 52.99 One on One Hour Session 5 77.50 $ 79.99 One on One Hour Session - Member $ 69.95 $ 71.99 One on TwO HoUr Session $ 97.95 $ 99.99 One on Two Hour Session - Member $ 82.95 $ 83.99 One on One 30 Min Session - Casual 10 visit Pass $ 490.50 $ 503.91 One on One 30 MM Session - Member 10 visit Pass $ 467.55 $ 476.91 One on One Hour Session - Casual 10 visit Pass $ 697.50 $ 719.91 One on One Hour Session - Member 10 visit Pass $ 629.55 $ 647.91 One on Two Hour Session - Casual 10 visit Pass $ 881.55 $ 899.91 One on Two Hour Session - Member to visit Pass $ 746.55 $ 755.91

Oji.i6Ctiaki-109 One on One 30 Minute Session $ 54.50 S 55.99 One on One 30 Minute Session - Member $ 51.95 $ 52.99 One on One Hour Session $ 77.50 $ 79.99

One on One Hour Session - Member $ 69.95 $ 71.99 One on Two Hour Session $ 97.95 $ 99.99 One on Two Hour Session - Member $ 82.95 $ 83.99 One on One 30 Min Session - Casual 10 visit Pass $ 490.50 $ 503.91 One on One 30 Mh Session - Member 10 visit Pass $ 467.55 $ 476.91 One on One Hour Session - Casual 10 visit Pass $ 697.50 $ 719.91 One on One Hour Session - Member 10 visit Pass 5 629.55 $ 647.91

One on Two Hour Session - Casual 10 visit Pass $ 881.55 $ 899.91 One on Two Hour Session - Member 10 visit Pass tv4p.p.pgq:Sarvices

$ 746.55 $ 755.91

30minute Consultation S 45.99 $ 49.99 30 minute Consultation - Member N/A $ 45.99 45 minute Consultation $ 59.99 $ 59.99

45 minute Consultation - Member N/A $ 55.99 ,60iminute Consultation $ 69.99 $ 69.99

60:mlnute Consultation - Member N/A $ 65.99

90 minute Consultation $ 99.99 $ 99.99 90 minute Consultation - Member N/A $ 95.99

3.8% 4.7% 4.0% 4.0% .1 3%

3.5% 4.7% 4.0% 4.0%

3.6% 3.5% 20%

3.6% Floss

C0',",

2.3';O 2.6% 4.3%

25.0%

2.3% 2.00; b 4.3°,5

5.0% 4.1% 5.3% 5.6% 4.1%

2.7% 2.0% 3.2% 2.9% 2.1% 1.3% 2.7% 2.0% 3.2% 2.9%

2.7% 2.0% 3.2% 2.9% 2.1% 1.3% 2.7% 2.0% 3.2% 2.9% 2.1% 1.3%

8.7%

0.0%

0.0%

0.0%

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Recreation Services - City Baths Price Register • 511Pricon includo GST if OST is opplicablo.

Price to 30 June

2010


Movement

Wellness Course Adult Wellness Class 5 ',Isis ';', 99 95 :5 99.99 0.0'",,

Adult Wellness C1333 - 6 vibits. Member 3 73 95 S 73 99 0.1`,:,

Adult Wellness Class - 6 vi3its Relormer 3 139.95 .3, 139.99 0.0M, Ad011 Wellness Class 5 vks.lts riemb, PT:Tors. ' 119.99 G 119.99 0.0G. MOrn 0 erships Club Go Joining Fee Si 129.00 $ 133.00 3.1% Aquatic DD Joining Fee $ 69.00 $ 71.00 2.9% Youth / Living Stronger DD Joining Fee $ 69.00 $ 71.00 2.9% Swim School Joining Fee $ 19.99 $ 21.00 5.1% Aquatic Education Infants & Children Monthly DD $ 39.99 $ 40.99 2.5% Child Swim Lesson (Per Visit) (Sold on School Term Basis) $ 11.99 $ 12.99 8.3%

Aquatic Education Adult Familiarisation / Development Monthly DD $ 43.60 $ 44.99 3.2% Adult Swim Lesson - Familiarisation / Development (30 min) (Per Visit) $ 12.99 $ 13.99 7.7% (Sold on School Term Basis) Aquatic Education Adult Refinement Monthly DD $ 49.99 $ 51.99 4.0% Adillt Swim Lesson - Refinement (45 min) (Per Visit) (Sold on School Term $ 14.95 $ 15.99 7.0% Basis) Aquatic Education Squad Monthly DD $ 51.99 $ 53.99 3.8% Swim Squad Class (45min) (Per Visit) (Sold on School Term Basis) Aquatic Fortnightly DD (S/S/S/locker) ,

Aquatic Monthly DD (S/S/S/locker)

$ 15.99

$ 24.99 $ 49.99

$ 16.99

$ 25.99 $ 51.99

6.3%

4.0% 4.0%

Insurance / Rehab Program Aquatic - 3 month (S/S/S/locker) $ 419.99 $ 439.99 4.8% Insurance / Rehab Program Aquatic - 6 month (S/S/S/Iocker) $ 469.99 $ 499.99 6.4% Aquatic12 month (S/S/S/lOcker) $ 599.99 $ 629.99 5.0% Club - Fortnightly DD (Flexi) $ 41.99 $ 42.99 2.4% Club - Monthly DD $ 81.99 5 83.99 2.4% Insurance / Rehab Club - 3 Months $ 499.99 $ 499.99 0.0% Insurance 1 Rehab Club 6 Months $ 699.99 $ 739.99 5.7% Club - 12 Months (Results) $ 999.99 $ 1,039.99 4.0% Club Off Peak - Fortnightly DD $ 33.99 $ 34.99 2.9% Club Off Peak - Monthly Debit $ 67.99 $ 69.99 2.9% Geld- Monthly DD $ 99.99 $ 103.99 4.0% Geld- 12 Months $ 1,225.00 $ 1,275.99 4.2%

RMIT Direct Debit N/A $ 23.99 Youth Direct Debit $ 17.99 $ 18.99 5.6% Youth Monthly Direct Debit $ 34.99 N/A Youth 12 Month $ 429.99 $ 459.99 7.0% Living Stronger - Fortnightly DD $ 24.99 $ 24.99 0.0% Living Stronger - Monthly $ 49.99 $ 51.99 4.0%

LiVing Stronger - 3 month Membership $ 149.99 $ 155.99 4.0% Living Stronger - 6 month Membership $ 299.99 $ 319.99 6.7% Living Stronger - 12 month Memherhip $ 599.59 $ 619.99 3 357-, Facility Hire Pool Lane Hire Fel i lour $ 55.02 $ 09.09 7.7% Small Pool Hire Per Flour $ 85.00 $ 99.99 17.6% Group Fitness Studio Hire Per Hour $ 85.00 $ 99.99 17.6% Life Guard Hire Per Hour $ 60.00 $ 69.99 16.7% GF Instructor Hire Per Hour N/A $ 99.99 Netball / Tennis Court Hire $ 16.50 $ 16.99 3.0% Netball / Tennis Court Hire - Lights $ 23.75 $ 24.99 5.2% Squash Court 1-lh'e - 3f1 Min. $ 14.50 S 14.99 3.40 Mi.ttccllancoun Locker Hire $ 2.50 S 2.50 0.0% Changing Cubicle Hire $ 1.20 $ 1.20 0.0% Towel Hire $ 5.00 $ 5.50 10.0% Racquet Hire $ 5.00 $ 7.00 40.0%

COM_SERVICE_PROD-#5915024-v1 -Competitive_Neutrality_Review_2010_-_Costing_exercise_for_City_Baths

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Maddocks

Appendix 3

Financial Spreadsheets for the NMRC

See attached

page 22

of 117

North Melbourne Recreation Centre (Comprises Rec Centre and Pool) 2009110

Total costs including CN & Profit Adjustments Direct operating Income (for year ended 30/6/10) $ (569,648) Add: Direct operating Income net estimate for Rec Centre (Jul-Nov period) $ (132,354) Direct operating Expenditure (for year ended 30/6/10) $ 1,037,976 Add: Direct operating Expenditure net estimate for Rec Centre (Jul-Nov period) 215,978 Direct Net (Surplus)/Subsidy $ 551,951

Corporate Overheads 425,054

Net (Surplus)/Subsidy excluding CN adjustments $ 977,005

CN Adjustments

Total Adjustments to Offset Competitive Advantages $ 338,654

Total Adjustments to Offset Competitive Dis-advantages $ (226,793)

Net CN Adjustment $ 111,861

Total (Surplus)/Subsidy including CN Adjustments I $ 1,088,866

LESS: Recreational Swim Net CN Adjustments $ (1,792)

Ad'usted Total (Surplus)/Subsidy including CN Adjustments 1,087,075

Requ red Profit Margin Percentage 8%

Total Profit Margin (excluding Recreational Swim Profit Margin) $ 50,028

Total (Surplus)/Subsidy including CN Adjustments & Profit Margin I $ 1,137,102

CN Policy does not apply to Recreational Swim component. Therefore Recreational Swim CN components are excluded.

NOTES 1. The North Melbourne Recreation Centre component opened on 1st December 2009 (essentially operating for 7 months). Therefore the 2009/10 calculations for the Recreation Centre comprise the 7 months of Actuals and assumed/estimated figures for the July to November period based on the July 2010 actuals and 2010/11 budget seasonalisation for Aug-Nov 2010 (less CPI).

2. The North Melbourne Outdoor Pool operates from 1st October to 30th April.

3. CN Policy does not apply to Recreational Swim component. Recreational Swim Subsidy including Corporate Overheads is included,

however Recreational Swim CN components are identified but not included in final calculations.

4. To offset Adjusted Total Surplus/Subsidy including CN Adjustments & Profit Margin of $1,137,102 - total revenue would need to increase by 162%.

COM_SERVICE_PROD-#5915061 -v1 -Competitive_Neutrality_Review 2010_-_Costing_exercise_for_Nth_Melb__Rec Centre As at 26/08/2010 1:52 PM

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North Melbourne Recreation Centre (Comprises Rec Centre and Pool) Internal Services Costs (Corporate Overheads) 2009110

Description of Internal Service Units Unit CostAgreed Annual

UsageAnnual Cost for

Internal Services Notes

Property - Spotless Contract $ 220,636 Advised by Property Services (Annualised figure) HR - Services Employee $ 3,025.20 12.00 $ 36,302 Number of EFTs BIS - Service provision Costs PCs $ 3,692 10 $ 36,920 Based on Number of PC's at Nth Melb Rec Centre FIN SERV - Accounts Payable Invoice $ 7.32 574 $ 4,200 Number invoices processed for 2009-10 FIN SERV - Supply Pur Ord $ 8.32 195 $ 1,623 Number purchase orders closed for 2009-10 Customer Relations Employee $ 2,766.04 12.00 $ 33,193 Number of EFTs 50% of Governance Services (excluding insurance expense) Employee $ 2,152.00 12.00 25,824 Number of EFTs. Insurance premiums $ 15,600 Premium quotation as a stand alone facility Legal Services Employee $ 1,336.40 12.00 $ 16,037 Number of EFTs Procurement and Contracts Services Employee $ 560.00 12.00 $ 6,720 Number of EFTs

Recreation Services Branch Mgmt & Branch Admin Support Staff Costs $ 28,000

10% of Branch Manager and Branch Admin Support staff time was dedicated to NMRC (therefore 10% of labour costs)

Total of Other Corporate Overheads I I I I $ 204,418

Total Annual Cost of Internal Services Costs (Corp o/h's) $ 425,054

Corp OH COM_SERVICE_PROD-#5915061-v1-Competitive_Neutrality_Review 2010_-_Costing_exercisefor_Nth_Melb Rec__Centre As at 26/08/2010 1:53 I'M

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$ 1,980,000

$

$ 915,000 8.00%

$ 231,600

Wet $540K; Dry $1.44M

Wet area $ 759K; Dry area $156K (Wet area 84.5%; Dry area 15.5%)

Wet $104K; Dry $128K

55,016 8.00%

4,401

$ 772,587 16.67%

$ 128,765 8.00%

$ 10,301

Adjustment to offset depreciation

Depreciation of adjusted value of building (@ 2%) $ 39,600 (Wet $10.8K; Dry $28.8K

Adjustment to offset exemption from Land Tax & Council Rates

Full value of Tax & Rates exemption 19,034Wet $8.5K; Dry $10.5K (Wet 45%; Dry 55%)

(The need for this adjustment is usually eliminated by imputing a commercial rent in full costs.)

North Melbourne Recreation Centre (Comprises Rec Centre and Pool) Competitively Neutral Cost Adjustments 2009/10

Adjustments to offset Competitive Advantages

Adjustment to include rate of return on Assets and Working Capital Return on Fixed Assets- REAL ESTATE ONLY (The need for this adjustment may be eliminated by imputing a commercial rent Value of Assets utilised in work area:

Buildings

Building Enhancement scheduled for 2010/11

Land (owned by Crown) Required rate of return - Use Rate as agreed by the Office of Local Government Total Adjustment

Return on Other Fixed Assets

Value of Assets utilised in work area Plant and Equipment Required rate of return - Use Rate as agreed by the Office of Local Government Total Adjustment

Return on Working Capital Total Cost of Service Provision (Direct Operating Deficit + Cleaning costs) % of Total Cost evaluated as working capital (2 months)

Total Working Capital Required rate of return - Use Rate as agreed by the Office of Local Government Total Adjustment

COM_SERVICE_PROD-#5915061-v1-Competitive_Neutrality_Review_2010_-_Costing_exercise jor_Nth_Melb Rec Centre As at 26/08/2010 1:54 PM CN Adjust.

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Full Cost of Employee and Management Salaries - Excluding Superannuation Rate of Payroll Tax Full value of Payroll Tax exemption

681,158 4.95%

33,717

Total Value of Adjustment for Advantages 338,654

Cleaning Fixed Term Contract Cost - Disadvantage accruing to Council due to it being a Government organisation and centralisation of cleaning contract. Full value of other disadvantages

North Melbourne Recreation Centre and Pool have no control over the cleaning cost amount assigned to the facilities (the cleaning contract is a fixed term centralised contract covering all CoM properties). The amounts are considerably higher than industry norms.

Standard Industry estimated annual cleaning costs $85K Recreation Centre; $60K Pool (09/10 Actual Council annualised contracted cost $220K total).

Rec Cntr $19,108; Pool $56,528 75,636

Studies on wage comparisons have shown that the CoM EBA sees significantly higher employee costs. For recreation and leisure industry staff the CoM average wage rate is at least 20% over the standard industry rate.

Labour Costs

Employee Costs

755,785

Full value of other disadvantages 151,157

Total Value of Adjustment for Disadvantages EF,79-31

Adjustment to offset exemption from Payroll Tax

Total adjustment offsetting Competitive Advantages

Adjustments to offset Competitive Disadvantages

Adjustment to offset other Disadvantages to Council due to Government ownership.

Total adjustment offsetting Competitive Disadvantages

CN Adjust. COM_SERVICE_PROD-#5915061-v1-Competitive_Neutrality_Review_2010_-_Costing_exercisefor_Nth_Melb Rec Centre As at 26/08/2010 1:54 PM

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North Melbourne Recreation Centre (Comprises Rec Centre and Pool) 002_2__3// 0

Total (Surplus)/Subsidy including CN Adjustments & Profit Margin $ 1,137,102

REDUCED OPENING HOURS (CLOSING ONE HOUR EARLIER (MON - FRI) -$

REDUCED LIFEGUARDS ON DUTY TO LIFE SAVING VICTORIA MINIMUM RATIO REQUIREMENTS -$

MEMBERSHIPS ALL PRICED AT ADULT RATE -$

ALL CASUAL SWIM FEES AT FULL ADULT RATE

POOL CLOSES AT END OF MARCH RATHER THAN END OF APRIL

7,389 Subsidy Reduction Option 1





TOTAL REDUCTIONS -$ 110.796

Net potential total (surplus)/subsidy including CN Adjustments & Profit Margin $ 1,026,306

OPTION 1 - REDUCED OPENING HOURS (CLOSING ONE HOUR EARLIER (MON - FRE 260hours • $28.42 per hour

OPTION 2 - REDUCED LIFEGUARDS ON DUTY TO LIFE SAVING VICTORIA MINIMUM RATIO REQUIREMENTS -5 29,525

Hot Days > $2K Sales LG's Rostered Hours RosteredTotal Labour Hours

LSV Ratio LG's

Total Labour Hours UV Ratio

41 8 7 2296 4 1148

Cost $ 65,252.32 $ 32,626.16 IG = Lifeguards

Difference = $29,626 C0N1 Labour Costs 2E ( $28.42per hour)

OPTION 3 - MEMBERSHIPS ALL PRICED AT ADULT RATE 4,940

Membersitlp Desaiption ,.' : Total Contracts 09/10 Rate09/10 Adult Rate

Subsidy Provided

NMRC YOUNG AT HEART FLEXI 22 $ 14.99 $ 19.99 -$ 2,860.00

NMRC YOUNG AT HEART RESULTS 3 $ 389.99 $ 519.99 -$ 390.00

NMRC YOUTH FLEXI 13 $ 14.99 $ 19.99 -$ 1,690.00

Total Subsidy Provided For Memberships1-5 4,940.00

OPTION 4 - ALL CASUAL SWIM FEES AT FULL ADULT RATE 35,846

Service Oty 09/10 Rate

09/10 Adult Rate

Subsidy Provided

200 CONCESSION SWIM 73 $ 51.30 $ 87.40 -5 2,635.30

200 STUDENT SWIM 55 $ 64.60 $ 87.40 -5 1,254.00

Child Swim 7420 $ 2.60 $ 4.50 -$ 14,098.00

Concession Swim 2513 $ 2.60 $ 4.50 -$ 4,774.70

Family Swim 1659 $ 11.40 $ 18.00 -$ 10,949.40

Student Swim 1779 $ 3.30 $ 4.50 -$ 2,134.80

Total Subsidy Provided For Casual Swims1-5 35,846.20 1

OPTION 5 - POOL CLOSES AT END OF MARCH RATHER THAN END OF APRIL -$ 32,995

7,389

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NORTH MELBOURNE RECREATION CENTRE AND POOL SIGNIFICANT BUSINESS CALCULATIONS - 2009/10 Si i_g _at_tfi t Income Total Labour

CostRecreation

ContractorsUtilities All other direct

costs

: n

Direct Not Surplus

((Subsidy)

Corporate Ovorheads (Cleaning)

Corp Overheads

(Other)

Net Surplus /(Subsidy)

•xcluding CN adjustments

Add CN Advantage Adjustments onetime

4.55 5 0.0 2,1

Add CN Advantage

Adjustments liat5o, *51

Less CN Disadvantago Adjustment

Cleaning incomo Firm°

411

Less CN Disadvantage

Adjustment Salaries (km ittetto

Total Surplus ((Subsidy)

including CN Adjustmonts

ADJUSTED Total Surplus

((Subsidy) including CN

Adjustments (CN POLICY DOES NOT APPLY TO

RECREATIONAL SWIM

COMPONENT)

Total Profit Margin for CN purposes (at

8%). (Excludes Recreational

Swim component)


including CN Adjustments et Profit Margin

Required % Businassos increase in

Revenue to offset total Surplus/ (Subsidy)

including CN adjustmonts 8, Profit Margin

Recreational SWIM (Swim. swim nuthip, 10% of club ndahlp)

$ 178,932 3 296,632 9 $ 49,124 S 141,177 $ (308.001) 3 73,494 80,230 $ (461,725) 8 83,537 13,233 (35,652) $ (59,326) $ (463,517) $ (461,725) $ (461,725) 258%

Aquatic Education 30,742 10,986 $ 17,785 $ 2,277 $ 5,229 (5,535) $ 12,627 2,971 121,133) $ 14,352 $ 490 $ (6,125) $ (2,197) 5 (27,653) $ (27,653) 5 (2,212) $ (29,865) 97%

Dry . - Health and Fitness (Gym. 79% ri Club thshop

$ 259.454 $ 376,472 $ 4,511 179,175 $ (300,704) 5 64,574 $ 101,825 $ (467,103) $ 106,985 16,795 (11,852) $ (75,294) 5 (503,737) 5 (503,737) $ (40,299) 9 (544,036) 210%

Dry - Group Runes (Fitness classes. 20% of Club nYship)

$ 76,352 S 28,413 $ 40,752 $ 1,398 $ 13,523 $ (7,733) $ 19,003 5 7,685 S (34,421) $ 31,483 $ 1,268 5 (3,488) $ (5,683) 5 (58,002) 5 (58e02) $ 14,6401 $ (62,642) 82%

Dry - Stadium Hire, Competitions, Events

-

82,492 21,310 7,191 S 12,539 $ 10,142 31,309 5 20,531 5 5.764 5 5,015 5 34,015 951 $ (3,768) 5 (4,262) (21,921) $ (21,621) $ (1,754) $ (23,675) 29%

-2%- Pool Cafe, merchandise, vondlng

0 61,282 5 10,986 $ 1,008 $ 5,229 $ 44,059 $ 25,171 5 2,971 15,917 $ 28,610 5 490 $ (12,210) 5 (2,197) 5 1,224 5 1,224 $ 98 $ 1,322

Pool Events, other 0 12,748 10,986 $ $ 1,880 9 5,229 $ (5,347) $ 5,236 5 2,971, $ (13,555) 5,952 490 $ (2,540) $ (2,197) (15,259) 5 (15,259) $ (1,221) $ (16,480) 129%

' TOTAL $ 702,002 $ 755,786 $ 65,728 $ 72,737 $ 359,703 $ (551,952) $ 220,636 $ 204,418 $ (977,006) $ 304,935 $ 33,717 $ (75,636) $ (151,157) $ (1,088,864) $ (1,087,073) $ (50,028) $ (1,137,101) 162% Total per income Statements and Jul-Nov est

5 702,002 $ 755,785 9 65,727 $ 72,736 359,705 $ (551,951) (675 370) 12911 Excluding Recreational Swim

NOTE: CN Policy does not apply to Recreational Swim component. Recreational Swim Subsidy including Corporate Overheads is included, however Recreational Swim CN components are identified but not included in final calculafions.

CO Calculations

Net Direct Subsidy $ 551,950 Corp Overheads S 220,636 Slosiort RoC

(Cleaning) $116,5213 Pool

Other Corp Overheads $ 204,418

Other CN Adjustments 9 338,654

Less CN 5 (75,636) Disadvantage

Cleaning costs Less CN $ (151,157) Disadvantage Salaries Sub Total 1,088,865

Labour Cost Breakdown

% Percentage

Ern pbyee Type Wet 5 total Rocroational Swim

Aquatic Education

Pool Café, merchandise,

vending

Pool Evonts, othor

Wot Total % Dry $ Total Dry - Health and Fitness (Gyro 70o. of Cubkinship),

Dry - Group Fitness (Fano.

oho.% 30°6 of Club

'Mho)

Dry - Stadium Hiro, Compotitions, E,,,,,yft

Dry Total %

Gym Instructors 95% 5% 0% 100% Lifeguards 95% 5% 0% 0% 100% Gust Servce Staff 80% 5% 10% - 5% 100% 80% 10% 10% f00% Management 95% 0% 0% 5% 100% 90% 5% 5% 100% Labour Total 9 329,591 90% 3% 3% 3% 100% $ 428,195 88% 7% 5% 1 op%

Recreation Contractors

$ 17,785 0% 100% 0% 0% 100% $ 47,943 0% 85% 1559 100%

Utilities Breakdown Wot $ total Recreational Swim

Aquatic Education

Pool COO, morchandise,

vending

Pool Events, other

Wet Total % Dry $ Total Dry - Health and Fitness (G, 70% of CM, Moho))

Dry - Group Fitness (Somas

dosses 30% of Mc

molly,/

Dry - Stadium Hire, Compotitions, E,,,,n,

Dry Total %

Power $ 17,507.00 90% 25% 5.0% 2.5% 100% $ 15,278.00 15% 5.0% 80% 100% $ 15,756.30 $ 437.68 $ 875.35 $ 437.68 5 2,292 $ 764 12,222

Water $ 13,218.00 92% 5% 1% 2% 100% 5 2,523.00 70% 20% 10% 100% 5 12.101.48 5 680.95 132,19 5 264.38 $ 1,766 5 505 $ 252

Gas $ 23,563.00 90% 5% 0% 5% 100% $ 647.00 701', 20% 10% 100% $ 21,200 70 $ 1,178.15 $ - 5 1,178.15 $ 453 5 129 65

COMSERVICE_PROD-05915051-Competibue Neutrakty Remew 2010 - Couting exercise for Nth Melb Rec Centre.XLS

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09-10 Income Total

ORACLE' Appl ica t ions

FINAL INCOME STATEMENT FOR 09110

0r99460 (Combined Nth Melb Rec Ctr Nth Meth Pool)

10 Income Statement - Detail

City of Melbourne Period: JUN-10 currency AUD

Annual YTD YTD Variance Monthly Monday Variance

Budget Budget Actual Fav(Unfar) Budget Actual Far(Unfac)

INCOME STATEMENT

REVENUE Federal Grants1204495 Fed Grant Approp School Holiday 20000.00 20,000.00 0.00 -20,000.00 10.000.00 0.00 40,000.00l

20,000.00 20,000.00 0.00 -20,100.00 10.000.00 0.00 -10,000oo

Total Grants and Subsidies 20,000.00 20.000.00 000 -20,00600 10,000.00 0.00 -10,0101X1 I

, Recreation Facility Fees , 1305604 Rec Fac M/Ships Peak Club 100,000.00 100,000.00 240,782.00 140,782.00 16.600.00 34,614.00 18,014.00

1305800 Rec Fac Gymnasium 5,000.00 5,000.00 17,956.00 12,956.00 1,000.00 1,067.00 67.00

1305802 Rec Fac Fitness Classes . 10,000.00 10,000.00 8,836.00 -1,164.00 2.000.00 2,618.00 618.00

1305822 Roc Fac Snim I 27.000.00 127,000.00 133,370.00 6,370.00 0.00 0.00 0.00

1305824 Rec Fac Aquatic Education (GST 5,000.00 5,00600 30,742.00 25.742.00 0.00 0.00 0.00

1305830 Rec Fac Aquatic Membership 5,000.00 5,000.00 11,375.00 6,375.00 0.00 0.00 0.00

1305832 Rec Fac School Holiday Prog GST 85,500.00 85,500.06 0.00 -85,50000 20.00000 0.00 -20,000.00

1305834 Rec Fac Competitions 30,000.00 30,000.00 16.95900 -13,041.00 6.00600 4,981.00 -1,01900

1305835 Rec Fac Events 22,000.00 22,000.00 13,149.00 -8,851.00 5.000.00 831.00 -4,169.00

Total Recreation Facility Fees 389,500.00 389,500.00 473,169.00 83,669.00 50,600.00 44.112.00 -6,488.(0)

Hire Fees 1317730 Hire Of Grounds/Facilities 10,000.00 10.000.00 30,773.00 20,773.00 2,000.00 4,043.00 2,043.00

1317772 Roc Fac Locker Hire 500.00 500.00 1,643.00 1.143.00 0.00 0.00 0.00

10,500.00 10.500.00 32,415.00 21,915.00 2,000.00 4.043.00 2,043.00

Total Fees & Charges 400,000.00 400.000.00 505,585.00 105.585.00 52,600.00 48.154.00 -4,446.00

Publications & Promotion 1608910 Rec Fac merchandise 15,000.00 15,000.00 11,761.00 -3,239.00 1.000.00 9.00 -991.00

1608912 Roc Far Vending 19,000.00 19,000.00 420.00 -18,580.00 3,60000 14,00 -3,58600

1608913 Roc Fac Cafe 45,000.00 45.000.00 49,881.00 4,881.00 0.00 0.00 0.00

79,000.00 79,000.0(1 62.063.1)0 -16,937.00 4,600.00 23.00 -4,577.00

Recoveries 1701110 Non Government Recoveries 0.00 0.00 2,000.00 2,00000 0.00 0.00 0.00

0.00 0.00 2,000.00 2,000.00 0.00 0.00 0.00

Total Sales & Recoveries 79,000.00 79.000.00 64.063.00 -14,937.00 4,600.00 23.00 -4,577.00

Total Revenue 499,000.00 499,000.00 569448.00 70,648.00 67.200.00 48.177.00 -19,023.00

COM_SERVIZEggPROD-45915061 -v1 -Com petillve_Neutrality_Fleview_2010_-_Costing_exe rcise_tor_Nth_Melb_Rec_Centre.XLS

of 117

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of 117

NM Rec Centre opened on 1st December 2009 Estimate for July to November 2009 is based on July 2010 Actuals and budget for Aug to Nov 2010 (adjusted for inflation)

Budget by Period Income Statement Detail Activity: Nth Melb Recreation Centre

0GL04 - Budget by Petiod Income Statement - 17-A4g-2010 08:4645 JONGOR Jul 10 Aug 10 Sep 10 Oct 10 Nov 10

Less: Adjustment Total Jul-Nov for Jul 09 - Nov 09

Actual Budget Budget Budget Budget Total

estimate Adjusted for

CPI

Rey Centre pre- commencement

aetuals

Net Total of Jul-Nov

adjustment

INCOME STATEMENT REVENUE

Federal Grants•

12042 Fed Grant Approp School Holidays o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Total Grants & Subsidies 0 0 0 0 0 0 0 0 0

Rec Facility Fees 13040 Rec Fac M/Ships Peak Club 34,029 17,000 17,000 20,000 20000 108,029 104,788 3,697 101,091

13064 Hoc Fac Gymnasium 2,105 83 83 83 83 2,437 2,364 177 2,187 13065 Rec Fac Fitness Classes 297 83 83 83 83 629 610 85 525

13076 Rec Fac School Holiday Prog GST F 0 0 0 0 0 0 0 0 0 13077 Rec Fac Competitions 4,478 1,818 1,818 1,818 1,818 11,751 11,398 0 11,398 13078 Rec Fac Events 291 1,636 1,636 1,636 1,636 6,836 6,631 645 5,986

41.200 20,621 20,621 23,621 23,621 129,682 125,792 4,604 121,188 Hire Fees

13150 Hire Of Grounds/Facilities 6,225 1,636 1,636 1,636 1,636 12,770 12,387 0 12,387 6,225 1,636 1,636 1,636 1,636 12,770 12,387 0 1.0.017

Total Fees & Charges 47,425 22,257 22,257 25,257 25,257 142,453 138,179 4,604 133575

Publications & Promotion 16015 Rec Fac merchandise 0 0 o o 5 o 0 0 0

16016 Rec Fac Vending 22 200 200 200 200 822 797 18 779 22 200 200 200 200 822 797 18 779

16021 Non Government Recoveries 0 0 0 0 0 0 0 2,000 (2.000)

Total Sales & Recoveries 22 200 200 200 200 822 797 2,018 (1,221)

TOTAL REVENUE 47,447 22,467 22,457 25.457 25,457 143,275 138,976 6,622 132,354

EXPENDITURE Labour - Permanent

21001 Salaries - Exec 5,275 5,062 5,062 5,062 5,062 25,524 24,758 17.287 7.471 21002 Salaries - Award 24,365 27,700 27,700 27,700 27,700 135,165 131,110 18,468 112,642

29,640 32,762 32,762 32,762 32,762 160,689 155,868 35,755 120,113 Allowances

21010 On Call 717 620 620 620 620 3196 3,100 2,498 602 717 620 620 620 620 3,196 3,100 2,498 602

Labour Overheads 21012 Workcare - Prernium 317 299 299 299 299 1,514 1,468 402 1,066 21013 Super - Employer's Cont. 2,473 3,171 3.171 3,171 3,171 15,155 14,700 3,455 11245 21014 Annual Leave 2,189 2,619 2,619 2,619 2,619 12,666 12286 9,016 3,270 21015 Long Service Leave 131 832 832 832 832 3,460 3.356 7,887 (4,531)

5.110 6,921 6,921 6,921 6,921 32,794 31,810 20,760 11,050 Total Employee Costs 35.467 40,303 40.303 40,303 40,303 196,679 190,779 59,013 131,766

Contractors 23001 Building Mtce 190 417 417 417 417 1,857 1,801 704 1.097

23009 Cleaning 2,405 333 333 333 333 3,738 3,626 0 3,626 23011 Recreation o 250 250 250 250 1,000 970 0 970

23012 Recreation GST Free 3,855 2,500 2,500 2,500 2,500 13,855 13,440 0 13,440 6,450 3,500 3,500 3,500 3,500 20,450 19,837 704 19.133

Plant & Equip Costs 23060 Other Equip Purchase <52000 0 o 3,000 0 o 3,000 2,910 2,907 3

23065 Equipment Hire External o 5,000 5,000 5,000 5,000 20,000 19,400 0 19,400 0 5,0oo 8,000 5,000 5.000 23,000 22,310 2,907 19,403

Professional Services 23081 Promotion and Marketing - Othe 1,125 5,000 5,000 2,000 2,000 15,125 14,671 4,096 10,575

1,125 5,000 5,000 2.000 2,000 16,125 14.671 4.096 10575 Administrative Expenses

23092 Training 0 1,250 1,250 1,250 1,250 5,000 4,850 o 4,850 23105 Print, Copy, Fax Charges 152 625 625 625 625 2,652 2,572 0 2.572

152 1,875 1,875 1,875 1,875 7,652 7,422 0 7,422 Utilities

23127 Telephones 0 917 917 917 917 3,667 3,557 0 3,557

23131 Power 3 3,042 3,042 3,042 3,042 12,170 11,805 0 11,805 23132 Water 0 542 542 542 542 2,167 2,102 0 2,102

23133 Gas 0 167 167 167 167 667 647 0 647 3 4,667 4,667 4,667 4,667 18,670 18,109 0 18,109

Supplies 23135 Cleaning Supplies 0 167 167 167 167 667 647 0 647

23136 Clothing o o 3,000 0 0 3,000 2,910 45 2,865

23138 Catering 865 167 167 167 167 1,532 1,486 0 1,486

23140 Supplies - General 74 833 833 833 833 3,407 3,305 497 2,808

23142 Stationery 0 183 183 183 183 733 711 543 168 939 1,350 4,350 1,350 1,350 9,339 9,059 1.085 7,974

Total Materials & Services 8,669 21,392 27.392 18,392 18,392 94,236 91,409 8,792 82,617 ..

Finance Costs

25009 Bank Charges-GST Payable 394 375 375 375 375 1,894 1,837 242 1,595 394 375 375 375 375 1,894 1.837 242 9.595

Total Finance & Insurance Costs 394 375 375 375 375 1,894 1.837 242 1.595

TOTAL EXPENDITURE 44,530 62,070 68,070 59.070 59,070 292,809 284.025 58.047 215,978

Net Surplus / (Deficit) 2,917 (39,613) (45,613) (33,613) (33,613) (149,534) (145,048) (61,425) (83,623)

COM_SERVICE_PROD-#5915061 -v1-Competitive_Neutrality_Review_2010_-_Costing_exercise_for_Nth_Melb_Rec Centre

of 117

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of 117

09-10 Income Pool

ORACLE' ApplicaCions

Activity 4452 (North Melbourne Pool)


City of Melbourne Period: JUN-10 currency AUD Submitted: 05-J1JL-10 10:12:44

Annual YTD YTD Variance Monthly Monthly Variance Budget Budget Actual Fav(Unfav) Budget Actual Fav(Vnfav)

INCOME STATEMENT

REVENUE Federal Grants1204495 Fed Grant Approp School Holi 10,000.00 10,000.00 0.00 -10,000.00 0.00 0.00 0.00

10,000.00 10,000.00 0.00 -10,000.00 0.00 0.00 0.00

Total Grants and Subsidies 10,000.0(1 10,000.00 0.00 -10,000.00 0.00 0.00 0.00

Recreation Facility Fees

1305802 Rec Fac Fitness Classes 5,000.00 5.000.00 1,384.00 -3,616.00 0.00 960.00 960.00

"15822 Rec Fac Swim 127,000.00 127,000.00 133,370.00 6,370.00 0.00 0.00 0.00

5824 Rec Fac Aquatic Education (G 5,000.00 5,000.00 30,742.00 25,742.00 0.00 0.00 0.00

1305830 Rec Fac Aquatic Membership 5,000.00 5,000.00 11,375.0(1 6,375.00 0.00 0.00 0.00

1305832 Rec Fac School Holiday Frog ( 35,000.00 35,000.00 0.00 -35,000.00 0.00 0.00 0.00

1305835 Rec Fac Events 2,000.00 2,000.00 6,369.00 4,369.00 0.00 0.00 0.00

Total Recreation Facility Fees 179,000.00 179,000.00 183,240.00 4,240.00 0.00 960.00 960.00

Hire Fees 1317730 Hire Of Grounds/Facilities 2,000.00 2,000.00 3,351.00 1,351.00 0.00 0.00 0.00

1317772 Rec Fac Locker Hire 500.00 500.00 1,643.00 1,143.00 0.00 0.00 0.00

2,500.00 2,500.00 4,993.00 2.493.00 0.00 0.00 0.00

Total Fees & Charges 181.500.00 181.500.00 188,234.00 6.734.00 0.00 960.00 960.00

Publications & Promotion

1608910 Rec Fac merchandise 10,000.00 10,000.00 11,379.00 1,379.00 0.00 0.00 0.00

1608912 Ret Fac Vending 1,000.00 1,000.00 22.00 -978.00 0.00 0.00 0.00

1608913 Rec Fac Cafe 45.000.00 45,000.00 49,881.00 4.881.00 0.00 0.00 0.00

56,000.00 56.000.00 61,282.00 5,282.00 0.00 0.00 0.00

Total Sales & Recoveries 56,000.00 56.000.00 61,282.00 5,282.00 0.00 0.00 0.00

Total Revenue 247,500.00 247,500.00 249,516.00 2,016.00 0.00 960.00 960.00

COM_SERVICE_PROD-#591506PogeDompetitive__Neu1rali1y_Review_2010_-Costing_exercise_for_Nth_Melb_Rec_Cen1re.XLS

of 117

09-10 Income Pool

C7IRACLE" Applica[ions

Activity.-54452 (North Melbourne Pool)


City of Melbourne Period: JUN-10 currency AUD Submitted: 05-JUL-10 10:12:44

Annual YTD YID Variance Monthly Monthly Variance Budget Budget Actual Fav(Unfav) Budget Actual Fav(Unfav)

-----

EXPENDITURE Labour-Permanent2101080 Salaries - Exec 0.00 0.00 35,790.00 -35,790.00 0.00 3,517.00 -3,517.00

2101090 Salaries - Award 169,960.00 169,960.00 236,572.00 -66,612.00 1.700.00 15470.00 -13,771.00

169,960.00 169,960.00 272,362.00 -102,402.00 1,700.00 18,987.00 -17,288.00

Allowances

2103360 On Call 0.00 0.00 3,171.00 -3,171.00 0.00 239.00 -239.00

0.00 0.00 3,171.00 -3,171.00 0.00 239.00 -239.00

Overtime

2104400 Overtime 0.00 0.00 236.00 -236.00 0.00 0.00 0.00

our Overheads hi05500 Workcare - Premium

0.00

2,090.00

0.00

2,090.00

236.00

2,738.00

-236.00

-648.00

0.00

21.00

0.00

317.00

0.00

-296.00

2105510 Super - Employer's Cont, 16,340.00 16,340.00 21,824.00 -5,484.00 163.00 2,473.00 -2,310.00

2105520 Annual Leave 13,650.00 13,650.00 23.147.00 -9,497.00 137.00 2,244.00 -2,107.00

2105530 Long Service Leave 4,170.00 4,170.00 6,112.00 -1,942.00 42.00 88.00 -46.00

36,250.00 36,250.00 53,821.00 -17,571.00 363.00 5,121.00 -4,759.00

Total Employee Costs 206,210.00 206,210.00 329,591.00 -123,381.00 2,062.00 24,348.00 -22,285.00

Contractors

2301110 Building Mtce 1,000.00 1,000.00 1,616.00 -616.00 0.00 1,616.00 -1,616.00

2301140 Cleaning 3,000.00 3,000.00 336.00 2,664.00 0.00 336.00 -336.00

2301150 Recreation 1,000.00 1,000.00 0.00 1,000.00 0.00 0.00 0.00

2301151 Recreation GST Free 15,000.00 15,000.00 17,785.00 -2,785.00 0.00 -861.00 861.00

2301220 Parks & Gardens 10,000.00 10,000.00 0.00 10,000.00 0.00 0.00 0.00

30,000.00 30,000.00 19,737.00 10,263.00 0.00 1,092.00 -1,092.00

Plant and Equipment Costs 2303315 Other Equip Purchase 42000 15,000.00 15,000.00 38,691.00 -23,691.00 0.00 4,311.00 -4,311.00

15,000.00 15.000.00 38,691.00 -23,691.00 0.00 4,311.00 -4,311.00

Professional Services

2305105 Consultants 5,000.00 5,000.00 6.995.00 -1,995.00 0.00 225.00 -225.00

2305110 Promotion and Marketing - Ot 20,000.00 20,000.00 18.452.00 1,548.00 0.00 1.100.00 -1,100.00

25,000.00 25,000.00 25,447.00 -447.00 0.00 1,325.00 -1,325.00

Administrative Expenses

2305125 Training 15,000.00 15,000.00 648.00 14,352.00 0.00 0.00 0.00

15,000.00 15,000.00 648.00 14,352.00 0.00 0.00 0.00 I itilities

5320 Telephones 7,000.00 7,000.00 0.00 7,000.00 0.00 0.00 0.00

...,05330 Power 30,000.00 30,000.00 17,507.00 12,493.00 0.00 0.00 0.00

2305340 Water 25,000.00 25,000.00 13,219.00 11,781.00 0.00 1,182.00 -1,182.00

2305350 Gas 30,000.00 30,000.00 23,563.00 6,437.00 0.00 10,049.00 -10,049.00

92,000.00 92,000.00 54,289.00 37,711.00 0.00 11,231.00 -11,231.00

Supplies

2305510 Cleaning Supplies 25,000.00 25,000.00 0.00 25,000.00 0.00 0.00 0.00

2305520 Clothing 7,500.00 7,500.00 8,180.00 -680.00 0.00 0.00 0.00

2305580 Supplies - General 46,000.00 46,000.00 67,555.00 -21,555.00 0.00 4,457.00 -4,457.00

2305585 GST Free Supplies General 0.00 0.00 236.00 -236.00 0.00 0.00 0.00

2305590 Stationery 10,000.00 10,000.00 4,759.00 5,241.00 0.00 0.00 0.00

88,500.00 88,500.00 80,731.00 7,769.00 0.00 4,457.00 -4,457.00

Internal Revenue 1903915 Internal Recoveries - Other 0.00 0.00 -23,095.00 23,095.00 0.00 0.00 0.00

0.00 0.00 -23,095.00 23,095.00 0.00 0.00 0.00

Total Materials and Services 265,500.00 265,500.00 196,448.00 69,052.00 0.00 , 22,414.00 -22,414.00

Finance Costs

2503401 Bank Charges-GST Payable 1,500.00 1,500.00 0.00 1,500.00 0.00 0.00 0.00

2503700 Cashier Discrepancies 0.00 0.00 147.00 -147.00 0.00 0.00 0.00

1,500.00 1,500.00 147.00 1,353.00 0.00 0.00 0.00

Total Finance & Insurance Costs 1,500.00 1,500.00 147.00 1,353.00 0.00 0.00 0.00

Total Depreciation & Ammortisation 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Total Expenditure 473,210.00 473,210.00 526,185.00 -52,975.0(1 2,062.00 46,762.00 -44,700.00

Net Gain/(Loss) on disposal of assets

COM_SE R VI C E_P ROD-#591506faageGbmpetitive_Neutrality_Review_2010_-_ Costing_exercise_for_Nth_Melb Rec Centre.XLS

of 117

09-10 Income Pool

CDRACLE. Applications

Activity=54452 (North Melbourne Pool)



Annual

Budget

IT!)

Budget

ITD

Actual

Variance

Fav(Unfav)

Monthly

Budget

Monthly

Actual

Variance I

Fav(Unfav)

Total Proceeds from Sales

Total Carrying Amount of Assets Sold

Gain/(Loss) on Sale

Net Surplus(Deficit)

Underlying Surplus/(Defieit)

0.00 0.00 0.00 0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00 0.00 0.00 0.00

0000 0.00 0.00 0.00 0.00 0.00 0.00

225,710.00 -225,710.00 -276,669.00 -50,959.00 -2,062.00 -45,802.00 -43,740.00

225,710.00 -225,710.00 -276,669.00 -50,959.00 -2,062.00 -45,802.00n••n•nnn

-43,740.00

COM_SE RV IC E_PROD-#591506FargeC3Jmpetitive_NeutraIity_Review_2010_-_Costing_exe rcisefor_Nth_MeIb Rec Centre.XLS

of 117

11111111111

Maddocks

Appendix 4

Financial Spreadsheets for the MCB

See attached

[5640007: 7188163_5] DM#6177015 page 23

of 117

Melbourne City Baths 2009/10

Total costs including CN & Profit Adjustments

Direct Income (for year ended 30/6/10) (2,195,826) Direct Expenditure (for year ended 30/6/10) $ 2,156,265

Direct Net (Surplus)/Subsidy $ (39,561)

Corporate Overheads $ 925,103

Net (Surplus)/Subsidy excluding CN adjustments $ 885,542

CN Adjustments

Total Adjustments to Offset Competitive Advantages $ 938,162

Total Adjustments to Offset Competitive Dis-advantages $ (703,172)

Net CN Adjustment $ 234,990

Total Surplus/Subsidy including CN Adjustments 1,120,532

LESS: Recreational Swim Net CN Adjustments $ (8,265)

Adjusted Total (Surplus)/Subsidy including CN Adjustments 1,112,267

Required Profit Margin Percentage 8%

Total Profit Margin (excluding Recreational Swim Profit Margin) $ 27,487

Total (Surplus)/Subsidy including CN Adjustments & Profit Margin 1,139,753

CN Policy does not apply to Recreational Swim component. Therefore Recreational Swim CN components are excluded.

NOTES 1. CN Policy does not apply to Recreational Swim component. Recreational Swim Subsidy including Corporate Overheads is included, however Recreational Swim CN components are identified but not included in final calculations. 2. To offset Total (Surplus)/Subsidy including CN Adjustments & Profit Margin of $1,139,753 - revenue would need to increase by 52%.

CONLSERVICE_I-ROD-#5915024-0 -Competitive_Neutrality_Review_2010_-_Costing_exercise_mr_City_Baths A.% 26/08/20I0 104 PM

of 117


Internal Services Costs (Corporate Overheads)

Description of Internal Service Units Unit Cost Agreed Annual Usage

Annual Cost for Internal Services

Notes

Property - Spotless Contract $ 617,246 Advised by Property Services ((2/3 Wet; 1/3 Dry (ie: $411K; $206K)) HR - Services Employee $ 3,025.20 19.30 58,386 Number of EFTs BIS - Service provision Costs PC $ 3,692 6 $ 22,152 Based on Number of PC's at City Baths FIN SERV - Accounts Payable Invoice $ 7.32 1715.00 $ 12,549 Number invoices processed for 2009-10 FIN SERV - Supply Pur Ord $ 8.32 586.00 $ 4,876 Number purchase orders closed for 2009-10 Customer Relations Employee $ 2,766.04 19.30 53,385 Number of EFTs (Alt Alloc: Rev $22,604; Exp $24,402) 50% of Governance Services (excluding insur Employee $ 2,152.00 19.30 41,534 Number of EFTs (Alt Alloc: Rev $48,696; Exp $52,569) Insurance premiums $ 64,375 Legal Services Employee $ 1,336.40 19.30 25,793 Number of EFTs (Alt Alloc: Rev $10,921; Exp $11,790) Procurement and Contracts Services Employee $ 560.00 19.30 $ 10,808 Number of EFTs (Alt Alloc: Rev $4,576; Exp $4,940) Recreation Services Branch Mgmt & Branch Admin Support Staff Costs $ 14,000

5% of Branch Manager and Branch Admin Support staff time was dedicated to City Baths (therefore 5% of their labour costs)

Total of Other Corporate Overheads I I I I $ 307,857

Total Annual Cost of Internal Services Costs (Corp o/h's) , $ 925,103

,

Corp OH COM_SERVICE_PROD4b915024-v1-Competitive_Neutrality_Review_2010_-_Costing_exercise Jor_City_Baths As at 26/08/20W 2:04 PM

of 117

Return on Fixed Assets- REAL ESTATE ONLY (The need for this adjustment may be eliminated by imputing a commercial rent)

$ 4,970,000

$

$ 2,740,000 8.00%

$ 616,800

Value of Assets utilised in work area:Leased area $960K; Wet area $2.67M; Dry area $1.34M. (Leased 19%; Wet 54%; Dry 27%). Buildings

Building Enhancement scheduled for 2010/11

Leased area $520K; Wet area $1.48M; Dry area $740K. (Leased 19%; Wet 54%; Dry 27%). Land (owned by Crown)

Required rate of return - Use Rate as agreed by the Office of Local Government

Leased area $117K; Wet area $333K; Dry area $167K. (Leased 19%; Wet 54%; Dry 27%). Total Adjustment

Return on Other Fixed Assets

Value of Assets utilised in work area Plant and Equipment Required rate of return - Use Rate as agreed by the Office of Local Government Total Adjustment

401,763 8.00%

32,141 Dry Plant & Equipment

Return on Working Capital Total Cost of Service Provision (Direct Operating Surplus less Cleaning costs) % of Total Cost evaluated as working capital (2 months)

$ 577,685 16.67%

$ 96,281 8.00%

$ 7,702

Total Working Capital Required rate of return - Use Rate as agreed by the Office of Local Government Total Adjustment


Competitively Neutral Cost Adjustments Adjustments to offset Competitive Advantages

Adjustment to include rate of return on Assets and Working Capital

CN Adjust. COM_SERVICE_PROL,45915024-v1-Competitive_Neutrality_Review_2010_-_Costing ex..cise_for_City_Baths As at 26/08/2010 2:04 PM

of 117

99,400 Leased area $18K; Wet area $54K; Dry area $27K. (Leased 19%; Wet 54%; Dry 27%). Depreciation of adjusted value of building (@ 2%)

(The need for this adjustment is usually eliminated by imputing a commercial rent in full costs.)

Full value of Tax & Rates exemption 123,307Leased area $23K; Wet area $67K; Dry area $33K. (Leased 19%; Wet 54%; Dry 27%).

Full Cost of Employee and Management Salaries - Excluding Superannuation Rate of Payroll Tax Full value of Payroll Tax exemption

1,188,104 4.95%

58,811 Per labour % allocation

Adjustment to offset other advantages due to Government ownership.

Please enter here the value of any other advantages that have been assessed as accruing to Council due to it being a Government organisation. Full value of other advantages

Total adjustment offsetting Competitive Advantages

Total Value of Adjustment for Advantages 938,162 I

Adjustment to offset depreciation

Adjustment to offset exemption from Land Tax & Council Rates

Adjustment to offset exemption from Payroll Tax

CN Adjust. COMSERVICE_PROu-#5915024-0 -Competitive Neutrality_Review_2010_- Costing_exv.cise_for_City_Baths As at 26/08/2010 2:04 PM

of 117

Adjustment to offset other Disadvantages to Council due to Government ownership. The heritage listing of the Building causes significant expense to be incurred. Also, City Baths have no control over the cleaning cost amount assigned to the facility (the cleaning contract is a fixed term centralised contract covering all CoM properties). The amounts are considerably higher than industry norms. The additional cost is estimated to be approximately $440K.

(2/3 Wet; 1/3 Dry (ie: $293K; $147K) Cleaning Cost Disadvantage Full value of disadvantage 440,000 I

Employee Costs Studies on wage comparisons have shown that the CoM Labour Costs 1,315,859

EBA sees significantly higher employee costs. For recreation and leisure industry staff the CoM average wage rate is at least 20% over the standard industry rate.

Full value of disadvantage 263,172

Total adjustment offsetting Competitive Disadvantages

Total Value of Adjustment for Disadvantages 1$ 703,1721

Adjustments to offset Competitive Disadvantages

ON Adjust. COM_SERVICE_PROL0-#5915024-v1-Competitive_Neutrality_Review_2010_-_Costing_ex,,cise_for_City_Baths As at 2610812010 2:04 PM

of 117

C/TY BATHS - SUBSIDY REDUCTION OPTIONS

Total Subsidy including CN Adjustments $ 1,139,753

2009110

,REDUCED OPENING HOURS (CLOSING ONE HOUR EARLIER (MON - THU) -5 43,493 Subsidy Reduction Option 1

MEMBERSHIPS ALL PRICED AT FULL CLUB BASED RATE -$ 156,233 Subsidy Reduction Option 2

ALL CASUAL SWIM FEES AT FULL ADULT RATE -$ 17,306 Subsidy Reduction Option 3

TOTAL REDUCTIONS -S 217,032

Net potential total Surplus/Subsidy including CN Adjustments $ 922,721

OPTION 1 - REDUCED OPENING HOURS (CLOSING 2 HOURS EARLIER AT 8PM (MON - THURS)1 -9 43,493

Days Weeks Super

Closing the facility at 8pm Monday to Thursday Rate 4 52 9%

Oncosts (2%)

Hours Saved Stall 28.42 $ 767 $ 39,902 $ 3,591 $ 798 Total Savings PA

2.25 3 S 192 $ 43,493

OPTION 2 - MEMBERSHIPS ALL PRICED AT FULL CLUB BASED RATE -$ 156,233

CITY BATHS Additional Income From Converting All Memberships To Club Based on 2009-10 Pricing Club Rate

26 Membershi• T •e # Rate Debits .er ear Total $41.99

OPTION 3 - ALL CASUAL SWIM FEES AT FULL ADULT RATE -9 17,306.00

2009-10 Pool Entries If All Converted to Adult Pool Entry Only

Rate Number Total Charge Only $5.30 Adult

Adult $ 5.30 19,522 103,466.60 5 103,466.60 Student 4.30 4,300 S 18,490.00 5 22,790.00 Concession $ 2.50 4,645 11,612.50 5 24,618.50

133.569.10 $ 150,875.10

Extra 9 17,306.00

COM_SERVICE_PROD-#5915024-v1-Competitive_Neutrality_Review_2010_-_Costing_exercise_for_City_Baths

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CITY BATHS SIGNIFICANT BUSINESS CALCULATIONS - 2009/10 A Significant Busineastes Incorna Total Labour Cost

Recreation Contractors

Utilities AI other direct costs

Direct Net Surplus

((Subsidy)

Corporate Overheads (Cleaning)

Corp Overheads

/Other)

Net Surplus ((Subsidy)

excluding Chl adjustments

Add CN Advantage

Adlusbnents n osome <law a

steat,

Add CR Advantage Adjusbnents luso.,

Vv.,/

Less CN Disadvantage

adjustment Cleaning contract

Lass CN DIsadvantage

Adjustment Salaries

Total Surplus Subsidy) Including CN Adjusbnents

ADJUSTED Total Surplus )(Subsidy)

Including CR Adjustments (CR

POLICY DOES NOT APPLY TO

RECREATIONAL SWIM COMPONENT)

Total Proftt Margin for CN purposes

(al 8%). (Escludas Recreational Seam

component)


Including CN Adjustments & Proflt Margin

Required % Mcrease In

Revenue to offset total Surplus)

(Subsidy) Including CN ad(ustments &

Profit Margin

Recradonal Swim (Soli, SpadS ann. Seen midrip. 10%45 al other nvhhips (inducing Corporals nVslup). Hire of Pool (sally)

$ 493 671 0 593.218 $ 69856 210,918 380,382 249.534 38.789 768.6 4 273 237 26.5 7,892 $ 1118.64 3 (7 6,949) S 17685841 5 (788 514) 56%

Aquatic Education 5 212,752 5 22.896 5 54.156 5 5,251 8,141 122,300 107.539 5357 9,413 119,930 1,023 76,664 $ (4,579) 5 (30,297) 5 (30,297) 5 (2,424) (32,731) 15%

Dry • Health and Fltness ISyns, Paean* kensta. 70% 01 all 75c0 Watiosl)

5 846,867 9 510.753 5 44.488 5 31,768 217.15 57.293 134,747 142,891 - 334931 171,t21 27,297 040 $ (122,151) 0 (315,859) 0 1315,8591 5 1252691 5 (341,128) 40%

Dry - Wellbeing (Flamm class.. Wolnom seam

Massage. 20% at at new refshps1

5 344,067 5 40,095 5 133,457 5 21,251 16,389 127,826 54,889 10,784 62,193 69,990 2,080 . 39,121 $ (9,219) 5 38,443 5 38,443 3,075 41,513 -12%

Squash, TannbtMetball Court Him

5 61.695 5 20,743 $ , 10.567 7,375 23.010 9.816 4.853 8,341 12,517 927 - 6,997 5 (4,149) 5 6,042 5 6.042 S 483 5 6,525 -11%

Locker Hire, Towel Hire, Merchandise, Vending

2 108.ttt 5 8,326 5 772 2,960 93,630 53,927 1.948 37,755 80,141 372 38,444 5 (1,665) 5 17,351 5 17,351 $ 1,oea 5 18.739

1

-13%

School Holiday Program 5 42.898 5 9,219 $ 3,278 30,201 5794 2.157 21,251 5663 412 4,842 5 (1,844) 5 15,562 5 18,892 1,509 20.371 -48% Commercial Lease ot part of ',trading

5 86,488 5 4,609 5 ,639 80,240 078 79,161 158.000 206 (922) $ (75.123( 5 (78,123) (0250) $ (84,373)

li TOVAL $ 2,195,826 $ 1,315,859 $ 232,098 $ 140,455 $ 467,853 $ 39,561 $ 617,246 $ 307,857 $ (885,542) $ 879,350 $ 58,811 t (440,000)A $ (263 172) (1,120,531) (1,112,266) (27,487) (1,139,753)

(371061 I 52%

28 Total pm Income Saternents

5 2,195.826 5 1,315,859 $ 232,098 140.455 6 487,354 0 39,561 Excluding Recreational Svam

NOTE: CN Policy does not apply to Recreational Swim component. Recreational Swim Subsidy including Corporate Overheads is included, however Recreational Swim CN components are identified but not included in final calculations.

CN Calculations Net Direct Surplus Corrorate Overheads (Cleaning)

Otha- Corporate Overheads

Oth, CN Advantage egustmene Less CN Disadvantage adjustment Clearung

LOSS CN noadvanlage

adjust/manta &dams

Sub Total

$ (39,560) 517,246 (2(3 Wet 1/3 Dry

On 5411K, 5206K)

$ 307.857

$ 938.162

$ (440,000)12/3 Wet 173 Dry lie $293K. 6147K)

$ (283.172)

$ 1,120,633

Labour Cost Breakdown X Percentag•

Ernpbwe Type

1

Wet 5 total Recreational Swint (Svsm •

Spa/Sauna Swan istship,10% of all other RI/ships onckalintl Coq.. elehp). Hee of Pod facility)

Aquatic Education

Locker Hire, Towel Hire,

Merchandise, Vending

Wet Total % Dry 5 Total Dry - Health and Fitness (c, Personal term, 70, , „,, oo,„‘,..,,,,,,,

Dry - Wellbeing Inners sm.., We.......''''' Massage 20 r . of SI other a/shoal

Squash, Tennis/Netball Court Hire

School Hotiday Program

Commercial Lease of part of building

Dry Total X

Gym Instructors-

95% 5% 0% 0% 0% 100% Lifeg y ards 95% 5% 0% 100% CustServKe Staff 95% 3% 2% 100% 80% 10% 7% 2% 1% 100% Management 95% 314 2% 100% 90% 5% 2% 2% 1% 100% Labour Total 5 624,440 95% 4% 1% 100% 5 691,419 88% 7% 3% 1% 1% 100% Recreation Contractors 3 54,156 0% 100% 0% 100% 5 177,942 25% 75% 084 0% 0% 100%

Total Utilities Breakdown $ Total Recreational Swkn (S.m. Spa/Sauna, Swim mishes 10% dad Max egships (a/Skid/nu Corporato m/shp). Hee of Pod facility)

Aquatic Education

Locker Hire, Towel Hire,

Merchandise, Vending

Dry . Heaith and Fitness luax

personal nen, 70% of er dher 1.110,e,

Dry - Wellbaing 17lantss aosss

1,e,^440000 °``-‘ laassag• 20r0 dal sthw mantas,

Squash. Tennis/Netball Court Hire

School Holiday Program

Commercial Lease of part of building

Total %

Power $ 70,390.00 25% 2.5% 2 5% 35% 25 0% 10% 0% 0% 100% 5 17,723 1,772 5 1,772 24,812 5 17,723 7,089 3 5

Water $ 26,265.00 75% 5% 0% 10% 5% 5% 0% 0% 100% 5 19,899 $ 1,313 5 5 2,827 5 1,313 1,313 5 $

Gas $ 43,300.00 75% 5% 0% 10% 5% 5% 0% 0% 100% 5 32,47500 $ 2.16500 5 3 4,330.00 $ 2,165.00 $ 2,16500 5

COM_SERVICE y00045916024,1-Compoliti00 Nelltrakty FSSrvieW 2010 - Crating ottwaso tor City Baths %LS

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Total 09-10 Income

RACLE"10 Income Statement - Detail

Applications City of Melbourne Period: JUN-10 currency AUD

IcD

FINAL INCONIE STATEMENT 2009/10 Submitted: 05-JUL-10 10:05:46

Org=453 (City Baths), Entity=CM (City of Melbourne)Annual YTD YTD Variance Monthly Monthly Variance Budget Budget Actual Fay(Unfav) Budget Actual Fav(Unfav)

INCOME STATEMENT

__-

REVENUE

Federal Grants

1204495 Fed Grant Approp School Holiday 0.00 0.00 3,048.00 3.048.00 0.00 0.00 0.00

0.00 0.00 3,048.00 3,048.00 0.00 0.00 0.00

Total Grants and Subsidies 0.00 0.00 3,048.00 3,048.00 0.00 0.00 0.00

1305602 Rec Fac M/Ships Peak Student 0.00 0.00 59.00 59.00 0.00 0.00 0.0(

1305603 Rec Fac NI/Ships Corporates 95,000.00 95,000.00 80,181.00 -14.819.00 10,000.00 1,646.00 -8,355.00

Recreation Facility Fees

1305604 Rec Fac NI/Ships Peak Club 875.000.00 875,000.00 887,074.00 12,074.00 72,917.00 73,165.00 248.00

1305605 Rec Fac NI/Ships Peak Gold 2,000.00 2.000.00 3,041.00 1,041.00 167.00 89.00 -78.00

C0M_SERVRIEgePROD-95915024-v1-Cornpetaive_Neutrality_Review_2010_-_Costing_exercise_tor_City_Baths.XLS

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FINAL INCOME STATEMENT 2009/10

ORACLE' Appl icarions

Total 09-10 Income



Org=153 (City Baths), Entity=CM (City of Melbourne)Annual Budget

______

YTD Budget

YTD Actual

Variance Fay(Unfay)

Monthly Budget

Monthly Actual

Variance Fav(lInfav)

=======_-

2301300 Graphic Design 0.00 0.00 195.00 -195,00 0.00 0.00 0.00

241,000.00 241,000.00 260,906.00 -19,906.0(1 19,993.00 42,402.00 -22,409.00

Plant and Equipment Costs 2303315 Other Equip Purchase 42000 30.000.00 30,000.00 45.484.00 -15,484.00 2,500.00 18,716.00 -16,216.00

2303320 Equipment Parts 0.00 0.00 3,165.00 -3,165.00 0.00 587.00 -587.00

2303330 Office Equip Licences/Rent 0.00 0.00 8.154.00 -8,154.00 0.00 2.807.00 -2,807.00

2303335 Office Equip Maint Charges/Supp 10.000.00 10,000.00 11,413.00 -1,413.00 850.00 755.00 95.00

2303360 Equipment Purchase >$2000 0.00 0.00 9.397.00 -9,397.00 0.00 284.00 -284.00

40,000.00 40,000.00 77,612.00 -37.612.00 3,350.00 23.149.00 -19,799.00

Professional Services 2305105 Consultants 5,000.00 5,000.00 1.62800 3,372.00 500.00 0.00 500.00

2305110 Promotion and Marketing - Other 80,000.00 80,000.00 124,408.00 -44,408.00 6,650.00 69,572.00 -62,922.00

85,000.00 85,000.00 126,036.00 -41,036.00 7,150.00 69.572.00 -62,422.00

Administrative Expenses 2305125 Training 15,000.00 15,000.00 24,667.00 -9,667.00 500.00 1,084.00 -584.00

2305132 Conferences - Local 6,000.00 6,000.00 2,000.00 4,000.00 0.00 0.00 0.00

2305135 Travel - Local 0.00 0.00 806.00 -806.00 0.00 15.00 -15.00

2305146 Print, Copy, Fax Charges 10,000.00 10,000.00 5.280.00 4,720.00 850.00 1.761.00 -911.00

2305195 Membership/Subscriptions 15.000.00 15,000.00 19.571.00 -4,571.00 1,250.00 2.199.00 -949.00

46,000.00 46.000.00 52,324.00 -6,324.00 2,600.00 5,059.00 -2,459.00

Utilities 2305320 Telephones 12,000.00 12.000.00 4.928.00 7,072.00 1,000.00 357.00 643.00

2305330 Power 75.000.00 75,000.00 69,037.00 5.963.00 6,250.00 6,513.00 -263.00

2305340 Water 40,000.00 40,000.00 26.265.00 13,735.00 3,337.00 4.032.00 -695.00

2305350 Gas 60.000.00 60,000.00 43.300.00 16.700.00 5,000.00 2,751.00 2,249.00

2305360 Public Lighting Electricity 0.00 0.00 1.853.00 -1,853.00 0.00 0.00 0.00

187,000.00 187,000.00 145,383.00 41,617.00 15.587.00 13.652.00 1,935.00

Supplies 2305510 Cleaning Supplies 0.00 0.00 610.00 -610.00 0.00 610.00 -610.00

2305520 Clothing 10,000.00 10,000.00 27,419.00 -17419.00 850.00 17,514.00 -16,664.00

2305530 Health 0.00 0.00 480.00 -480.00 0.00 0.00 0.00

2305560 Catering 0.00 0.00 12,312.00 -12,312.00 0.00 547.00 -547.00

2305580 Supplies - General 100,000.00 100,000.00 81,034.00 18,966.00 8,500.00 12,838.00 -4,338.00

2305585 GST Free Supplies General 0.00 0.00 971.00 -971.00 0.00 100.00 -100.00

2305590 Stationery 5,000.00 5,000.00 9.737.00 -4,737.00 500.00 1,572.00 -1,072.00

115.000.00 115,000.00 132,563.00 -17,563.00 9,850.00 33,181.00 -23,331.00

Internal Revenue 1903915 Internal Recoveries - Other 0.00 0.00 -11.679.00 11,679.00 0.00 0.00 0.00

0.00 0.00 -11,679.00 11.679.00 0.00 0.00 0.00

Total Materials and Services 714,000.00 714,000.1)0 783,145.00 -69,145.00 58,530.00 187,015.00 -128,485.00

Finance Costs 2503110 Bad Debt Provision 0.00 0.00 997.00 -997.00 0.00 949.00 -949.00

2503401 Bank Charges-GST Payable 10.000.00 10,000.00 7.555.00 2,445.00 850.00 590.00 260.00

2503700 Cashier Discrepancies 0.00 0.00 -20.00 20.00 0.00 -13.00 13.00

10,000.00 10,000.00 8,532.00 1,468.00 850.00 1,526.00 -676.00

Total Finance & Insurance Costs 10.000.00 10,000.00 8,532.00 1.468.00 850.00 1,526.00 -676.00

Depreciation - Other Assets 2706600 Depn - Plant & Equipment 55,501.00 55,501.00 46,011.00 9.490.00 4,626.00 3.134.00 1,492.00

55.501.00 55,501.00 46.011.00 9,490.00 4.626.00 3,134.00 1.492.00

Total Depreciation & Ammortisation 55,501.00 55,501.00 46.011.00 9,490.00 4,626.00 3,134.00 1,492.00

Total Expenditure 2,100,931.00 2,100,931.00 2,153,547.00 -52,616.00 210.853.00 355,881.00 -145,028.00

Net Gain/(Loss) on disposal of assets

Total Proceeds from Sales 0.00 0.00 0.00 0.00 0.00 0.00 0.00,

Carrying Amount of Assets Sold 2830310 WDV Other Fixed Assets 0.00 0.00 -2.718.00 -2,718.00 0.00 0.00 0.00

Total Carrying Amount of Assets Sold 0.00 0.00 -2.718.00 -2,718.00 0.00 0.00 0.00

Gain/(Loss) on Sale 0.00 0.00 -2,718.00 -2.718.00 0.00 0.00 0.00

Net Surplus(Deficit) 17.069.00 17.069.00 39,561.00 22,492.00 -32,270.00 -182.057.00 -149,788.00

C0M_SERVe9POD-#5915024-91-Competitive_Neutrality_Review_2010_-_Costing_exercise jor_City_Ballis.XLS

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City of Melbourne


Period: JUN-10 currency AUD Submitted: 19-AUG-10 16:36:40

'ORACLE' Applic 6 z ion:

Orgs153 (City Baths), Entity•CM (City of Melboume), Activity=94403 (MCH Aquatics) Annual YTD YTD Variance Monthly Monthly truisms Budget Budget Actual Fey(Urrfer) Budget Actual FtteMInht4

eeeeeereeaaaa ma mom= ameeemeae seasesaaaeasta eseametaaaee meeeeeeee

INCOME STATEMENT

Recreation Facility Fees 13051122 Rec Far Swim 220,000 220,000 204,349 (15,651) 18,333 15.058 (3,275)

1305824 Rea Fac Aquatic Education (G 110,000 110,000 212.752 102,752 9,167 21,159 11,992

1345826 R. Fac Spa & Sauna 35,000 35,000 33,133 (1,866) 2,917 3,712 796

1305830 Rec Fite Aquatic Membership 110,000 110,000 109,081 (919) 9,167 10,430 1,264

Total Recreation Facility Fees 475,000 475,000 559,314 84,314 39,583 50,359 10,776

Hire Fe.

1317774 Rea Fac loud Hire 6,000 6,000 7405 1.405 500 565 65

1317772 R. Far Locker Hire 40,000 40,000 35,352 (4,648) 3.333 3,090 (243)

46,000 46,000 42,757 (3,243) 3,833 3,655 (178)

ond Fees & Charges 521,000 521,000 602,071 81,071 43,417 54,014 10,597

I ' Publications & Promotion , 1 1608910 Rec Far merchandise 80,000 50,000 63,240 (16,760) 6.667 4,070 (2,597)

80,000 80,900 63,240 (16.760) 6,667 4,070 (2,597)

Totd Sales & Recoveries 80,000 80,000 63,240 (15,760) 6,667 4,070 (2,597)

Total Revenue 601,000 601,000 665,312 64,312 50.083 58,083 8,000

EXPENDITURE Labour-Permanent2101080 Salaries - Exec 57,520 57,520 53,688 3,832 4,791 4.234 556

2101090 Salaries - Award 407,300 407,300 457,943 (50,643) 50.907 57,614 (6,707) 464,820 464,820 511,631 (46,611) 55,698 61,849 (6,151)

Lahotu•Non'Permanent 2102200 Temporary 0 0 8,728 (13,728) 0 0 0

0 0 8,728 (8,728) 0 0 0 ABowances 2103360 On Call 0 0 2,829 (2,629) 0 0 0

0 0 2,829 (2,829) 0 0 0 Overtime 2104400 Cherlinx 0 0 35 (35) 0 0 0

0 0 35 (35) 0 0 0 Labour Overheads 2105500 Workcare - Premium 5,720 5,720 6,433 (713) 680 745 (65)

2105510 Super - Employer's Cont. 44,780 44,780 48,981 (4,201) 5,281 5,806 (525)

2105520 Annual Leave 37,570 37,570 40,922 (3,352) 4,393 5,288 (895) 2/05530 Long Service Leave 12,790 12.790 4,882 7,908 1,156 (1,631) 2,987

100,860 100.860 101,217 (357) 11,511 10,009 1,503 Teta/ Ernplov ee Costs 569,680 565,680 624,440 (56,760) 67,209 71,857 (4,648)

COM_SERvICE_PROD.115915024,1 .Cormefitive _Neutrality Reew 2010 Costray exercUe tor City Baths

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apps PROD.world 11.5 JUN-102010/08/30879757173575AUD19135CM 453 54404 581003NCP-998SOLGL 453 CM 54404 1

1 REPORT OUTPUT ADVANCED SPREADE 1 FORMATTED

10 Income Statement - Detail City of Melbourne Period: JUN-10 currency AUD Submitted: 19-AUG-10 16:40:36

Org=453 (City Baths), Entity.CM (City of Melbourne), Activity.54404 (CB Customer SOTVia!)

YTD Actual

171512.7.7

INCOME STATEMENT

REVENUE Property Revenue 1402200 Commercial Rentals • GST 86,488

86.488

Total Fees & Charges 86,488

Total Revenue 86,488

EXPENDITURE

Total Depreciation & Ammorllontion 0

Net Gain/(,as) on disposal of assets

Total Proceeds Dom Sales 0

Total Carrying Amount of Assets Sold 0

Gain/(Loss) on Sale 0

Net Surplus(Dericit) 86,488

COM_SERVICE_PROD-4i5915024-0-Competitioe_Neutrality_Review_2010_-_Cosfing_exercisejor_City_Raths

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1 1 1111111111111111111111111111111111111111111111[11111111111111

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Appendix 5

Advertisement

See attached

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Public Interest Test - North Melbourne Recreation Centre and Melbourne City Baths

Melbourne City Council is undertaking a public interest test to determine whether National Competition Policy (and, in particular, Competitive Neutrality Policy) should be applied to its operation of the North Melbourne Recreation Centre and the Melbourne City Baths.

The public interest test will examine Council's current involvement in these facilities and explore possible alternatives. As part of this process, a Discussion Paper has been prepared and an Information Meeting will be held for those interested in attending.

The Discussion Paper may be obtained from Council (contact 9658 9658). The Information Meeting is to be held on Thursday, 9 September 2010 from 5.30pm to 7pm in the Council meeting room at the Melbourne Town Hall, 90-120 Swanston Street, Melbourne, If you would like to attend, please RSVP by contacting Council on 9658 9658.

Written submissions are also invited. Submissions received by Council by close of business on Friday, 24 September 2010 will be considered. Submissions should be marked "Public Interest Test - North Melbourne Recreation Centre and Melbourne City Baths" and posted to Manager Recreation Services, GPO Box 1603, Melbourne 3001, delivered to the front desk of the Town Hall marked "Attention Manager Recreation Services" or forwarded to recreation@rnelbourne. vic.gov.au by close of business on Friday, 24 September 2010. Please note that submissions will be made available for public inspection.

Any enquiries concerning this matter should be directed to Council's Manager Recreation Services (9658 9658).

Dr Kathy Alexander Chief Executive Officer

' CITY OF J 1-1Li3OUR1IE

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Appendix 6

Notices posted in Centres

See attached

[5640007: 7188163_5] DM#6177015 page 25

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Notice posted in the centres

MELBOURNE CITY COUNCIL

IMPORTANT NOTE TO USERS

Council is currently examining the operation of the North Melbourne Recreation Centre and the Melbourne City Baths and

welcomes your comments and feedback.

Council's approach is to:

• provide a range of programs that are responsive to the needs of users and the community (including special needs and minority groups)

• have a pricing structure that encourages participation in aquatic, health and wellbeing activities

• have a level of staffing that can respond to site-specific service and safety requirements and community expectations.

Do you agree?

Council currently operates these Centres in-house. To meet its public policy objectives, Council subsidises the costs of operation.

Do you support this approach?

Some ways to reduce the costs to Council would be to increase prices or reduce the range or extent of services provided.

Would you support this?

IF YOU ARE INTERESTED IN FINDING OUT MORE:

An Information Meeting will be held on Thursday, 9 September 2010 from 5.30pm to 7pm in the Council meeting room at the Melbourne Town Hall, 90-120 Swanston Street, Melbourne.

A Discussion Paper is available from the Reception at the Recreation Centres or the Customer Service Desk at the Town Hall (contact 9658 9658).

Written submissions are also invited (required by close of business on Friday, 24 September 2010; post to Manager Recreation Services, GPO Box 1603, Melbourne 3001, deliver to front desk of the Town Hall marked "Attention Manager Recreation Services" or forward to recreationemelbourne.vic.gov.au ).

PLEASE HAVE YOUR SAY

Write to Council or come along to the Information Meeting

For further information, please contact Council's Manager Recreation Services (9658 9658)

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Appendix 7

Discussion Paper

See attached

[5640007: 7188163_5] DM#6177015 page 26

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MELBOURNE MTY COUNCL

ENSCUSSDON PAPER

NORTH MELBOURNE RECREATION CENTRE AND MELBOURNE CITY BATHS

INTRODUCTION

Melbourne City Council (Council) is undertaking a public interest test to determine whether National Competition Policy (and, in particular, Competitive Neutrality Policy) should be applied to its operation of the North Melbourne Recreation Centre and the Melbourne City Baths.

Competitive Neutrality Policy aims to ensure that significant government businesses do not enjoy any net competitive advantages simply as a result of their public sector ownership. However, this is not to override public policy objectives. Conducting a public interest test is a way of determining whether the application of Competitive Neutrality Policy is in the public interest. It involves examining Council's current involvement in the activities under review and exploring possible alternatives in a way consistent with Competitive Neutrality Policy.

This Discussion Paper sets out Council's policy objectives and information on the current operation of the North Melbourne Recreation Centre and the Melbourne City Baths and explores possible alternatives.

The public interest test will assess whether the current arrangements are in the public interest by meeting Council's policy objectives in circumstances where those objectives would otherwise be jeopardised and are best met through the current arrangements.

Written submissions in response to this Discussion Paper are invited. Submissions should be marked "Public Interest Test — North Melbourne Recreation Centre and Melbourne City Baths" and posted to Manager Recreation Services, GPO Box 1603, Melbourne 3001, delivered to the front desk of the Town Hall, located at 90-120 Swanston Street, Melbourne marked "Attention Manager Recreation Services", or forwarded to recreation©melbourne.vic.gov.au by close of business on Friday, 24 September 2010.

An information meeting will be held on Thursday, 9 September 2010 from 5.30pm to 7pm in the Council meeting room at the Melbourne Town Hall. If you would like to attend, please RSVP by contacting Council on 9658 9658.

OBJECTIVES

Traditionally, local government has provided a range of facilities for their communities, including leisure centres. These facilities were provided for the 'public good', ie improving the quality of life in a community.

The State Government has singled out council owned aquatic and leisure centres for the purposes of Competitive Neutrality Policy and, in particular, amended its policy in this regard (see Amendment to Competitive lVeutrality Policy, July 2003 — Application of CN Policy to Council owned Aquatic and Leisure Centres). For example, it has stated:

Council owned leisure centres are multi-purpose facilities that act as 'community hubs' designed to service the specific needs of a broad cross-section of the community. The Aquatic facilities offer both swim class and recreational swimming components. The swim class component is viewed as a significant business to which CN cost adjustments must be identified. The recreational aquatic component is not viewed as a business activity but rather a public amenity. Viewed as a public amenity the CN cost adjustments may be identified but not included in the costing structure.

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This position is reconfirmed in the State Government's revised general policy statement for local government, entitled National Competition Policy and Local Government (December 2008). For example, this provides:

The amendment to competitive neutrality policy distinguished between two broad aquatic based activities: learn-to-swim programs and recreational activities (recreational swimming, wave pool). Aquatic recreation activities are now regarded as non-commercial activities, while learn-to-swim programs are regarded as commercial, business activities. The aquatic recreation activities are not subject to competitive neutrality. This position was consistent with the position regarding council owned outdoor swimming pools, which councils have traditionally subsidised. Other facilities, such as aerobic, gym and sauna facilities continue to be regarded as commercial, business activities for competitive neutrality purposes.

Council has a well-integrated service planning and development process that ensures services respond to community need, and are managed effectively and responsibly. Council recognises that, because it is a capital city municipality, it has to respond to a diverse and unique range of service, program and facility needs and expectations.

Under the Local Government Act 1989, one of the objectives of Council is to improve the overall quality of life of people in the local community. Council's functions under that Act include planning for and providing services and facilities for the local community, and providing and maintaining community infrastructure.

Future Melbourne is the community's vision for the management, development and direction of the City of Melbourne to 2020 and beyond, replacing the former "City Plan". Future Melbourne is the vision behind Council's actions during the next decade, as the Melbourne community collaborates in steering our city towards a bold, new, sustainable future. One of the goals in the Future Melbourne plan is: "To improve the physical and mental health and wellbeing of residents in the municipality."

Council Plan 2009-2013 is Council's statement of vision, mission, goal and objectives for the current term in office. It has a medium term outlook while the Future Melbourne Plan has a long range view. A key objective in Council Plan relating to health and wellbeing is "Support increased participation in physical activity through sport and recreation services."

Council's response to this strategic direction, in terms of leisure and recreation, is communicated primarily in the 'Active Melbourne Strategy'. This Strategy was approved by Council for a 10 year period concluding in 2016 and supports the development and operation of community recreation facilities where opportunities present.

In the Active Melbourne Strategy, Council has developed a number of public policy objectives/goals to guide the provision of its leisure and recreation services and programs, namely:

Planning & Policy: recognition of the importance of providing physical activity opportunities for the community will become a major factor in all planning across Council.

Place: the physical environment is a crucial factor in enabling activity.

Promotion: more leisure choices through improved management and dissemination of information about opportunities and benefits.

People: in conjunction with key stakeholders provide a co-ordinated, efficient and effective delivery of recreation and leisure opportunities.

Provision: provide more accessible and inclusive recreation and leisure facilities, programs and services that are responsive to local needs.

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These translate into the following in relation to the North Melbourne Recreation Centre and the Melbourne City Baths:

providing a range of services and programs that responds to the needs of the 'catchment' for the Centres, including programs that cater for special needs and minority groups;

a pricing structure that encourages participation in aquatic health and wellbeing activities, recognises the requirements of special needs groups and represents 'value for money' based on industry benchmarks;

a range of programs and activities that are provided and/or developed in conjunction with community groups, agencies, sporting and recreation associations and commercial operators;

health and wellness service and program 'packages' that are provided in collaboration with a range of provider partners; and

having a level of staffing that can respond to site-specific service and safety requirements and community expectations.

OPTIONS

Current Arrangements

Council currently owns and operates the North Melbourne Recreation Centre and the Melbourne City Baths.

The North Melbourne Recreation Centre opened in December 2009. It has an eight lane 25 metre outdoor lap pool, stadium, gym, café, function rooms, and theatrette. Many of the facilities are available for public hire and the Centre also runs children's birthday parties for primary school-aged children.

The Melbourne City Baths has a 30 metre lap pool, a 15 metre teaching pool, gym, squash courts, and training and fitness studios. It offers wellness sessions and massage services, runs a school holiday program, and has a shoe shop and medical centre. It is housed in a heritage building, having first opened in 1860.

Both Centres also offer swimming lessons (both group and private) and have various merchandise for sale (such as swimwear).

They are currently subsidised by Council — the North Melbourne Recreation Centre requires both an operational subsidy and a Competitive Neutrality subsidy, while the Melbourne City Baths returns an operational surplus but requires a Competitive Neutrality subsidy — these concepts are described below.

An operational subsidy is where the direct expenditure exceeds the revenue, whereas the opposite is the case for an operational surplus. A Competitive Neutrality subsidy is required where all of the costs, including notional (ie hypothetical) adjustments for corporate overheads, a return on assets and a profit margin, exceed the revenue as adjusted for notional disadvantages, such as higher labour costs.

There are areas within each Centre that achieve Competitive Neutrality, namely North Melbourne Recreation Centre's pool café, merchandise and vending, and the Melbourne City Bath's Dry Programs — Wellbeing, Squash, Tennis/Netball Court Hire, Locker Hire, Towel Hire, Merchandise, Vending, and School Holiday Program.

For both Centres, the total Competitive Neutrality subsidy was just under $1.14 million. To offset this subsidy, the North Melbourne Recreation Centre's total revenue would need to increase by 162%, and the Melbourne City Bath's total revenue would need to increase by 52%.

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Council operates these Centres in a way that is designed to achieve its public policy objectives. In particular, Council ensures that the Centres provide an extensive array of health, fitness, sport and recreation opportunities, including programs that cater for special needs and minority groups, whilst mindful of providing 'value for money'.

By contrast, privately owned leisure centres do not have to provide programs and services to a broad cross section of the community or adhere to principles of equity and access. Accordingly, most serve only selected segments of the leisure services market, such as learn to swim programs, aerobics and fitness programs, and gym programs.

Council conducts an annual survey of its members at the Melbourne City Baths. Its most recent survey (conducted in 2010) shows that its members have a strong level of confidence in Council to deliver the services required and that most would recommend the Baths to family and friends. Council has also exceeded its set key performance indicators for the Melbourne City Baths in terms of the overall customer satisfaction rating with the Baths and the community satisfaction rating for Council-owned recreational facilities generally.

So, one option is to maintain the existing pricing, range of services and operational practices at the Centres, with the resulting level of under-recovery of full costs.

Alternatives

The following are possible alternatives to the option described above:

reducing the opening hours. For example, savings of around $7,000 p.a. could be made by closing the North Melbourne Recreation Centre one hour earlier during the week, and savings of around $43,500 p.a. could be made by closing the Melbourne City Baths two hours earlier on Monday to Thursday. However, this would put the Centres at a disadvantage compared to their competitors.

charging the same price for all memberships (at the adult rate). For example, this could save the North Melbourne Recreation Centre around $5,000 p.a. and the Melbourne City Baths around $156,000 p.a. This clearly has implications for access and equity, though.

charging the same price for all casual swims (at the adult rate). For example, this could save the North Melbourne Recreation Centre around $35,500 p.a. and the Melbourne City Baths around $17,000 p.a. This also has implications for access and equity.

for the North Melbourne Recreation Centre: closing the pool at the end of March rather than the end of April, and reducing the lifeguards on duty to Lifesaving Victoria minimum ratio requirements. This would result in savings of $29,626 p.a. and $32,995 p.a. respectively. However, this would have disadvantages in terms of higher insurance premiums and associated administrative costs.

increasing fees. For example, in order to remove the Competitive Neutrality subsidy at the North Melbourne Recreation Centre, the cost of a swim would need to go from $4.60 to $16.47, a casual adult gym pass would go from $16.50 to $51.15 and the cost of annual gym membership would go from $545.50 p.a. to $1,691.05 p.a. At the Melbourne City Baths, the increases would need to be from $5.50 to $14.08 for a swim, from $19.95 to $27.93 for a casual adult gym pass, and from $41.99 p.m. to $58.79 p.m. for the cost of membership. This puts these facilities out of reach for most, if not all, people. Furthermore, even if Council could increase fees, there is likely to be an associated decrease in usage as a result (eg fewer members and casual users).

contracting out the operation of the Centres. While this may result in the reduction of some costs, there would be the additional cost of paying a management fee to the contractor and, overall, Council would still expect the Centres to require a level of deficit funding.

Comment on these options, and other alternatives, is invited from the community.

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Council prefers to retain the existing arrangements as it believes the Centres provide a public benefit to the community that would not otherwise be provided.

NEXT STEPS

Following the information evening on 9 September 2010, Council will consider all submissions made and determine whether Competitive Neutrality Policy should be applied to its operation of the North Melbourne Recreation Centre and the Melbourne City Baths.

Any enquiries concerning this matter should be directed to Council's Manager Recreation Services on 9658 9658.

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Appendix 8

Presentation at Information Meeting

See attached

[5640007: 7188163_5] DM#6177015 page 27

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„mg*

' 11IPPP IMaddocks

,ntIIIIIEROXIMIIIIIIMIT

Public Interest Test for North Melbourne Recreation Centre and Melbourne City Baths Melanie Olynyk I Partner

9 September 2010

Maddocks

NCP and Leisure Centres

• Traditional Local Government Role - provision of facilities for 'public good'

• Recreational aquatic component (eg swimming pool)

• Versus commercial activities (eg gym, learn-to-swim programs)

,Inft1115111111111:1111111111iIii I

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Council's Objectives

• Future Melbourne

— direction of Council to 2020 and beyond

— goal includes improving the physical & mental health & wellbeing of resithnts

,QIII1111111111•111111111:111RII I

Nladdocks

Council's Objectives cont...

• Council Plan 2009 — 2013

— objectives for current term in office

— includes supporting increased participation in physical activiV through sport and recreation services

I 1111111111111111111111111111111E111111111111111111111111111111111111 1

Maddocks

IIIMINIIIMOZIMIIIII1112 I

Maddooks

Purpose

• Discuss current operations and alternatives for North Melbourne Rec Centre and Melbourne City Baths

• NCP Public Interest Test

gM111111111:MILICIIIIIIN I

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National Competition Po licy

• Competitive Neutrality Policy

• Offset competitive advantages / disadvantages of public ownership

• Subject to meeting public policy objectives

Maddocks 2010 The material contained in this presentation is of the nature of general comment only. No reader should rely on it without seeking legal

2718816 advice.

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• Specific Public Policy Objectives

— Planning and policy

— Place

— Promotion

— People

— Provision

14f

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• For NMRC and MCB this means:

— range of programs provided and/or developed in conjunction with communiy groups, agencies, sport & rec asscriations and commercial operators

— health and wetness service and pogram 'packages'

— level of staffing that can respond to site-specific service and safety requirements and community expectations

AkIPIMMUMEZMMIEVII

Maddocks


• North Melbourne Rec Centre

— owned and operated by Counci

— opened in December 2009

— 8 lane, 25m outdoor pool

— stadium

— gym

— café

Maddoas


• North Melbourne Rec Centre cont...

—function rooms

—theatrette

— swimming lessons

— merchandise

— children's birthday parties

1 1111111111d11111011111111111m

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111.111111011111111111111111111

]AMMIBMAMMNIMM

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Council's Objectives cont.. -

• Active Melbou rne Strategy

— specific strategic direction for leiaire and recreation

— 10 years to 2016

— supports the development and operation of community recreation facilities where opportunities present

:M11113111/11:1111111nli I

Niaddocks


• For NMRC and MCB this means:

— providing range of services and programs that respond to catchments needs, including special needs and minority groups

— pricing structure that encourages participation, recognises spedal needs groups, and represents 'value forrnoney'

Maddocks 2010 The material contained in this presentation is of thc nature of general comment only. No reader should rely on it without seeking legal

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..quirutreratitillniTif.N I

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• Melbourne City Baths

— heritage building (1860)

— owned and operated by Council

— 3Orn lap pool and 15m teaching pcol

— gym

— squash courts

— training and fitness studio

:gtglUltEMIMEItilt12

Maddocks

Current Arrangements cont...

• Both subsidised by Council

• NMRC — operational & CN subsidy

• MCB — operational surplus but CN subsidy

Maddocks

Discussion

• Any other alternatives?

• Council prefers current arrangements

I

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Where to from here?

• Written submissions by 24 September 2010

• Council decision by end of year

I 11111111111iI1111111111111111111 111111111111111111111P1111!

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.:g11:11111V19211011111:1M I

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Current Arrangements cont..

• Melbourne City Baths cont.,.

— wellness sessions and massage services

— swimming lessons

— merchandise

— school holiday program

— medical centre

Maddocks

Alternatives

• Reduce operating hours

• Charge same price for all memberships/casual swims (adult)

• NMRC: close pool a month earlier aric reduce lifeguards on duty

• Increase fees

• Contract-out centres to private providers


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1 111111111111Ni -111111111111111111 11111111111111111111N1111111111 II 1

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111 1

N'Iathlocks

Public Interest Test for North Melbourne Recreation Centre and Melbourne City Baths

Melanie 01 ynyk I Partner Direct 61 3 9288 0691 melanie.olyn [email protected]


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i

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Appendix 9

Public Policy Objectives

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Public Policy Objectives (PPO)

tO Planning & Policy

"Recognition of the importance of providing

physical activity opportunities for the

community ... will become a major factor in

all planning across Council."

An Explanation of the Public Policy Objective

• Service, program and facility planning and development that is based on real and verified needs relating to leisure, health and well-being, and fitness.

• Services and programs that respond to: - the needs of residents - 'capital city needs', that is, the specific recreation and

health and wellbeing needs of city workers, students, visitors etc.

• Community consultation processes that are robust and innovative.

• Services and programs that are flexible, and that respond to outcomes of planning and policy reviews.

• Facility development that is well-planned, and based on sustainable community and business development principles, and which is in accordance with Council's triple bottom line philosophy.

• Operational Business Plans that are linked to strategic service plans and reviews, and that are in accordance with state government legislation.

• Services and programs that are inclusive and engage all sectors of the community.

What This Means At The NMRC & The MCB

• Community aquatic and associated leisure service planning and review workshops.

• Aquatic facility planning workshops and project corn rn ittees

• Annual Council surveying of resident/ user satisfaction of services.

• Responsive and user-friendly customer comment and feedback processes.

• Customer needs and evaluation meetings. • Programs and services that respond to need • Best Value review of the MCB service and performance. • Business Plan preparation and review.

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2.0 Place

"The physical environment ... is a

crucial factor in enabling activity."

3.0 Promotion 'More leisure choices

through improved management and dissemination of information about opportunities and


D

D

D

Develop specific actions relating to providing the infrastructure to deliver community needs across the municipality. Manage existing assets in a sustainable manner to cater to existing and future demand. Ensure opportunities for community access to major community infrastructure redevelopments within the municipality.

D

D

D

Resources dedicated to the promotion of recreation and leisure opportunities available to residents, visitors and workers. Promotion of the benefits of recreation and an active lifestyle to residents, visitors and workers. Promotion of services and facilities in a manner, and

[5640007: 7188163_3][5640007: 7188163_3] page 10

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benefits.'

4.0 People

' In conjunction with key stakeholders provide a co-ordinated, efficient

and effective delivery of recreation and leisure

opportunities.'

5.0 Provision

'Provide more accessible and inclusive recreation

and leisure facilities, programs and services that are responsive to


through channels, that are relevant to different community sectors and groups.

D Effective promotion that: - promotes 'benefits' of active lifestyle - encourages 'active participation' in sport and

recreation opportunities - helps achieve optimal use and performance of

facilities D Effective management of a range of promotional channels

to inform residents, visitors and workers of leisure opportunities.

D Opportunities that recognise and respond to needs and issues associated with: - financial disadvantage - gender - social dislocation and isolation - culture - disability - age - lifestyle (work, family, education etc.)

D The identification and fostering of mutually beneficial community and commercial partnerships to:

- maximise leisure and recreation opportunities - promote aquatic and recreation opportunities and

benefits - encourage participation in healthy lifestyle activities

D Management of facilities that is based on industry best practise.

D Ongoing monitoring of the effectiveness of service provision against changes in recreation and leisure need.

D Recreation infrastructure that meets community needs, and that delivers a range of physical, social, and


- maximise the health, social and economic benefits to the community

D Preparation and promotion of a range of information on healthy lifestyle options within the City.

D A range of programs/activities that are provided, and/or developed, in conjunction with community groups, agencies, sporting/recreation associations, and commercial operators.

D Consultation with other public and private service providers in relation to joint or complementary program and service development.

D Advice and support to community organisations that are considering establishing new community based leisure programs.

D Partnerships with State Government, sporting bodies and associations, user groups and similar organisations.

D Health and wellness service and program 'packages' that are provided in collaboration with a range of provider partners.

D A diverse mix of 'activity' spaces that respond to a broad range of community needs and interests, including:

- 30mtr lap pool and 15 mtr teaching pools - 3 spas, and 3 saunas - Gymnasium - 7 activities/program rooms

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local needs.'


environmental benefits. D. The provision of a range of quality and sustainable

facilities, services and programs. D A variety of leisure environments for a range of user

groups. D Physical and aesthetic amenity that :

- encourages participation by isolated groups in the community

- provides an alternative social 'hub' for the community D Incorporation of best practice environmental, financial and

social sustainability into the design and operation of sporting facilities.

D Service subsidies that are: - quantifiable - linked to public policy objectives - deliver benefits to the community - reviewed in line with changing community

expectations D High level and responsive customer service, information.


- Consultation and treatment suites - Cafe

D Level of staffing that can respond to site-specific security and safety requirements and expectations of the community.

D Staff who are trained, qualified and experienced in accordance with industry guidelines and standards.

D. Annual maintenance programs, building and equipment audits and compliance with operating standards.

D A high standard of amenity and service delivery. D Responsible and transparent financial management

systems. D Special needs groups bathing times. D Risk management procedures and evaluation procedures. D Activity spaces that are managed and staffed in

accordance with relevant legislation and industry guidelines.

D Review facility performance against relevant industry benchmarks, and where relevant, development of strategies to address inefficiencies.

D Management of the MCB in consideration of heritage and preservation requirements of the facility.

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Appendix 10

Equilibrium's Submission

See attached

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From: Paul ,Kinghorn [mailto:paul©eqhf.com.au ] Sent: Friday, 24 September 2010 10:31 To: Mark Jones; Graham Porteous Subject: FW: North Melbourne Facility

Dear Mark and Graham

Could you please forward this email or send me the details of the appropriate person in relation to

the council meeting on the 9 th September and competitive neutrality. I would like to put forward the recommendation that the pricing structure of the North Melbourne Facility is bought into Rile with other current facilities.

I have a snap shop a local pricing structure below and I am not aware of any pricing within the industry that has similar terms, facilities available or pricing compared to that of the North Melbourne Facility.

The average fortnightly price on the clubs below is $ 35.69 per fortnight. (not all have the wide range of facilities as North Melbourne such as Jets and Equilibrium).

I therefore request that the North Melbourne facility raise their price to be in line with the other council facilities that average out as $38.07 per fortnight.

I request that this takes place immediately.

I am more than happy to discuss this further if required and would appreciate a response to this email with an outline of the process moving forward.

Points to note comr Facilities available —e.g pool ,.aerobics, tennis courts

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Level of service e.g staff assistance or not (Jets is a low service club you pay more for service) Terms of contract month or a locked in contract.

Meib city baths 0 Gym, GF, pool and use of Nth Melbourne pool and Kensington and Carlton — program,

reprogram, floor service JF $133

0 $42.99 fortnight NO CONTRACT (includes 12 x lhr PT session) O $1039 ilrn UF

, Ascot vale leisure centre O Gym, GF, Pool, PT - program, reprogram, floor service O IF $85 e $38 fortnight NO CONTRACT ($31 concession) O Promo - $150 voucher to use on anything

Jets — docklands O Gym 24/7 access — No Service — Initial program • NO CONTRACT O Initiation Fee $99 O Card Fee $29 O $21.95 fortnight + $1.50 admin fee

YMCA docklands O Gym, GF - program, reprogram, floor service e $99 IF O $42 fortnight e NO CONTRACT

Equilibrium Health and Fitness O GF classes —Zumba, Yoga, Gym - program, reprogram, floor service O $39.90 per fortnight e $99 JF O NO CONTRACT — exit 1 month

Kensington leisure centre e Gym, GF, Pool - program, reprogram, floor service O $29.30 fortnight 0 $31 JF 0 NO CONTRACT

Healthy Regards

Paul Kingborn Director East Doncaster - Norch Melbourne

24/09/2010

of 117

136 — 140 Andersons Creek Road, East Doncaster 3109 M 0417 113 501 F 03 9842 9966 I E : paulE5Deqhf.com.au I www.eohf.com.au

This email is intended solely for the named addressee. If you are not the addressee indicated please delete it immediately.

24/09/2010

of 117

Appendix 11

Interplan 09/10 KPI Report

See attached

[5640007: 7188163_51[5640007: 7188163_5] DM#6177015

of 117

of 117

City of Melbourne

1

Ark • CITY OF MELBOLIME

2 YEA - S BRANCHKPI

City of Melbourne

2 YEARS BRANCH KPI:

Recreation Services

KPI: 1CP,1 Community satisfaction rating for CounciPowned recreational facilities

RESPONSIBLE OFFICER: 80

Graham PORTEOUS 70

Manager Recreation Services 60

LATEST COMMENTS:50

Improved

40 *30

20

10

-7 z

pzinnual Royal Life Saving Safety Audit rating at the City

TARGET L.] ACTUAL

RESPONSIBLE OFFICER: loo

Angela HANN

Health & Fitness Manager 80

LATEST COMMENTS:

MCB has again achieved a 60

high audit rating for observed and documented c*' safety and compliance. 40

Rating is affected by heritage classification.

20

CI TARGET u ACTUAL

Jciy2,2OiO i) Page 2 of 5

of 117

2 YEARS BRANCH KPIs

RESPONSIBLE OFFICER:

Angela HANN

Health & Fitness Manager

100

80


Graham PORTEOUS

Manager Recreation Services

LATEST COMMENTS:60

TARGET ACTUAL

40

20

CITY OF MELOOLINIE

LATEST COMMENTS:

A consistently high standard of Quality Assurance Assessment results was achieved. The average result for 2009-10 was 97.47%.

60

TARGET ACTUAL

40

20

0a) a) a) a) a) a) o o o o o o 9 9 o o .2

r-- .<-- ,- <- ,- .

= ID) a. -6 > 7.s, . _. ,., , >. CO Cl.

0 o ca 0 CO

< u) 0 z 0 -) u. 2 < 2

KPb

of 117

2 YEARS BRANCH KPIs City of Melbourne

City of Melbourne

RESPONSIBLE OFFICER:

Angela HANN

Health & Fitness Manager

LATEST COMMENTS:

Annual survey was conducted in May/June 2010 with 87.6% of members surveyed indicating confidence in MCB to deliver the services they require.

7

6

TARGET ACTUAL

3

2

0

OTY OF MELBOURNE


Arthur CROFTS5

Recreation Contracts Officer

LATEST COMMENTS: 4

Survey to be conducted in May 2010. 3 TARGE-T

-a ACTUAL-

2

1

00

of 117

elbourre 2 YEARS BRANCH KPIs

City of Melbourne


Arthur CROFTS

Recreation Contracts 80

Officer

LATEST COMMENTS:

Rating Available at end of 60

June 2010.

40

TARGET ACTUAL

of 117

of 117

Appendix 12

MCB Annual Member Survey 2010

See attached

[5640007: 7188163_5][5640007: 7188163_5] DM46177015

of 117

1. Gender:

Response Response Percent Count

79

98

170

0

Male 42.4%

57.6%

answered question

skipped question

Female

2. Age bracket (please pick one


0.0%

12.4% 21

34.7% 59

22.9% 39

15.9% 27

10.6% 18

12-16 years old

17-25 years old 7-1

26-35 years old

36-45 years old I

46-55 years old I

56-65 years old 11—

66-75 years old

76-85 years old

3.5%

0.0%

answered question

skipped question

170

0

MCB annual member survey 2010

of 117

3. What is your current membership type:

Response Response

Percent Count

Club I 83.5% 142

Aquatic I I 11.8% 20

LivIng Stronger ri 4.7% 8

Youth 0.0% 0

answered question 170

skipped question 0

4. What is your work postcode?

Response

Count

159


skipped question 11

5. How far is MCB from your work place?

Response

Percent

Response

Count

0-1km 1 40.0% 68

Between 1-2km 30.6% 52 1

Between 2-3km 8.2% 14

Between 3-4km 0 2.9% 5



Between 6-7km 0.00/0 0

> 7km 12.9% 22

answered question '170

skipped question 0

2 of 29

of 117

6. What is ycur home pcstcode?

answered question

skipped question

Response Count

169

169

1

7. How far is MCB from your home?

0-1km

Between 1-2km

Between 2-3km

Between 3-4km

Between 4-5km

Between 5-6km

Between 6-7km

> 7km

Response Response

Percent Count

26.5% 45

15.9% 97

11.2% 19

4.7% 8

6.5% 11

3.5%

4.7%

27.1% 46

answered question

skipped question

170

3 of 29

of 117

• 8. traveh to MCS

Train

Tram

Car

Walking

Cycling

Motorbike

Other

Response Response

Percent Count

0.0%

21.4%

15.5%

51.2%

10.1%

0.6%

1.2%


skipped question 2

36

26

17

4 of 29

of 117

9. How long have you seen a member at MCB?

Response

Percent

Response

Count

5.3%

27.2% 46

15.4% 26

8.9% 15

8.3% 14

10.1% 17

7.1% 12

1.2%

3.0%

2.4%

n r,of

< 1 month [7]

1-6 months

12 months

18 months

2 years

3 years

4 years

5 years

6 years

7 years

8 years

9 years

10 years

10-15 years

16-20 years

Over 21 years

0.6°A

0.0%

3.0%

4.7%

2.4%

answered question

skipped question

169

1

5 of 29

of 117

42

15

37

31

8

170

24.7%

12.4%

8.8%

5.3%

4.1%

21.8%

18.2%

4.7%

answered question

skipped question

6:00am - 8:30am

8:30am - 12:00 noon [

12:00 noon - 2:00pm

2:00pm- 4:00pm

4:00pm-5:00pm

5:00pm - 6:30pm

6:30pm - 8:00pm

After 8pm n

14

34

58

32

20

8.2%

20.0%

34.1%

18.8%

11.8%

5.3%

1.8%

answered question

skipped question

170

0

10. Which times do you most often visit the centre?

Response Response

Percent Count

11. On average, how many times per week do you visit the centre?

Response Response

Percent Count

6 of 29

of 117

0.6% 1

57.1% 97

7.6% 13

0.0% 0

0.6% 1

15.3% 26


skipped question 0

12. Fla\nr (lid you hear about PICB? (Multiple Selections Accepted

Referral from current member 1

Yellow pages g

MCB website

Google

Newspaper g

Walking by 1

At work r

Facebook

Letter box drop

Other (please specify)

2esponse

Percent

Response

Count

8.2% 14

0.6% 1

10.6% 18

0.0% 0

13. Would you recommend MCB to your friends/family/work colleagues?

Strongly recommend I

Recommend I

Undecided 171

Would not recommend

Response

Percent

Response

Count

53.3% 90

37.3% 63

7.1% 12

2.4% 4


skipped question 1

7 of 29

of 117

4. Why veailid you recommend RICS over other fitness providers?

answered question 0

skipped question 170

15. Which services do you frequently participate in?

Response Response

Percent Count

52

14.8% 25

3.6% 6


skipped question 1

Gymnasium

Group Fitness classes

Aquatic Education

Living Stronger

70.4%

39.6%

0.0%

1.8%

0.0%

1.2%

30.8%

119

67

Personal Training

8 of 29

of 117

Response Response

Percent Count

30.6% 52

57.1% 97

10.6% 18

1.2%

0.6%


skipped question

Complete n

A lot

Some

Little [

None g

16. Select an appropriate response cor the statements below

"itrongly Not Rating Response

)isagree Applicable Average Count

The gymnasium is clean

The change rooms are clean

The swimming pool is clean

The spa/sauna is clean

The facility is well maintained

When I report a maintenance issue

it is actioned

Information on programs and

services is easily accessible

I actively recommend MCB to

friends,family and co-workers

47.6% 42.9%0.0% (0) 0.0% (0) 9.4% (16) 3.53 170

(81) (73)

31.2% 57.1%7.6% (13) 2.9% (5) 1.2% (2) 3.18 170

(53) (97)

20.6% 51.2% (35) (87)

5.9% (10) 1.2% (2) 21.2% (36) 3.16 170

14.1% 37.1%5.9% (10) 0.6% (1) 42.4% (72) 3.12 170

(24) (63)

34.1% 59.4%5.3% (9) 0.0% (0) 1.2% (2) 3.29 170

(58) (101)

11.2% 24.7%5.9% (10) 1.8% (3) 56.5% (96) 3.04 170

(19) (42)

34.1% 60.0%3.5% (6) 1.2% (2) 1.2% (2) 3.29 170

(58) (102)

31.2% 53.5%4.7% (8) 1.2% (2) 9.4% (16) 3.27 170

(53 ) (91)


skipped question 0

17. What level of confidence do you have in us to deliver the services

you require?

9 of 29

of 117

14. Do you use the Gymnasium?

Yes 0.0% 0

No 0.0% 0

answered question 0


Response

Percent

18. Do you have arty additional comments?

answered question

skipped question

Response

Count

77

77

93

20. Personal trainers are

All the time

Almost always

Most of the time

Occasionally

Never

friendly and approachable

Response Response

Percent Count

33.5% 56

28.7% 48

13.2% 22

2.4% 4

0.0% 0


skipped question 3

i

1

0

10 of 29

of 117

21.0%

40.7%

6.0%

2.4%

29.9%

answered question

skipped question

Response Response

Percent Count

35

LI

68

10

4

50

3

answered question

skipped question 3

167

21 . When receive a program from a personal i:rainer it is appropriate for my needs

Strongly agree

Agree

Need more variety

Disagree

Not applicable

22. The gymnasium equipment is kept clean

Response

Percent

All the time 14 44.9%

34.1% Almost always

6.6% Most of the time j

Never 0.0%

Response Count

75

57

11

0

11 of 29

of 117

23. Equipment and training tools available for use meet my needs

Response

Percent

Response

Count

35 9% 60

47.9% 80

2.4% 4

0.0% 0


skipped question 3

Strongly agree

Agree

Need more variety 0

Disagree

No waiting time

Acceptable

Disrupts my training

Unacceptable

24. Waiting time for equipment is:

Response

Percent

34.7%

49.7%

1.2%

0.0%

answered question

12 of 29

of 117

0.0%

0.0%

answered question


Yes

No

25. On average, what is your preferred workout length when exercising

in the gymnasium?

Less than 30min

30mins

45mins

60mins

Greater than GOmins

Response

Percent

Response

Count

0 6% 1

6.6% 11

28.1% 47

40.1% 67

10.8% 18


skipped question 3

26. Do you participate in Group Fitness?

Response Response

Percent Count

13 of 29

of 117

27. The centre offers members the opporunity to participate in diverse cMies.tiifha: activities ,tuouliel you like tc-J, participate ill?

Response Response

Percent Count

46.3% 57

21.1% 26

23.6% 29

27.6% 34

Meditation

Swimming club

Cycling club

Fun runs

Mini triathlons

Around the Bay in a Day

Squash competitions

Social tennis

and up paddle boarding

Winery tours

Horse riding carnivals

Paintball

Lawn Bowls

21 17.1%

16.3%

7.3%

17.9%

10.6%

21.1%

13.0%

15.4%

12.2%

answered question

skipped question

20

9

22

13

16

19

15

123

47

14 of 29

of 117

28. The centre offers members the opportunity to participate in diverse activities. What actMties vv • uld you Hke to p.rticipate in?

Meditation

Swimming club E Cycling club El

Fun runs I—I

Mini triathlons ri Around the Bay in a Day

Squash competitions

Social tennis

Stand up paddle boarding

Winery tours

Horse riding carnivals

Paintball

Lawn Bowls

Other

Response Response

Percent Count

18.6% 31

3.6% 6

4.8% 8

9.0% 15

5.4% 9

4.8% 8

2.4% 4

5.4% 9

1.8% 3

6.6% 11

3.6% 6

4.8% 8

3.0% 5

26.3% 44


skipped question 3

15 of 29

of 117

25

Disagree

28

2

44

167

3

Not applicable

Strongly agree

Agree

Needs more variety

15.0%

40.7%

16.8%

1.2%

26.3%

answered question

skipped question

29. Group fitness instructors are friendly and approachable

Response

Percent

Response

Count

All the time 36.5% 61

Almost always 24.6% 41 J

Most of the time I I 4.8% 8

Some of the time 0 1.8% 3

Never g 0.6%

Not applicable 31.7% 53


skipped question 3

30. The group fitness timetable offers a wide variety of class types

Response Response

Percent Count

16 of 29

of 117

Response

Percent

Response

Count

13.2% 22

9.0% 15

7.8% 13

6.0% 10

64.1% 107


skipped question 3

6.15am

6.30am

7:00am

7:30am

Not applicable

20

6

12

11

118

167

3

12.0%

3.6%

10:00am

11:00am

12:00pm 7.2%

6.6% 1:00pm

Not applicable

answered question

skipped question

31. When G attend mornlng group fitness classes, prefer to attend at

32. When attend daytime group fitness classes, I prefer to attend at

Response Response

Percent Count

17 of 29

of 117

33. When 1 at. end even0ng group fitness classes, prefer to atsrid a

Response Response

Percent Count

15.0% 25

18.0% 30

10.8% 18

9.6% 16

46.7% 78


skipped question 3

5:30pm

6:00pm

6:30pm

After 7:00pm

Not applicable

34. On average, what is your preferred group fitness class length?

30mins

45mins

60mins

90mins

Not applicable

Response Response

Percent Count

1 %

32.3% 54

31.1% 52

1.2% 2

18 of 29

of 117

35. Select an. appropriate response to the statements below:

No;. Rating Response

Applicable Average Count

30.5% 24.0%3.6% (6) 0.0% (0) 41.9% (70) 1.54 167

(51) (40)

25.7% 19.2%4.2% (7) 0.0% (0) 50.9% (85) 1.56 167

(43) (32)

10.3% 10.9%5.5% (9) 0.6% (1)

72.70!1.87 165

(17) (18) (120)

23.6% 17.6%1.8% (3) 0.0% (0) 57.0% (94) 1.49 165

(39) (29)

The group fitness studio is kept

clean

The cycling studio and bikes are

kept clean

The boxing studio and equipment

are kept clean

The personal training studio is kept

clean


3 skipped question

36. Do you have any additional comments related to the gymnasium or

group fitness program?

answered question

skipped question

Response

Count

49

49

121

37. Customer service staff greet me on arrival by using my name

Response Response

Percent Count

Always 1-1 8 1%

Sometimes 44.1% 71

Most of the time 7-1 9.9% 1E

Never 34.8% 5E

Not applicable El 3.1% E


skipped question

19 of 29

of 117

38. CustoE er service staff presentation is

Response Response

Percent Count

70.2% 113

29.2% 47

0 6% 1

0.0% 0


skipped question 9

Professional and well presented

Acceptable

Unprofessional and untidy

Not applicable


skipped question 9

20 of 29

of 117

40. The process for suspending my mernbershlp is

Response Response

Percent Count

Easy I 23.0% 37

Straight forward I 34.8% 56

Not user friendly J 6.8% 11

Difficult 0 1 9% 3

Not applicable I . I 33.5% 54


skipped question 9

41. would like to be kept up to-date on member events, new programs, competitions, offers and centre news by:

Response

Percent

Response

Count

Mail 2.5% 4

Email 76.4% 123

Facebook 0 1.9% 3

Twitter g 0.6% 1

In person 0.0% 0

Quarterly newsletter 0.0% 0

Telephone 0.0% 0

SMS Iii 1.2% 2

Signage around the centre 11.2% 18

All of the above 0 1.9% 3

None of above 0 4.3% 7

answered question

skipped question

161

9

21 of 29

of 117

I wouCo] EHF LO) receive regular communication on:

Response Response

Percent Count

49.7% 80

51.6% 83

28.0% 45

23.6% 38

16.1% 26

34.2% 55

15

Other (please specify) 5


skipped question 9

New activities and events

Member and guest benefits and

offers

Latest training tips from a personal

trainer

Wellness (mind, body and spirt)

advice/tips from a professional

provider

Recreation and training activities

such as fun runs I can take part in

All of the above

None of the above

22 of 29

of 117

Strongly Strongly Not. Rating Response Agree Disagree

agree disagree ap pit cab! e Average Count

:oraer service staff are EmcArdedao about

13.9% 33.5%7.6% (12) 0.0% (0) 44.9% (71) 1.89 158

(22) (53)

Membership options available to 30.0% 40.6%3.1% (5) 1.3% (2) 25 0% (40)

you (48) (65)


skipped question

The difference between all the

gymnasium consultations available

to you

59 32.3%

59.6%

4.3%

0.0%

96

3.7%

Our Group Fitness program and can

explain the differences in class

types

15.5% 41.0%2.5% (4) 0.0% (0) 41.0% (66)

(25) (66)1.78 161

The facilities and cost associated

with hiring the Flagstaff Gardens

Tennis/Netball courts

The Aquatic Education program and

can explain the differences

between class levels

6.3% 4.4% (7) 1.9% (3) 0.0% (0)

87.3%

1.80 158 (10) (138)

7.0% 17.7% 73•4% 1.9% (3) 0.0% (0) 1.81 158

(11) (28) (116)

44. You are served promptly by cus :tomer service staff

Response Response

Percent Count


skipped question 9

23 of 29

of 117

46. Customer service staff phone manner is

Response Response

Percent Count

Exceptional .

Responsive n7:--M"7---77-1

Acceptable I

Abrupt g 0.6%

0.6%

answered question

skipped question

Uncaring g

161

9

24 14.9%

17.4% 28

45. When caliing MICB, the phone is answered

Response

Percent

Response

Count

Promptly 34.8% 56

Within a reasonable amount of40.4% 65

time

Slowly 0.0% 0

Left on hold 0 0.6% 1

Unanswered I] 0.6% 1

Not applicable I 23.6% 38

skipped question 9

47. What do we do well? (please be specific, 50 word limit)

Response

Count

161


skipped question 9

24 of 29

of 117

62

108

43

49

14

1

47

154

16

27.9%

9.1%

0.6%

30.5%

answered question

skipped question

All the time I

Most of the time

Some of the time

Never

Not applicable

48. What shouN we improve on? (Please be specc,50 word limit)

Response

Count

161


skipped question 9

49. Do y u have any additional comments related te, customer service?

Response

Count

50. The swimming pool water is clear and clean

Response Response

Percent Count

25 of 29

of 117

86

154

16

Not applicable 55.8%

answered question

skipped question

Too hot

Just right

Too cold 7 Not applicable

1.3% 2

30.5%

5.2%

63.0%

answered question

skipped question

154

47

97

16

8

Too hot

Just right

Too cold

Not applicable

2.6%

53.9%

10.4%

33.1%

answered question

skipped question

154

83

51

16

16

4

51. The spa water temperature is

Response Response

Percent Count

Too hot 1.9% 3

Just right —1 34.4% 53

Too cold f-1 7.8% 12

52. The sauna temperature is

Response Response

Percent Count

53. The swimming poor water temperature is


26 of 29

of 117

. lifeguard staff.are'

answered question 1

skipped question 16


53.9% 83

8.4% 13

0.6% 1

37 0% 57

Alert and vigilant

Disinterested

Not visible [I

Not applicable

55. My swim experience is enjoyable because lifnuards:

of 117

56. lklernber.3 can access North Melbourne Pool, Carlton Baths

Corh-miunity Centre and Kensington Recreation Centre 'For swlmmin his is:

Response Response

Percent Count

22.1% 34

21.4% 33

6`)/0 21

Clear through signage diplayed at

the centre

a great benefit, it adds value to my

membership

of no benefit, I dont value this as

part of my membership

I would like to see a reciprocal

membership set up to include access to the pool, gym and group

fitness classes at all four facilities

22.1% 34

I never knew about this

arrangement21.4% 33

Not applicable 36

154

16

23.4%

answered question

skipped question

LI

II

154

Strongly agree

Agree

Disagree

Strongly disagree

Not applicable

16 9% 26

43.5%

4.5%

0.6%

34.4% 53

answered question

skipped question 16

67

57. The lap lane availability through signage around the pool is informative and up to-date.

Response Response

Percent Count

28 of 29

of 117

skipped question

99.3% 138

100.0% 139

91.4%

answered question

skipped question 31

127

139

58. Do you h-ve any additi• nal comments related to aquatic services?

Response

Count

60

60

110

59. Thank you for your feedback, by entering the followhig information you will be in the running for a 12 week complimentary club membership or a 5 x 30 minute personal training pack.

Response Response

Percent Count

Name:

Email address:

Phone nurnber:

29 of 29

of 117

FUTURE MELBOURNE (FINANCE AND Agenda Item 5.6 …€¦ · priority to the North Melbourne...

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