PALMERSTON NORTH CITY COUNCIL
Memorandum
TO: Committee
of Council
MEETING DATE: 10
June 2019
TITLE: Free
Swimming at Council pools for children under 5 years old
DATE: 28
May 2019
Presented By: Kathy
Dever-Tod, Parks and Reserves Manager, Infrastructure
APPROVED BY: Tom
Williams, Chief Infrastructure Officer
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RECOMMENDATION(S)
TO Council
1. That the
report dated 28 May 2019 and titled “Free Swimming at Council pools for
children under five years old” be received
2. That the
Council introduces pool supervision ratios to be applied at all Council pools
in conjunction with the existing CLM pool along policy from the 1st
July 2019
3. That the
Council introduces free swimming, for supervised children under the age of
five years, by introducing a new pool entry fee to enable one pre-schooler
and their supervising adult to enter all Council pools for the same price as
a single child
4. That Council
notes that the estimated cost for introducing free swimming, for supervised
pre-schoolers is $33,427 per annum
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1. ISSUE
1.1 In
March 2019, the Finance and Performance Committee of Council received a report
on the cost of providing free admission to the Lido and Freyberg Pools for all
children under five years old. The report noted that the cost was estimated
using limited attendance data, and that more analysis was needed to obtain a
better picture of the potential cost of a free swimming policy.
1.2 Officers
recommended that a full paper with recommendations be brought back to the
Finance and Performance Committee in August 2019. The Committee subsequently
resolved that the report be brought back to the Committee in June 2019.
1.3 At
its meeting of 18th March 2019, the Council resolved to consult with
the community on the principle of implementing free swimming at Council owned swimming
pools for under five-year olds.
1.4 After
receiving the summary of submissions, Committee of Council resolved at its
meeting on the 20th May to include an amount of $33,500 in the
2019/2020 draft budget to fund free swimming for under five-year olds.
1.5 The
Committee requested that the pending officer report be brought forward one week
to the Committee of Council meeting on the 10th June, to inform the
discussions on the 2019/2020 annual budget.
2. BACKGROUND
2.1 The
report to Finance and Performance Committee of Council in March 2019 estimated
the cost of providing free swimming as $28,971 per annum.
2.2 The
cost estimate was based on the loss of revenue using attendance data for the
months of January and February 2019. The report highlighted that there
was a large drop off in the number of children (16 years and under) entering
the pools in February, which coincided with the end of the school
holidays. By contrast, the number of children 5 years and under at the
pools increased in February. It was not possible to assess whether the
attendance of children five and under would increase, decrease or stay the same
in subsequent months.
2.3 It
was unclear from the report whether removing the cost for pre-schoolers would
alter attendance numbers.
2. ATTENDANCE
SURVEY
2.1 CLM
have recorded the number of children five years and under entering the pools
since January 2019. There is now four months of data available as
presented in Figure 1:
|
Pool
|
January
|
February
|
March
|
April
|
Total
|
|
Lido
|
446
|
454
|
691
|
191
|
1,782
|
|
Freyberg
|
155
|
207
|
212
|
139
|
713
|
|
Total
|
601
|
661
|
903
|
330
|
2,495
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Figure 1: Pool attendance for children aged five years old and under
during January- April 2019
2.2 The
data shows a large increase in attendance numbers at the Lido during
March. This corresponds with warm weather during this month, with
families making use of both the outdoor and the indoor areas.
2.3 Attendance
in April was at a much lower level than either February or March, particularly
at the Lido. This supports the assumption that attendance of
pre-schoolers reduces during school holidays.
2.4 The
total number of visits by children five years and younger was 2,495.
2.5 During
April 2019, CLM collected data on the age of young children visiting the
pool. This information is presented in Figure 2. The data for each
age group, as a percentage of the total number of children aged five and under,
is presented in Figure 3.
|
Age (yrs)
|
Freyberg
|
Lido
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Total
|
|
1 and under
|
27
|
34
|
61
|
|
2
|
36
|
37
|
73
|
|
3
|
37
|
46
|
83
|
|
4
|
26
|
38
|
64
|
|
5
|
13
|
36
|
49
|
|
TOTAL
|
139
|
191
|
330
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Figure 2: Pool attendance in April 2019, for children five and under, by
age.
Figure 3: Percentage of children in each age group, attending pools in
April 2019
2.6 The
information in figure 3 shows that 15% of the survey group were five years old,
and therefore 85% of the survey group were aged under five.
3. Estimated
LOss of revenue
3.1 The
cost to Council of providing free swimming for children arises from a loss of
revenue.
3.2 In
March 2019 the cost of providing free swimming for children five years and
under was assessed as $28,971 per annum, based on an estimated annual admission
of 7,572, and a child admission price of $4.40 (including GST), which is the
price that comes into effect on 1st July 2019.
3.3 Extrapolation
of the survey data for the four-month period, leads to an annual estimated
annual pool entry of 7,485. This figure is 99% of the figure estimated in
the March report. This gives some level of confidence that the earlier estimate
was not unreasonable. Based on this updated figure, the annual cost to Council
of providing free swimming for children five years and under is estimated to be
$28,638.
3.4 During
the annual budget consultation process, Council asked for community feedback on
the following question: What do you think about the idea of providing
under five-year olds with free entry to Council pools?
3.5 The
survey data for April shows that 85% of the survey group were under the age of
five. If the free attendance is only applied to this group, then the cost
to Council reduces to $24,342 as follows
$28,638*85%=
$24,342
2.4 The
above estimate is based on the loss of entry revenue at the Lido and Freyberg
pools. Council intends to open the Ashhurst Community Pool in June to the
public five days a week. The pool has a small lane pool and a learn to
swim pool. The pool is likely to attract children from the surrounding rural
area as well as the Ashhurst village.
2.5 The
impact of the Ashhurst pool on other Council pools, especially the Freyberg
Pool, is unknown. For the purposes of this report, it is assumed that the main
impact will be on organised activities, such as swimming lessons and exercise
classes, rather than casual pre-school entries.
2.6 CLM
have provided officers with their budget estimates for the Ashhurst Pool. The
budgeted revenue for casual admissions has been used to estimate the cost of
providing free entry for pre-schoolers at the Ashhurst Pool as follows:
(Budgeted annual revenue for casual entries)*(child
entries as a proportion of casual entries at Freyberg -three year
average)*(pre-school entries as proportion of child entries at Freyberg - based
on survey data)
2.7 Using
this formula, the cost of free swimming for under five-year olds at the
Ashhurst Community Pool in 2019/2020 is estimated to be $2,400. The
reliability of this figure is not as certain as the estimates for the Lido and
Freyberg Pools which were based on survey data. If the $2,400 is added to
the cost estimate from section 2.3 of the report, then the estimated cost to
Council for a policy of free entry for under five-year olds, at all Council
pools is:
$24,342+$2,400 = $26,742
4. IMPACT
of the policy on entry numbers
4.1 If
cost is the main barrier to pool entry for pre-schoolers, then free entry may
increase the annual number of pre-school visits. If this was the case, then the
annual costs of the policy to Council would be understated.
4.2 CLM
advise that when Auckland Council adopted its policy of free pool entry in 2013
for children 16 and under, in 2013, there was an initial increase in user
numbers for the first six to nine months and particularly throughout the summer
period. CLM had to increase the number of lifeguards rostered on at peak
times as many of the new customers were generally non-swimmers, and rescue
numbers increased. The implementation of free swimming did not change the
amount of people participating in swimming activities and after the initial
increase, attendance tapered back to normal levels.
4.3 Based
on the information from Auckland, the policy of free swimming for pre-schoolers
is unlikely to have a material impact on visitation numbers.
5. Pre-school
supervision:
5.1 Ninety-one
submissions were received during the draft budget consultation period.
Seventy-six submitters supported the idea of free swimming for under five-year
olds, three were against it, and twelve were neither for or against.
Several submitters raised the proposal of free entry for the supervising adult.
5.2 CLM
upholds pool safety via the Community Leisure Management Pool Alone Policy. Current
pool policy requires adults to actively supervise their children as follows:
All children under 8 years must be actively
supervised by a caregiver who is 16 years old or older at all times. Children
will be prevented from admission to the facility if this is not adhered to.
Under 5 years must be within arm's reach of their
caregiver (who is 16 years old or older) at all times.
In addition, all children under 5 years and their
caregivers must wear a red wristband for the duration of their visit at the
facility. This helps identify our at risk swimmers and who should be keeping a
watchful eye on them.
5.3 The
CLM policy aligns Water Safety New Zealand and Recreation Aotearoa safety Pool
Alone policy which all public pools in New Zealand are required to adhere to.
5.4 With
the pool alone policy in place, a pre-schooler must enter a Council pool with a
supervising adult. This means that the entry fee for a pre-school swim is
$9.00, increasing to $9.90 on 1st July 2019. CLM advise that if the adult is
just standing in the water supervising a very young child in the beach area at
the Freyberg or the toddlers pool at the Lido, then the adult is not charged.
5.5 The
risk of Council adopting a policy of free entry for pre-schoolers, is that
pre-schoolers may end up inadequately supervised. For example, adults may
enter the pool with more than one pre-schooler under their supervision.
5.6 Auckland
Council Policy– Auckland Council has a policy for free entry for
children. When the policy was introduced in 2013, CLM noticed an increase in
the number of children being dropped off without supervision across all the
pools they managed. The number of rescues increased, particularly in the
initial period as parents would bring their children and leave them in the pool
on their own. In the under 5 age group an increased number of people
brought in under 5’s and left them unattended increasing the health and
safety risk in the facility. A lot of under 5’s also came in with
parents who also didn’t know how to swim and got into just as much difficulty
as their children. These issues led to the introduction of the red
wristband policy outlined in section 5.2.
5.7 CLM
recommend that if an under 5’s policy is introduced, that the Council
also implements a parent to child ratio. They advise that if per-school
children are free, is that parents will try and bring in large families/groups,
and not be able to actively supervise their children. The Auckland
Council ratios work well to prevent this issue. A copy of the Council policy is
attached to this report.
5.8 Christchurch
City Council Policy- the Council have mitigated the issue of children being
poorly supervised by adopting a charging policy of a pre-schooler with a
supervising adult being charged the same price as a child. It is listed
on their price schedule as pre-schooler with parent. The advantage of this
approach is that the pre-schooler cannot enter the pool without an adult, but
the adult can still enter the pool with children of other ages. The
disadvantage of this approach is that unless supervision ratios are also
adopted, the adult may be supervising a large group of children.
5.9 If
Council adopted this approach to charging, then the adult would be entering the
pool free, not the child. This has an impact on the cost, which would increase
by 25% ($5.50/$4.40) to an estimated annual cost of $33,427.50.
6. Alternative
Pricing options
6.1 Wellington
City Council - The Council offers discounted pool entry to holders of a leisure
card. The leisure card criteria are contained in the brochure attached to
this report. Card holders receive a 50% saving on pool entry prices,
except for the Khandallah Pool. Swimming is free for pre-schoolers at all
pools. The leisure card approach helps reduce the affordability barrier
for people living on low incomes, whilst still making swimming free for all
pre-schoolers.
6.2 The
leisure card offers discounts to a range of Council services. There is
not enough information currently available on the number of people in
Palmerston North who would qualify, or the cost to other Council services, to
make further officer comment on the suitability of this method of pool pricing.
6.3 Waitaki
District Council – In Term three of 2018 (23 July to 19 December 2018),
Council trialled a reduced entry price for adults and Community Card/ green
prescription /gold card entries between 9am and 3pm at the Waitaki Aquatic
Centre. The off-peak rates excluded weekends, school holiday and public
holiday days. The purpose of the trial was to assess the extent to which pricing
would modify demand for the Aquatic Centre.
6.4 The
Waitaki Aquatic Centre was experiencing substantial growth in the use of the
pools before and after school. The reduction in price was intended to
modify, and not increase demand.
6.5 The
disadvantage of this pricing approach is that people who are living on low
incomes, but who have fulltime commitments such as employment or volunteering,
do not benefit from the scheme. Information on entry patterns times of
entry would be needed before the benefits and costs of an off-peak pricing
approach could be assessed for the Palmerston North Council pools.
7. SUMMARY
7.1 Based
on the feedback it received from the community, the Council has included an
amount of $33,500 in the Draft Annual Budget 2019/2020 to implement free
swimming for children under the age of five.
7.2 The
cost of providing free swimming at Council pools for children arises from the
loss of revenue to CLM, which Council would need to compensate for under the
provisions of its management agreement with CLM.
7.3 The
experience of Auckland City indicates that a free-swimming policy is unlikely
to have a significant impact on demand in the long term, particularly if the
policy is limited to under five-year olds.
7.4 The
cost of providing free swimming for under five-year olds, at all three Council
pools 9 Lido, Freyberg and Ashhurst), for the duration of the 2019/2020
financial year, is estimated at $26,472.
7.5 The
risk of providing free entry for under five-year olds, is that this age group
may be left unsupervised at the pool, or that adults may enter the pool a
larger number of pre-schoolers than they can reasonably supervise. This issue
was experienced by other Councils.
7.6 The
issue of children being poorly supervised can be mitigated by introducing pool
supervision ratios at Council pools. The issue can be further mitigated by
charging a pre-schooler with a supervising adult the same price as a single
child. This would save a parent with one pre-schooler $5.50,
compared to $4.40 under the free pre-school entry policy. The other advantage
of this approach is that the pre-schooler could not enter the pool without an
adult, but the adult could still supervise children of other ages. This
pricing regime would need to be adopted in conjunction with supervision ratios
to avoid the adult supervising a large group of children.
7.7 The
estimated cost of introducing a policy of a pre-schooler with an adult paying
the child price, is $33,427. The cost of implementing this charging
regime is within the budget provision made by Council.
7.8 It
is therefore recommended that Council adopt supervision ratios at all Council
pools, and instead of introducing free swimming for under five-year olds, they
introduce a new price category to enable a pre-schooler with a supervising
adult to enter the pools for the price a single child.
8. NEXT
STEPS
8.1 Council
advises CLM of its decision to introduce pool supervision ratios in conjunction
with free swimming for supervised under five-year olds.
8.2 Council
prepares a marketing and communication plan to ensure the public is advised of
the changes to pricing for supervised pre-schoolers and the introduction of
supervision ratios before they come into force on 1st July 2019.
8.3 Officers
work with CLM to identify measures which will be used to indicate the success
or otherwise of the charging regime and the supervision ratios.
Indicators would include pool entry numbers, number of lifeguard rescues and
interventions involving pre-schoolers and/or their supervising adult, customer
satisfaction with the charging regime and pool entry pricing.
8.4 CLM
will use its point of sale (POS) system to record pool entries for
pre-schoolers with a supervising adult.
8.5 CLM
will make a monthly claim to Council, supported by POS records, for
compensation of revenue lost because of the new charging regime.
8.6 Officers
will report back to Council in February 2020 on the results of the first six
months of the new policy, with recommendations on any changes proposed, to
inform the 2020/2021 annual budget process.
3. Compliance
and administration
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Does the Committee have
delegated authority to decide?
If Yes quote relevant clause(s)
from Delegations Manual <Enter
clause>
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No
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Are the decisions significant?
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No
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If they are significant do they
affect land or a body of water?
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No
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Can this decision only be made
through a 10 Year Plan?
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No
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Does this decision require
consultation through the Special Consultative procedure?
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No
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Is there funding in the current
Annual Plan for these actions?
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Yes
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Are the recommendations
inconsistent with any of Council’s policies or plans?
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No
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The recommendations contribute
to Goal 2: A Creative and Exciting City
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The recommendations contribute
to the outcomes of the Creative and Liveable Strategy
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The recommendations contribute
to the achievement of action/actions in the Active Community Plan
The action is: The action is: Through
contract and facility management, and discussions with facility managers,
optimise the use of Council aquatic facilities and the Central Energy Trust
Arena.
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Contribution to strategic
direction
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Removing financial barriers
to accessing Aquatic facilities enables citizens to remain connected and
active
Ensuring that facilities are
profitable, enables them to continue to be run at a high standard and offer a
range of services, without impacting on other services of Council.
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Attachments
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1.
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Wellington City Council Leisure Card Application Form ⇩ 
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2.
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Auckland City Council Pool Alone Policy ⇩ 
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PALMERSTON NORTH CITY COUNCIL
Memorandum
TO: Committee
of Council
MEETING DATE: 10
June 2019
TITLE: Finalising
the Annual Budget (Plan) 2019/20
DATE: 27
May 2019
Presented By: Steve
Paterson, Strategy Manager Finance, Finance
APPROVED BY: Grant
Elliott, Chief Financial Officer
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RECOMMENDATION(S) TO Council
1. That the
Annual Budget 2019/20 as circulated with the report titled “Finalising
the Annual Budget (Plan) 2019/20” dated 27 May 2019 be adopted.
2. That the
Council acknowledge that the Annual Budget projects a deficit of $561k for
the year and resolves this outcome is financially prudent having regard for
the matters contained in Section 100 of the Local Government Act 2002.
3. That the
Mayor and Chief Executive be given delegated authority to approve the final
Annual Budget (Plan) document for publication.
4. That the
adoption of the Annual Budget (Plan) 2019/20 be confirmed as a significant
decision within the parameters of the Local Government Act 2002 and that the
Council is satisfied that all submissions had been considered and that there
has been compliance with the decision-making and consultation requirements of
the Act.
5. That the
Chief Executive be delegated authority to authorise payments to
Council-controlled organisations and other external organisations in
accordance with their respective service level agreements.
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1. ISSUE
To seek approval to the
proposed contents of the final Annual Budget (Plan) 2019/20, so it can be
formally adopted on 24 June 2019.
The information that was in the
proposed Annual Budget Consultation Document and supporting information has
been updated to incorporate the decisions of the Committee of Council meeting
on 20 May following consultation with the community.
2. BACKGROUND
The Council decided to consult
on the Annual Budget with the key issue being the proposed changes to the
rating system to help moderate the impacts on rates of the 2018 city
revaluation.
As part of the consultation process
Council decided it would seek feedback on two other issues:
· The
concept of a new flag for the City
· Whether
free entry should be given for under five year olds to Council pools
The Consultation Document and
supporting information highlighted the key proposed budget changes from year
two of the 10 Year Plan 2018-28.
The report to the Committee of
Council meeting on 20 May provided an outline of the consultation process used
for community engagement. It summarised the nature of submissions
received and provided officer advice to assist determining the way
forward. It also recommended estimated sums to be carried forward
for those 2018/19 programmes forecast to be incomplete at 30 June 2019.
In addition a series of other budget changes were recommended to reflect
updated assumptions and changed circumstances.
The meeting also considered the
minutes of the hearings.
Additional advice was provided
through officer presentations at the meeting.
The Committee determined what
changes it considered needed to be made to the provisional Annual Budget as a
consequence of the submissions and the updated information provided by
officers.
3. DRAFT
OF FINAL ANNUAL BUDGET
A draft of the Annual Budget is
circulated with this report. The draft includes changes recommended by the
Committee at its 20 May meeting that culminated in a budget which required an
increase in the total rates of 4.5%.
Section 100 of the Local
Government Act 2002 requires Councils to ensure that each year’s
projected operating revenues are set at a level sufficient to meet that
year’s operating expenses.
If a council determines it is
prudent not to have a ‘balanced budget’ (I.e. an operating surplus
is not required), it must make a formal decision to that effect. The
decision must be a prudent one and have included consideration of levels of
service and useful lifespan of assets. There are grounds for not having a
surplus every year to avoid building up unnecessary cash reserves.
The Council’s Projective
Statement of Comprehensive Revenue and Expense (as in the Annual Budget)
projects a deficit of $561k for the year. This is after taking into
account capital revenue of $11.3m. Part of the reason for the deficit is
that the projected unspent balance of two operating programmes (1525 &
1212) totalling $709k has been carried forward from 2018/19 and this cost is
included in operating expenses. However, as the rates for 2018/19
included provision to fund these programmes they have not been included in the
rates calculation for 2019/20. Rather it has been assumed they will be
funded from the 2018/19 year-end surplus.
The Annual Budget includes a
Disclosure Statement as required by the Local Government (Financial Reporting
and Prudence) Regulations 2014. One of the benchmarks required to
be shown is a balanced budget benchmark. Using the calculation
methodology required by the regulations a different deficit figure of $4.04m is
obtained. This calculation excludes forecast revenue from development
contributions and vested assets. As a result the planned outcome for the
year is 97.2% against a benchmark of 100%.
Council’s asset
management plans ensure the Council is appropriately planning for renewals and
its financial strategy is to make adequate provision to fund renewals from
rates revenue and as well to fund the repayment of debt over the estimated
useful life of assets (with a maximum of 30 years) funded from debt. The
2019/20 Annual Budget has been prepared using these principles.
During the budget process there
was some discussion about the quality of the asset condition information in the
asset management plans as there have been a number of recent examples of
needing to significantly increase the sums provided to undertake renewal
programmes. As part of the development of the next 10 Year Plan there
will be an even greater focus than in the past on gaining quality asset
condition information that can be relied on for longer term financial planning.
We will then be in a position to reassess the funding approach as part of the
review of the financial strategy.
However based on the present
information available the level of income sought for 2019/20 by comparison with
planned operating expenses is considered to be appropriate and financially
prudent.
4. NEXT
STEPS
Any changes made at the meeting
will be incorporated in the final version to be adopted by the Council at its
normal monthly meeting on 24 June 2019.
After the Council adopts the
final Annual Budget all submitters will receive a personalised letter outlining
the Council’s response to the points raised in their submissions.
Separate reports will be
provided directly to the Council meeting on 24 June recommending the formal
setting of the rates for 2019/20 and seeking approval to raising the additional
borrowing assumed in the budget.
5. Compliance
and administration
|
Does the Committee have
delegated authority to decide?
If Yes quote relevant clause(s)
from Delegations Manual <Enter
clause>
|
No
|
|
Are the decisions significant?
|
No
|
|
If they are significant do they
affect land or a body of water?
|
No
|
|
Can this decision only be made
through a 10 Year Plan?
|
No
|
|
Does this decision require
consultation through the Special Consultative procedure?
|
No
|
|
Is there funding in the current
Annual Plan for these actions?
|
Yes
|
|
Are the recommendations
inconsistent with any of Council’s policies or plans?
|
No
|
|
The recommendations contribute
to Goal 5: A Driven and Enabling Council
|
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The recommendations contribute
to the outcomes of the Driven and Enabling Council Strategy
|
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The recommendations contribute
to the achievement of action/actions in Not Applicable
The action is: The achievement
of all Plans is dependent on the Council approving the Annual Budget for the
year.
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Contribution to strategic
direction
|
Adopting the Annual Budget is
an essential precursor to the achievement of the Council’s strategic
direction.
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Attachments
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1.
|
Draft Final Annual Budget 2019/20 ⇩
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|
