IT’S the elephant in the room for the new council.
The amount of ratepayers’ money it has so far cost the South Gippsland Shire Council to restructure the operation of its caravan parks at Yanakie and Port Welshpool.
But, at a public presentation session in Leongatha last week, local businessman Lindsay Love, addressed this issue, revealing that by the shire’s own admissions, it had spent $750,000 on the facilities in the three months, from June to September 2016.
The main problem with that, according to Mr Love, is that the shire is likely to nett only $50,000 income annually from the two parks after operational expenses were paid.
“You’ve got to drop the concept of running caravan parks. You should not be in this business,” he told the new council.
Mr Love laid out his estimate of income and expenditure from the two caravan parks and claimed the shire had “a major issue if council thinks it can continue to run its parks”.
He said it was OK that they had spent money to improve the parks and to comply with government requirements but it had to stop haemorrhaging ratepayers’ funds by leasing the parks out to an approved operator.
“Ratepayers don’t want the expenditure of $750,000. They want to see a surplus of income coming in.”
Mr Love said he had also seen that the shire advertised recently for another employee to help run the parks but he advised that the council should discontinue the recruitment and immediately move to lease the park out, possibly clearing $100,000 annually, and start to cover the horrendous losses it had so far incurred.
Mr Love said that when the hidden costs were added in, including the cost of work done by head office staff, losses could be considerably higher.
And it has to stop he said.
“The public can readily see that we have a defined income source, no strings attached, no hidden charges and no extra staff on the payroll,” he said, if the parks were leased out rather than operated directly by the shire.
“The lease payments can have a CPI increase built-in and hence the income source should grow over time for the Council.
“I urge council to urgently advise the administration that council will no longer be running caravan parks and that the staffing addition should be avoided.”
Coal Creek concerns
Mr Love also raised concerns about the on-going cost of operating Coal Creek Community Park and Museum which he claimed was in the order of a $600,000 loss annually.
He claimed such losses were unsustainable.
“You’ve got to decide what you are going to do with Coal Creek,” he said.
“You might have been able to go the route of selling it to the school camp operator which recently purchased Rumbug and Campaspe Downs Adventure Park but that might not be an option now,” he said.
Shire responds to park attack
ASKED for a response on the losses quoted by Mr Love at last week’s presentation session, South Gippsland CEO, Tim Tamlin, didn’t address those losses directly.
“When the leases expired on the caravan parks at Long Jetty and Yanakie in 2013 Council made the decision to take over direct management of both parks. This was done for a number of reasons, the topmost being that the parks had become rundown and needed a significant investment to bring them up to a standard to market to tourists,” he said.
“The Yanakie Caravan Park is ideally positioned to provide accommodation for people looking to visit Wilsons Promontory and surrounds at a lower cost than staying at the National Park camping area at the Prom.
“The Long Jetty Foreshore Caravan Park is perfect for people interested in the outdoors, for fishing, relaxation away from crowded spaces and enjoying the coastal and rural area environment.
“As a result of the investment Council has made both parks are now being marketed to a growing number of people attracted to our region. This has a significant economic multiplier for surrounding towns, so while the investment in the parks can be measured – that said, I’m not sure where Lindsay got his numbers from – the benefits are much greater than the takings at the parks themselves.”
Mr Tamlin didn’t comment on the alleged cost of operating Coal Creek but he responded to Mr Love’s comments as follows:
“As for selling Coal Creek, that is simply not an option as it is Crown land.”