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Why is this policy being developed?
A number of sports and service club buildings are located on Council land, mainly reserve land, and are subject to a lease. Some leases have been in place for a long period of time, and over the years there have been various lease conditions relating to rental and rent review periods. This has resulted in a range of lease rates with no consistent approach to the setting of these rates.
This policy seeks to apply a consistent approach to determining rental amounts, and provide more equitable and fair rental prices for recreational clubs across the district.
What changes are proposed?
It is proposed that all leases will be subject to an annual administration fee, as well as flat square metre rates, which are:
A commercial rate is also proposed for clubs undertaking commercial activities (e.g. operating a restaurant open to the public). An appropriate commercial rate will be set on an individual basis, and included in the lease agreement.
The following groups are proposed to be exempt from paying for land (beneath buildings or as exclusive use), and only pay the administration fee of $250.00, due to their exceptional community value:
Volunteer Coastguards and Surf Life Saving clubs, such as:
Waihi Beach Volunteer Coastguard
Waihi Beach Life Guard Services
Maketu Volunteer Coastguard and Surf Life Saving Club
Pukehina Surf Rescue
Scouts, Guides, and Veteran clubs, such as:
Scout Association of NZ: Katikati Sea Scouts
Scout Association of NZ: Te Puna Scout Group
Te Puke Scout Group
Omokoroa Pahoia Sea Scouts
The Legion of Frontiersman
Or similar organisations.
Why are some clubs proposed to be exempt from land rental charges?
All clubs are valuable to our District for their significant contributions to public recreation, social wellbeing, and health values among other reasons. However, Council also recognises that some voluntary clubs hold exceptional community value which would benefit from a reduced rental rate. These include Surf Life Saving clubs, volunteer Coastguards, Scouts and Guides, and the Legion of Frontiersman.
The policy is written to include “or similar organisations”, to futureproof the policy such that future clubs of similar nature are also exempted.
Will this affect my property rates?
As proposed, the policy would result in a reduction in the Reserves Infrastructure Group’s budget of $1,554.57 per year. If recovered through rates, this would amount to an increase of less than 8c per year as part of the Uniform Annual Charge.
When is this proposed to be implemented?
Council will consider all feedback received on the proposed policy and make any necessary amendments. It is anticipated that Council will make a decision on the policy in mid-June 2017.
This policy proposes to implement the new rental over a period of 5 years, to allow for a gradual change in fees for the clubs affected, i.e. at a change of 20% per year towards the new rental. Note that this would only begin to apply on the date of next rental review as per the individual lease agreements.
How much do clubs pay now, and what would the difference be?
As this policy seeks to even out rental charges, approximately half of the clubs will pay more than their current rate, and the other half of the clubs will pay less. This policy does not seek to increase Council’s revenue on land leased from Clubs.
Currently, the 27 clubs pay a combined amount of $19,210.21 per year. Under the proposed policy, this would reduce to a combined amount of $17,655.64, being a difference of -$1,554.57.
The policy also recognises that clubs may earn money through commercial use, such as operating a restaurant. It is proposed that leases with commercial uses would pay more, with the amounts determined on an individual basis.
Why not reduce rental charges to $0?
Not only would the reduced budget need to be recovered through rates increases instead, free land rentals would also create inequity to the community where only paying members can use clubrooms on land which is essentially owned by the public body. There is also a cost to Council to administer the lease with each club.
Some clubs also lease land exclusively for the club, whereby only members can access and use the public land. There would be no public benefit to Council owned land which is exclusively available to paying members, unless there was a financial gain.
It is noted that playing fields themselves (aside from those used exclusively by clubs, e.g. bowling greens), are free of charge.
My club has a liquor license, does this count as a commercial activity?
No. Historically liquor licenses provided some additional income for clubs, however since the lowering of the drink driving limit, most clubs have reported significant decline in revenue from liquor sales. As such, liquor licenses are now viewed as an additional social element rather than a significant source of additional funding.
Examples of commercial activities which would incur higher rental rates include restaurants and cafés that are open to the public.