A letter from the Chair RE Council funding request

Dear supporters and interested parties,

You will have seen the articles in the Dominion Post over the last few days about the Trust’s funding requests [http://bit.ly/sWi3BP] the Council’s working party [http://bit.ly/sT9zbk] and Saturday’s editorial on the issues. We would like to update you on these matters.

BACKGROUND

The Trust is first and foremost a community conservation project representing 11,000 members and 450 volunteers who have worked for 15 years to realise the original vision – to restore the forest and to be a reservoir for the dispersal of native birds. To date, thanks to all our supporters, the Trust has achieved significant milestones towards this vision. As a result, and with the help of the Council, Greater Wellington and DOC, our domestic gardens now abound with tūī, kākā, and kererū, with the increased presence of other native birds also in prospect.

As a not-for-profit organisation, the Trust relies on funding from sponsorships, grants, donations and visitors. In other words, fundraising is a core activity. Since inception, we have relied on operational grants from City Council to assist in the running of the sanctuary. The total operational grants received to-date for the last 15 years amounts to $7.6m.

In April 2010, the Visitor and Education Centre (the Centre) was opened, thanks to a $6.5 million grant from government and a $10.3 million interest-free loan from Wellington City Council. This initiative was underpinned by a business plan (the Plan) developed by the Trust in partnership with Council and Positively Wellington Tourism, before the global financial crisis. The Centre, always part of the Trust’s vision, is primarily a means to help fund the conservation project, It was also designed to extend educational opportunities, provide an enhanced experience and an all-weather visitor facility and ultimately to enable the conservation project to become financially self-supporting. The concept was hardly revolutionary – indeed all other Council-partnered attractions in Wellington – such as Te Papa and the zoo – have a range of similar revenue-generating activities to help cover their operating costs. The difference was that whereas Te Papa and the zoo and other attractions have a substantial annual operating grant from the Council, ZEALANDIA’s Plan envisaged no further subsidy from Council once the Centre was fully operational.

In the first full year of operations, despite the global financial crisis, the Trust achieved 89,000 visitors - a 45% increase from the previous year and, notably, a counter trend from other tourism operators. The Trust has also received excellent feedback on our enhanced visitor experience, and has developed a reputation in the international market. However, our visitor numbers were down on the 144,000 projected in the Plan – which in hindsight proved to be too optimistic.

An important point to note is that the Centre covers its own costs on a cash basis, indeed it makes a small cash surplus. But at this stage it does not generate sufficient additional revenue to cover the costs of running our conservation work in the valley.

So, in short, despite increased numbers and the success of the café, exhibition and store, and although we hold healthy cash reserves, run a lean operation and rely heavily on volunteers, ZEALANDIA needs an ongoing subsidy, at least in the short term, in order to remain viable.

WHAT HAVE WE DONE ABOUT THE FINANCIAL SITUATION?

The Trust commissioned Deloitte to evaluate a range of scenarios, from status quo to mothballing the Centre to full closure of the sanctuary. Deloitte’s analysis showed that the visitor centre is paying its way on a cash basis, and that full closure of sanctuary operations will still incur a management cost to ratepayers of an estimated $600,000 per year (as the Council owns the land and that is what it costs to have Council carry out basic maintenance on reserves of this size). As a result, they concluded the current operating model would produce the best outcome.

The Trust has been working on a range of initiatives aimed at improving operating results, including further expenditure reduction, and measures aimed at improving visitor numbers and revenues. It will take time to deliver these results.

We have also been working with Council for a number of months to evaluate alternative ways to supplement the funding of the sanctuary. The Trust has also been working with various potential partners such as Te Papa, DOC and the Tenths Trust to explore whether a stronger or formal alliance with one of these organisations would be beneficial. In the meantime, to meet the expected shortfall, the Trust has submitted a funding bid to Council as part of the Annual Plan process. The amount sought is $950k per year for the next three years.

WHY ARE WE ASKING COUNCIL FOR FUNDS?

ZEALANDIA is strongly aligned with Toward 2040 [www.wellington2040.co.nz], the new strategy for a smart capital city that looks to build on the ‘accessible nature’ dividend. The Trust is very conscious of the many competing demands on Council funds, however it believes the public good benefits the sanctuary generates for Wellington and the wider region justify a continuing subsidy from Council.

Environment

ZEALANDIA plays a critical role in the restoration of Wellington’s ecosystems. The impact on biodiversity in the region is now widely acknowledged, with the sanctuary acting as a hub for native wildlife dispersal. The Trust also plays a key role in wider regional and national conservation and environmental initiatives.

Social

ZEALANDIA is a centre for conservation education, telling the remarkable New Zealand conservation and natural heritage story. In the past year, 5978 students from 116 schools attended our highly acclaimed education activities at ZEALANDIA - an essential tool for us to communicate the conservation message to young minds.

Native birds have dispersed into the community’s gardens, enhancing the quality of life and acting as an impetus for community action and involvement. An estimated $25million volunteer effort has been put into ZEALANDIA over the last 15 years.

Economic

ZEALANDIA has generated significant international visibility for Wellington. As well as the environmental contribution, ZEALANDIA is delivering a commissionable visitor attraction that is encouraging people to stay longer and spend more in Wellington. As a ‘living laboratory’ the sanctuary is supporting a range of research projects contributing to the knowledge economy. It also assists Wellington to be a creative place where talented people want to live – a city with unique, accessible natural surroundings.

Overall

Overall, Wellington remains the only city in the world with an authentic, world-class sanctuary and an ecological restoration project in its centre. This is a clear natural advantage for the city, a major point of difference from other New Zealand cities and will ultimately enhance the international competitiveness of Wellington.

While the Trust will take longer to move away from relying on Council funding, the Trust is still committed to reducing this reliance over time and, ultimately, becoming self sustaining. In the short to medium term, we seek Council funding to support the significant public good generated by the Trust as set out above. This is consistent with Council funding of other organisations such as the zoo ($2.8m pa), Museum Trust ($7.7m pa) and Te Papa (2.5m pa). It is important to understand the subsidies effective around Wellington – the list included in this Dominion Post article [http://bit.ly/s56ncI] is worth a look.

NEXT STEPS

The Council is a strategic partner and a principal funder of the Trust. It recognises the significant benefits the sanctuary generates, and in particular its importance in the recently released Wellington 2040 Vision.

The Council has now set up a working party to consider the Trust’s funding request, and to develop a range of options for Council to consider by 23 February 2012. This will include:

• developing a set of criteria based on council’s strategic priorities under which identified options and alternatives will be assessed, with particular attention given to the impacts on conservation, biodiversity , visitor attractions and the cost to ratepayers

• and assessing the options against the criteria identified.

HOW YOU CAN HELP

Your ongoing support is appreciated and your voice makes a difference. Help spread the word about the true value of ZEALANDIA to those around you and express your opinions to the editors of local newspapers. It can be an uphill struggle to change the value perceptions of those who haven’t recently visited ZEALANDIA, so here’s a hint:

There’s a 2 for 1 voucher available on advent.wellingtonnz.com (click the tūī) and kids go free at ZEALANDIA until 24 December. Tell your friends about these offers, and membership, so they can see what we’re doing first-hand!

Catherine Isaac,

Chair.

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