Report - Analysis Reveals Councils Are Profiting From Sports Fees

Published: Sat 6 Aug 2022 12:06 PM
Councils apply user charges to recoup costs of operating and building public facilities for sports, but analysis of their cost recovery models reveals that charges to Regional Sport Operators (sporting codes) go far beyond this, and even acquire profit.
Artificial turfs are the main culprit of unjustifiable and rising costs. Wellington City Council sets user charges for turfs at 40% of total cost (a 60% discount). Councils charge this subsidised fee for turf users to recoup maintenance costs and recover the original build cost of the turf. Yet, privately-owned turfs in Wellington have the same user charges, despite charging users 100% of their maintenance costs and capital expenditure, with no subsidy.
To discover why, Wellington sporting codes undertook a close analysis of council’s operating expenditure models.
The analysis found that Wellington City Council has profited $270,000 on one turf by maintaining user charges despite having covered the turf’s depreciation costs years earlier. This could be the case for many other turfs around the Wellington region.
Furthermore, although the hourly council user charge of $80/hr is similar to privately owned turfs, it is meant to reflect a 60% discount on the cost of the turf to the Council. That means councils claim their real user charge should be $200/hr – over 100% higher than a privately-owned turf. In other words, sports players are paying 2.5 times more than they should be for turfs.
In fact, it appears that they may be paying 100% of the cost of turfs. That means not only is the user charge not discounted, a few sports are paying the full cost (and more), of an asset owned by, and available for use by, all ratepayers and residents.
Despite the already exceptionally high fees and recouped initial expenditure, councils continue to raise facility costs. The user-charges for turfs increased by 6.7% in 2022, without supplying any evidence that maintenance costs had gone up.
If the above is accurate, a review is needed to find out how and why;turf maintenance is costing councils so much more than the real-world costthe councils’ claimed 60% discount is not being applieda few sports codes are paying in full for assets owned and used by everyonesports codes have very little say or control over assets for which they have paid the total cost
This analysis shows that an independent review can find ways to reduce fees for sports venues and allow families better access to community sport.

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