The cost of “free” swimming pools
February 20th, 2012 at 4:00 pm by David FarrarBernard Orsman at the NZ Herald reports:
Auckland Mayor Len Brown wants ratepayers to believe free entry to the city’s 24 swimming pools will cost $5.5 million when it cost $6.7 million to provide free entry to six swimming pools when he was mayor of Manukau City.
Mr Brown is relying on a study by the international consultancy KPMG, which arrived at the $5.5 million figure on the assumption that there would be no change in patronage and operating costs and increased revenue from things such as spas, saunas, icecreams and chips.
Despite the assumptions, Mr Brown has included the $5.5 million figure in the draft long-term budget, which includes four options for funding swimming pools.
This is massively misleading, to project a cost for 24 free pools to be less than the cost for six.
The assumption of no increase in patronage, if entry is free, is absolutely daft. KPMG should be ashamed to put their name to such a work, unless they were instructed by the client to make that assumption.
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February 20th, 2012 at 4:09 pm
Or unless that figure was one of several, each of which was made using different assumptions.
Vote:February 20th, 2012 at 4:22 pm
massively subsidising pools so they are completely free is a real cost for ratepayers. Its not like capital expenditure which they can borrow.
By the looks of it, they’ll be spending more like $25 million for free pools across Auckland – each and every year.
I wonder what $18m each and every year is as a rates increase? Maybe 1%?
Vote:February 20th, 2012 at 4:23 pm
KPMG like all the Big 4 are a bunch of fraudsters. PWC wrote a report that said the assets Hanover were tipping into Allied were worth $396M. Six months later those same assets were valued at $93M. And today they are worth 2 fifths of stuff all.
Its time these cowboys were frog marched into Court and made accountable for the bullshit they crank out. They charge obscence sums for shonky reports and then run and hide behind disclaimers that say No Risk No Responsibility.
Vote:February 20th, 2012 at 4:27 pm
KPMG have obviously been employing ex-Treasury staff.
Vote:February 20th, 2012 at 4:29 pm
After the Supercity was created it meant all libraries across Auckland were amalgamated.
There has been a massive blowout in their budgets – all spent on employing extra staff to process book requests from across the region. Dozens of courier drivers now make a very handsome full-time living just moving library books from one end of Auckland region to the other.
There will be a similar budget blowout if the pools are opened up with no user paying to enter.
Vote:February 20th, 2012 at 4:48 pm
What was it they taught in 3rd form econmics about lowering the price and demand? I seem to think it was a fundamental fact that if it is free demand is unlimited.
Vote:February 20th, 2012 at 4:57 pm
Why would KPMG be ashamed? Look at many of their reports in relation to the US financial crisis (New Century Financial).
Vote:As always a case of payola.
February 20th, 2012 at 5:20 pm
@Chris2
Yup – the demand for library services and the range of books available to all Aucklanders have both increased massively since the supercity. Over time the overheads should drop – they are investing heavily in automated sorting machinery, they’ll have economies of scale in purchasing and contracting and inventory management. The libraries is one example of why a single super city makes sense. This is my favourite thing the supercity merger has delivered so far – of all the things my rates pay for running a decent library network is one I begrudge the least.
Interesting to read this bit:
“Mr Brown has included the $5.5 million figure in the draft long-term budget, which includes four options for funding swimming pools.
The options are free entry across Auckland at an extra cost of $5.5 million, free entry for children 16 and under at a saving of $450,000, full user charges at a saving of $2.5 million and the status quo of free entry in Manukau and user pays in other areas.”
Free entry for children makes a lot of sense:
- Won’t mess with demand as much as totally free entry (parents and guardians are still priced)
- Delivers one of the key objectives of free pools – teaching kids to swim and be safe in the water to reduce drowning deaths.
- Gives young people something social to do that’s healthy, safe and free – I’d argue to lift the age to under 18s.
- Costs a lot less than the full option and could be a good halfway compromise politically and fiscally.
It’s a few dollars a year in terms of my annual rates bill and provides a useful public service for a lot of people. it’s a drop in the ocean (or pool) compared to the millions they have given to SAP and HP for negligible visible improvement for any Aucklander.
Vote:http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10784578
February 20th, 2012 at 5:25 pm
I don’t know shit all about running a swimming pool, but is there actually much cost that goes up with the number of users?
Vote:February 20th, 2012 at 5:48 pm
Thanks Richard29 @ 5:20 for such a detailed reply.
I’m a bookworm and the service is great, so I’m not criticising what’s on offer, just making the point that as soon as something is free, demand does tend to increased dramatically, and that that will be the same for the pools.
It’s the lack of honesty about this from KPMG and Brown that I object to.
Vote:February 20th, 2012 at 6:45 pm
Nothing new: just more lies from comrade Brown, a recidivist liar.
Vote:February 20th, 2012 at 6:52 pm
What were the terms of reference given to KPMG, before we all blame them
Vote:February 20th, 2012 at 6:52 pm
I seem to recall our mayoral candidates in Lower Hutt offering ‘free’ pool entry for oldies at the last election. I think it’s been conveniently forgotten now, but it is a barmy idea. Most people that go to swimming pools can well afford it and making admission free would probably just increase the ratepayer subsidy enjoyed by middle-income swimmers.
Vote:A better idea might be to look at how council facilities can support learn-to-swim programmes at primary schools.
February 20th, 2012 at 7:13 pm
Chris2 (464) Says:
February 20th, 2012 at 5:48 pm
Thanks Richard29 @ 5:20 for such a detailed reply.
I’m a bookworm and the service is great, so I’m not criticising what’s on offer, just making the point that as soon as something is free, demand does tend to increased dramatically, and that that will be the same for the pools.
It’s the lack of honesty about this from KPMG and Brown that I object to.
Well hurry up and buy yourself a kindle.
Won’t be long and library’s will go the way of everything elese that looks like a dinasour.
Take away the free and start charging the true cost and when you are paying your share rather than expecting someone else to pay for you to live then you will be in a position to give an unbiased opinion. till then you are a freeloader using someone elses money to further your lifestyle.
Vote:AKA as socialism.
February 20th, 2012 at 7:14 pm
When Len was born G*d said ‘do you want brains?’
Vote:Len said thought G*d said Trains and said ‘no thanks, they’re to noisy’
Now Len can’t make his mind up, so swimming pools is the next brainfart
February 20th, 2012 at 7:25 pm
In my short time on this planet the only thing I have found that’s free is “a mothers love” apart from that what ever it is some one, some where pays.
I am amazed that anyone that walks erect doesn’t realize this.
Vote:February 20th, 2012 at 7:38 pm
KPMG report …
Reminds me of ‘what is 2 + 2′
Vote:Engineer 4
Scientist 3.99
Economist – it all depends
Accountant – what answer do you want?
February 20th, 2012 at 7:54 pm
There appears to be a logical disconnection between this:
“no change in patronage and operating costs”
and this:
“and increased revenue from things such as spas, saunas, icecreams and chips.”
To assume there would be no increase in patronage is crazy so I get the feeling that something has been lost in translation. KPMG are no dummies.
Vote:February 20th, 2012 at 8:01 pm
Mikenmild says:- “Most people that go to swimming pools can well afford it”
So presumably those who don’t can’t afford it… ever noticed how few brown swimmers there are at the Olympics? Think it might be a socio-economic phenomenon? Maybe red Len is attempting to address that issue….And we have appalling drowning stats in this country (yes we are surrounded by ocean I know)
Vote:February 20th, 2012 at 8:20 pm
Firstly, how do we know we have appalling drowning stats?
Yes, we have x number drown (123 in 2011), but as a percentage of people who use our beaches rivers and pools what are they? I would guess very few, in fact I would suggest that the total number of deaths would only be a small percentage of those using the beach on a busy Sunday at Piha.
We are told they are appalling by an organisation that depends on its funding by people drowning, if people didn’t drown they would be out of a job,so they have to generate much hysteria about the ” stats”.
Lens “free” talk has nothing to do with people swimming, its all about him being seen to give something ” free” which is of course rubbish because nothings free.
Vote:February 20th, 2012 at 8:49 pm
Many swimming pools are very cheap as it is. Pt Erin or Onehunga are $2.70 for children. What irks me is the charge of $1.10 for spectators. $1.10 is nothing to me so it’s not the cost, but I feel that as pools are potentially dangerous for children, we should be encouraging parents to supervise their kids, not penalise them.
Vote:February 20th, 2012 at 9:02 pm
Pauleastbay nailed it.
Dumass Aucklanders thrive on the word ‘free’ Arty farts in the park – free. Local park kids stuff – free. Chinese New Year at Telstra Events Center – free. There are many more things that are ‘free’ according to uncle Len.
Nothing is free Len and you better wake up and realise it, the RATEPAYER has had a fucking gutsfull of you and your free shit.
How about some free water? How about some free refuse collection? Why are my RATES up 35% from North Shore City Rates?
Oh, I get it. These FREE things are free because I pay for them. You Cock
Vote:February 20th, 2012 at 11:18 pm
Hollyfield says:- “we should be encouraging parents to supervise their kids, not penalise them.”
I agree. Stupid charge.
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>> “Firstly, how do we know we have appalling drowning stats”
People seemed to think the earthquake body count was pretty bad and it’s not far short of that, and is four times the Pike River thing. Difference is it happens every year. So much more tragic when things fall on you it would seem, but the grief is no less for those left behind.
Yeah it’s only a third of the road toll, but on average you might spend possibly 100 times longer in a car than you would in the water annually, and people seem to think our road toll is pretty bad.
Vote:February 20th, 2012 at 11:19 pm
Hmmmmm two completely contradictory statements in the same article.
Vote:So which is it?
A large increase in patronage and junk food eating and a cost blow out.
Or no increase in patronage and junk food eating keeping down the costs.
Can’t have it both ways
February 21st, 2012 at 12:00 am
As a resident of the old Auckland City, I’ve been driving across to Lloyd Elsmore to swim for free for a number of years, in doing so driving past the pool by Panmure Basin which you have to pay for.
With respect to the 5.5m figure, I think you have missed the word “extra”. They aren’t saying 5.5m to run 24 pools when it is 6.7m to run 6 pools. They are saying 5.5m extra funding will be required if the other 18 pools are free, i.e they will lose $5.5m in revenue (the 5.5m presumably being derived by adding up what they have earned plus a fudge factor for more people through the gates spending extra on ancillary service less an amount for extra running costs on the pools due to extra patronage). Is that number is accurate, probably not.
Vote: