Coal Creek – black hole or money spinner?

SOUTH Gippsland Shire Council has deferred making a decision on the future of Coal Creek Community Park and Museum, opting instead to hand the matter over to the Financial Sustainability Committee for consideration in its deliberations over the 2015-16 Budget.

Community opinion on the one-time Korumburra coal mine, developed into a heritage village forty years ago, has long been divided, with opponents of the facility outraged that the cash-strapped Council subsidises Coal Creek to the tune of around $600,000 each year.

Well aware of the division amongst its ratepayers, Council has long agonised over Coal Creek and has commissioned numerous studies and plans in recent years to help in a decision on its future. Accompanying the agenda to last Wednesday’s council meeting was a report by shire officers, developed after a comprehensive feasibility study and a draft development plan on Coal Creek.

The report noted that Council’s investment in Coal Creek provides an economic return of $2.9 million per annum and three additional jobs to the South Gippsland economy, and that approximately 60 per cent of Coal Creek expenditure is spent within the local community. However, it also noted that while visitor numbers have increased in recent years (particularly since entry became free) revenue has not grown at the same rate. Coal Creek is heavily reliant on volunteers – it is estimated that volunteer time equates to approximately $500,000 in equivalent salaries per year. The most significant factor in the lack of profit is the cost of building maintenance, gardens and service delivery. Any revenue raised is offset by staff costs and materials.

The report sets out three options:

1. Close the park (at an estimated cost of $2.44million)
2. Proceed with the recommendations of the Feasibility and Development Strategy, which would involve major investment and no guarantee of reaching cost neutrality in the foreseeable future; or
3.  – and this is the recommended option – continue current operations and proceed only slowly with some of the smaller initiatives identified in the feasibility study to increase income.

Council, however, at last Wednesday’s meeting, did not take up any of the options, choosing rather to defer a decision. This incensed at least one ratepayer. As she points out in a letter to The Mirror, Meg Knight was “appalled”. She writes: “Councillors had before them:

1. Information at Agenda item E.3 – 28 pages;
2. An Appendix of a Report on Coal Creek – 52 pages;
3. Confidential Appendices 1,2,3, & 4 focussing on financial analysis, operational budget and finances out to 2020, Proposed capital works and site rationalisation (Of course we mere ratepayers couldn’t see these confidential appendices);
4. d. Innumerable reports and plans from the past 8 years.

“There was no formal discussion on pros and cons of various actions which could be taken. Council mentioned in passing it had made a continuing “investment” of over $600,000 pa. for some years in Coal Creek. Since when was meeting operating losses of over $600,000 p.a. over several years “an investment “ – in my eyes that is throwing good money after bad !

“After approximately 2 minutes it was decided by Council to defer the matter to the Sustainability Committee – what or who that is I have no idea. Exactly what further information does Council require before it is able to have a rational discussion and make a decision?

“The Coal Creek annual loss of $600,000 is 1.7% of our rates – that is our rates could come down by that amount if we were not supporting Coal Creek.

“I call on Council to put Coal Creek back on the June agenda and actually make a decision!”

Speaking later to The Mirror, the mayor, Cr Jim Fawcett, explained that Councillors need more time to discuss the future of Coal Creek. He said that Council would be making a decision on how it runs Coal Creek (and how it runs its swimming pools, he pointedly added in a clear reference to other heavily-subsidised loss-making council facilities) in the next five months.

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