Indoor Aquatic Centre Strategic Review...2010/06/29 · Lower Blue Mountains Leisure Centre Feasibility of Expanded Health & Fitness/Indoor Play Facilities Page 3 Current Issues High

Final Report May 2010

In association with Field Works Australia

Indoor Aquatic Centre Strategic Review Blue Mountains City Council

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T A B L E O F C O N T E N T S

1 INTRODUCTION ............................................................................................................................ 1 1.1 Project methodology.......................................................................................................... 1

2 PREVIOUS RESEARCH REVIEW...................................................................................................... 2 2.1 Management Plan–Towards a More Sustainable Blue Mountains 2008-09 ................... 2 2.2 Leisure Services & Business Marketing Strategy 2005...................................................... 5 2.3 BM leisure Centres Business Plan 2009-10 ........................................................................ 6

3 AREA OVERVIEW.......................................................................................................................... 7 3.1 DEMOGRAPHIC REVIEW ...................................................................................................... 8

3.1.1 CATCHMENT & POPULATION REVIEW ........................................................................... 8 3.1.2 POPULATION AGE STRUCTURE........................................................................................ 9 3.1.3 FUTURE POPULATION AGE STRUCTURE PROJECTIONS .............................................. 10

3.2 Other Demographic Trends.............................................................................................. 12

4 COMPETITOR REVIEW................................................................................................................. 12

5 FUTURE MARKET GROWTH POTENTIAL ....................................................................................... 16

6 ORGANISATIONAL STRUCTURE & MANAGEMENT .................................................................... 16

7 SALC FACILITY & OPERATIONAL REVIEW .................................................................................. 17 7.1 Existing Facilities................................................................................................................ 17 7.2 Financial Review ............................................................................................................... 18

7.2.1 SALC Health & Fitness Area Budget Review.............................................................. 19 7.2.2 SALC PRICING REVIEW .................................................................................................. 20

7.3 USAGE REVIEW................................................................................................................... 22 7.3.1 SALC Membership Review ........................................................................................... 23 7.3.2 SALC Group Fitness Program Review ......................................................................... 24 7.3.3 SALC Weights/Cardio Capacity Review ................................................................... 24

7.4 SITE REVIEW ........................................................................................................................ 25

8 GLENBROOK FACILITY & OPERATIONAL REVIEW...................................................................... 27 8.1 Existing Facilities................................................................................................................ 28 8.2 Usage Review.................................................................................................................... 28 8.3 FINANCIAL REVIEW............................................................................................................ 29

9 MARKET RESEARCH & CONSULTATION ..................................................................................... 30 9.1 HOUSEHOLD SURVEY ......................................................................................................... 30

9.1.1 Respondent Sample ..................................................................................................... 31 9.1.2 Current Use Of Pools & Leisure Centres...................................................................... 32 9.1.3 Aquatic Participation Comparisons ........................................................................... 32 9.1.4 Most Popular Swimming Pools ..................................................................................... 33 9.1.5 Use of Pools by Gender ................................................................................................ 33 9.1.6 Use of Pools by Age ...................................................................................................... 34 9.1.7 Rating of Current Pools & Services.............................................................................. 34 9.1.8 Main Activities That Attract Users ................................................................................ 36 9.1.9 Member Of/Use A Health & Fitness Club Or Gym.................................................... 37 9.1.10 Member Profile of Health and Fitness Club or Wellness Centre ............................. 37 9.1.11 Most Popular Health And Fitness/ Wellness Centres ................................................ 38 9.1.12 Rating Of Current Health & Fitness Centres............................................................... 38 9.1.13 Facilities or services respondents are dissatisfied with............................................. 39 9.1.14 Health And Fitness/ Wellness Centre User Profiles .................................................... 39

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9.1.15 Main Activities That Attract Users ................................................................................ 40 9.1.16 Future Use Of Health And Fitness/ Wellness Centres................................................ 41 9.1.17 Potential Use Of Redeveloped Health & Fitness Facilities....................................... 42 9.1.18 Health & Fitness Facilities Users Would Like To See Developed.............................. 43 9.1.19 Indoor Children’s Play Facilities ................................................................................... 43 9.1.20 Future Use of Indoor Play Centres............................................................................... 44

9.2 Existing User Survey........................................................................................................... 44 9.2.1 Respondent Profile ........................................................................................................ 44 9.2.2 Use of Aquatic Leisure Centres ................................................................................... 45 9.2.3 Future Use of Aquatic Centre...................................................................................... 47 9.2.4 Use of Health & Fitness Facilities .................................................................................. 47 9.2.5 Future Use of Health & Fitness Facilities ...................................................................... 48 9.2.6 Use of Indoor Children’s Play Centres ........................................................................ 49 9.2.7 Future Use of Indoor Play Facilities.............................................................................. 50 9.2.8 Summary of User Survey Comments........................................................................... 50

9.3 STAKEHOLDER Workshops................................................................................................. 52 9.3.1 Springwood Aquatic & Fitness Centre Users ............................................................. 52 9.3.2 BMCC Staff Workshop................................................................................................... 53 9.3.3 Glenbrook Users & Residents Group Workshops....................................................... 54

9.4 Stakeholder Interviews ..................................................................................................... 55 9.5 WRITTEN SUBMISSIONS....................................................................................................... 56

10 SUMMARY OF KEY FINDINGS ............................................................................................ 56

11 FACILITY DEVELOPMENT STRATEGY................................................................................... 60 11.1 FAcility PROVISION Principles ...................................................................................... 61 11.2 KEY STRATEGY DRIVERS ................................................................................................. 61 11.3 FACILITY DEVELOPMENT STRATGEY............................................................................... 62

12 SALC EXPANDED HEALTH & FITNESS FACILITY DEVELOPMENT OPTION........................... 63 12.1 Priority Facility Components & AREA SCHEDULES ....................................................... 63 12.2 PRE-DESIGN COST ESTIMATES ....................................................................................... 64

13 BUSINESS & FINANCIAL PLANNING................................................................................... 65 13.1 Key Business Assumptions............................................................................................ 66 13.2 FACILITY BUSINESS MODEL & SCENARIOS .................................................................... 68

13.2.1 Base Case....................................................................................................................... 68 13.3 Capital Repayment & OPERATIONAL SUBSIDY Contributions .................................... 69 13.4 business sensitivity analysis.......................................................................................... 69

13.4.1 Optimistic Case.............................................................................................................. 70 13.4.2 Conservative Case........................................................................................................ 71 13.4.3 Very Conservative Case............................................................................................... 72

13.5 BUSINESS SCENARIO COMPARISONS........................................................................... 73 13.6 ALTERATE DEVELOPMENT OPTION................................................................................. 73 13.7 CONCLUSIONS............................................................................................................... 74

14 RECOMMENDATIONS ........................................................................................................ 75

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A P P E N D I X Appendix 1 – Detailed Business Plan Summaries Appendix 2 – Capital Loan Repayment Schedules Appendix 3 – Market Research & Consultation Summaries

Lower Blue Mountains Leisure Centre Feasibility of Expanded Health & Fitness/Indoor Play Facilities Page 1

1 I N T R O D U C T I O N

SGL Group were commissioned by Blue Mountains City Council (BMCC) in September 2009 to assess the feasibility of expanded health & fitness and indoor play centre facilities at the Lower Blue Mountains aquatic centres. Council had requested the study be completed following customer complaint regarding overcrowding at the Springwood Aquatic Leisure Centre and potential impact on centre operational performance. A resolution of the May 2009 meeting of Council stated That a preliminary Business Case and Market Analysis into the expansion of the Springwood Aquatic and Fitness Centre fitness facilities, incorporating a children’s play land facility is reported to the Council by June 2010. Centre management had identified the key issues as high demand for health & fitness programs and associated capacity constraint due to a lack of facility space, as the key issues driving customer dissatisfaction, and whilst management had put in place programming & management strategies in place to try and lessen the impact of overcrowding, ultimately, these strategies were short term fixes, and likely to hurt the business in the long-term. Thus commissioned SGL to analyse the feasibility of developing new facilities, onsite and/or possibly, at Glenbrook Aquatic Centre, due to the significant site constraints of the Springwood Aquatic Leisure Centre, to firstly lessen demand on the Springwood Centre and improve operational performance across the aquatics business group. Specifically, the Scope of Works, as described in the project brief were to: “Research the market and utilise existing information to provide a report outlining;

- - Description of investigated options, the operation and services - Market assessment - Predicted visitation and revenue - Operational costs including employment - Impacts, on existing Leisure facilities - Commercial viability assessment - Financial implications for the Council”

Key health & fitness market research questions centre management sought answers to, were:

- Does the person utilise the current council fitness facilities? - Does the person utilise a private fitness facility? - What is the location of the private facility? - If additional Council facilities were provided would they use them? - What fitness facilities are desired? Eg Group Fitness, Free weights etc

The following Section outlines the project methodology used to meet the scope of works and answer these key market demand questions.

1.1 PROJECT METHODOLOGY

The following project methodology was undertaken to complete the study. Stage One: Background Research


Previous Research Competitor Review Existing Facility & Business Review Industry Trends

Stage Two: Market Research & Consultation

Household telephone Survey Stakeholder Consultation Location & Site Review Key Findings

Stage Three: Feasibility Scope of Works

Development Options Facility Specification

Stage Four: Business Planning

Financial Modelling Facility Development Staging Reporting Presentation

2 P R E V I O U S R E S E A R C H R E V I E W

To assist in guiding future development options & scenarios SGL have reviewed a range of previous organisational and strategic environment documentation. The findings of the review are summarised below:

2.1 MANAGEMENT PLAN–TOWARDS A MORE SUSTAINABLE BLUE MOUNTAINS 2008-09

The following is a précis of the management plan, as relevant to the current study: Councillor priorities Councillor priorities for action in the period 2008-12 include:

Council’s Financial Sustainability Renewal & maintenance funding gaps – incl. equitable service provision Strong LEP/Managing Development Complete Major Projects Leadership on Climate Change Sustainable economic Development Focus on children & families Waste management Community input on decision making Great Western H’way improvement Healthy Communities Improved partnerships Environmental protection Build on “Relevance Responsiveness Respect” Educating community on Council financial position Well run organisation Civic Leadership – World Heritage Area 21st Century thinking & e-skills


Current Issues High level of services subsidies, low level of cost recovery (ie. fees & charges account for approx. 13% overall budgeted revenues) Aquatic & Leisure Centres are considered Business & Commercial Activities of Council, that are undertaken with the intention of generating surpluses, that if achieved, can be used to help fund other operations of Council. This should reflect in future direction & decision making for aquatic leisure centres. Average annual gap in asset maintenance and renewal funding estimated at between $3.5 - $6.8 million over the 2008-2012 period. (See also Sustainable Asset Management Plan) Key Principles of Capital Works Planning, that need to be considered in future Aquatic Leisure Centre planning are:

Planning for new assets aligns with the needs of the City and the Council’s capacity to maintain them into the future.

The social, environmental and economic impacts of creating any new assets in the City have been carefully considered.

Renewal of our existing assets aligns with the Council’s Sustainable Asset Management Plans and ensures existing assets are maintained in good condition into the future.

The amount of funding the Council allocates to the Capital Works Program is based on what the Council can afford and is sustainable into the future.

The Council has capacity to deliver the Capital Works Program, especially with the current major commitments to Lawson Town Centre, Cultural Centre and Blaxland Waste Management Facility

Relevant Future Objectives, Strategies & Actions The Plan divides Council’s activities into six key areas; Good Government, Looking after the Environment, Looking after people, Using Land for Living, Moving Around & Working & Learning. Aquatic & Leisure Centres fall under “Looking After People”. The “Looking after people” also covers areas such as: Childcare, Community Development & Safety, Environmental Health & Compliance, Sport & Recreation and Emergency Management. Estimated total budget expenditure for 2008-09 was $35.15 million, representing approx. 35% of Council’s total estimated budget. Key Objectives include:

Healthy Lifestyles are encouraged & supported People of all ages have access to a range of recreational, sporting & cultural

opportunities Services & facilities are optimally located to maximise access and benefits Resources are fairly allocated Individuals & organisations support those most in need within our community

Relevant actions & budgeted items include:

New aquatic & leisure centre programs developed New indoor play centre for Katoomba Sports & Aquatic Centre Sport & recreation Total Expenditure Budget 2008-09 $7.97 million Leisure & Aquatic Centre – Asset & Infrastructure Renewals expenditure

$200,000


Organisational Structure The Cities Organisational Structure sees two key departments with an interest in the project.

BM City Services Group, a business unit of Council, responsible for service delivery, as specified, in which BM Leisure Centres resides.

Community & Corporate Group responsible for strategic & services planning,

services specification & major projects delivery. Sustainable Asset Management Plan (SAM) 2005 To provide a guide to future capital works for Springwood Aquatic Leisure Centre & Glenbrook Swim Centre, the relevant 20011-2015 projected asset renewal and capital works expenditure has been summarised in the following tabled, sourced from Council’s Sustainable Asset Management Plan 2005.

The Financial Summary indicates Council will allocate approximately $207,000 per annum or $1,035,000 over the next five years for asset renewal across Council’s 5 Aquatic facilities. No allocation has been made for new capital works. Of this expenditure an estimated $65,000 is allocated to both Springwood Aquatic Leisure Centre & Glenbrook Aquatic Leisure Centre. The SAM concludes there is likely to be a major gap in actual and required renewal capital expenditure that needs to be addressed to maintain both the asset & service levels. Please note: Minor works are allowed for in maintenance costs, funded in part from SLA and part by division operations budget. A summary of Terms is provided in the Table below also sourced from the SAM Plan 2005.


2.2 LEISURE SERVICES & BUSINESS MARKETING STRATEGY 2005

The following is a précis of the Leisure & Services Marketing Plan, as relevant to the current study: Business Unit Vision To provide a range of leisure opportunities that will make a difference to the wellbeing of the Blue Mountains community Key Leisure Services Programs-Offerings Message

- Get Active….. - Stay Healthy & Well…. - Enjoy Your Leisurely Lifestyle…..

Key Target Markets

- Pre-schoolers - School Children - Teenagers - Adults - Families - Older People

Key Recommendations Emphasis of programs to be more holistically focused on lifestyle & wellbeing More comprehensive range facilities & services - to be focussed outside the centres, more

community outreach styled delivery – more accessible, more involving. Change name of unit to Lifestyle & Leisure team Work better in partnership with others – become a facilitator not just provider Marketing Strategy, reposition to distinguish each centre, focus on marketing & program

delivery in key areas offered


2.3 BM LEISURE CENTRES BUSINESS PLAN 2009-10

The following is a précis of the 2009-10 Business Plan as relevant to the study. A more detailed analysis can be found in Section 5. Role & Function BM Leisure Centres provide facility management, service & program delivery for Blue Mountains City Councils Leisure venues including:

Blackheath Pool (4 mth Summer Season) Katoomba Sport & Aquatic Centre (Year round) Lawson Swim Centre ( 6 mth Summer Season) Springwood Aquatic Centre (Year round) Glenbrook Swim Centre (9 month per Year)

Current Issues & Trends

Revenue Sources - 32% Service Level Agreement, 68% Memberships, Fees & Charges

Increasing Revenues – 20% 2004-05 ($3.48M) to 2008-09 ($4.3M) Fees increasing 8-10% 2009-10 to meet budget parameters Aging Infrastructure, Lack of asset renewal investment, Need to develop new-diversify programs to continue to grow revenues Aging & capacity constrained infrastructure will impact future program

delivery and therefore, revenue expectations/projections if not addressed Key Objectives & Targets Key objectives & targets relevant to the current study include:

Objective Target

Maximise Participation, through promotions & program development

> increase avg. pa visitation 2%

Quality of visitor experience meets/betters industry standard > CERM Industry Mean Branch profitability +/- 1% Effective Pricing New pricing for group fitness Increase Gross value of external revenues +3% per annum New program development 80% participation, +2% pa

growth Improve kiosk performance & sales Maintain compliance & Quality Assurance systems Improve staff capability/multi-skilling Min 2 programs per staff

member (>50pp) Contribute to energy & water efficiency targets to reduce emissions by 10% by 2012, on 2004 levels.


3 A R E A O V E R V I E W

The Blue Mountains local government area covers 143,000 hectares, in the Greater Sydney Region, of which about 70% is within the World Heritage Blue Mountains National Park. In 2006 there were approximately 73,000 people living with 27 towns & villages. Figure one below provides a map of the Council area, indicating the locality of various towns & villages.

This study focuses specifically on the Lower Blue Mountains area representing approximately 57% of the total municipal area population or 43,000 residents (based on ABS 2006) and incorporating the following townships & villages: lapstone, Glenbrook, Blaxland, East Blaxland, Hawkesbury Heights, Hazelbrook, Linden, Springwood, Sun Valley, Warrimoo, Winmalee, Woodford & Yellowrock. Total population is projected to rise slightly too around 78, 521 by 2021, much of which is expected in the Upper Blue Mountains Area. A review of relevant 2006 -2010 ABS statistics and population projections for the City and Lower Blue Mountains Area are detailed in the following sections.


3.1 DEMOGRAPHIC REVIEW

Use of swimming pools in relation to an areas population gender and age groups is well documented but there are limited information on trends in relation to income levels, cultural diversity, ethnicity and car ownership. As such, the focus of the following review is on population and age trends.

3.1.1 CATCHMENT & POPULATION REVIEW

Industry standards indicate most people in metropolitan areas, use aquatic leisure centres that are close to home, and will travel between 10 and 20 mins. This usually sees a catchment zone of up to 5km radius of a centre. The exception is in those circumstances where centres are “destinational” and attract users from across a metropolitan area (ie Sydney Olympic Park Aquatic) or where there is a lack of quality facilities close by. In regional areas (which it could be argued the Blue Mountains more closely resembles) industry standards suggest people are prepared to travel for a greater amount of time, generally up to 30-40 mins. A population review of the Lower Blue Mountain Aquatic & Leisure Centres primary catchment area (up to 5km) and secondary catchment (municipality wide) has been completed and a diagram illustrating the catchment zones & associated population by locality is provided below.


A breakdown of current population and future projections for the City & Lower Blue Mountains catchment zone(s) by locality, is provided in the following table.

CATCHMENT AREA LOCALITY ESTIMATED POPULATION 2010

ESTIMATED POPULATION 2021

Blue Mountains City 77,494 78,521

Upper Blue Mountains

Blackheath & surrounds, Katoomba-Medlow Bath, Lawson-Bullaburra, Leura, Mt Riverview, Wentworth Falls

32,297 33,313

Lower Blue Mountains 45,197 45,208

Zone One Hazelbrook 4,568 4,560 Woodford-Linden 2,556 2,562 Faulconbridge 3,879 3,876 Zone Two Springwood-Valley Heights 10,511 10,839 Winmalee-Yellowrock 7,997 7,899 Sun Valley Zone Three Warrimoo 2,357 2,348 Blaxland – East Blaxland 7,194 7,107 Glenbrook-Lapstone 6,130 6,017

The review indicates a small to medium population both now and in the future in the primary (Lower Blue Mountains Area) and secondary catchment areas (BMCC Area). Total population estimated for the Blue Mountains City area is 77,494 in 2010. This is projected to grow only slightly by 1.3% or approximately 1027 persons by 2021. The Lower Blue Mountains Area, has some estimated 45,197 people in 2010 and is projected to remain stable over the next 10 years.

3.1.2 POPULATION AGE STRUCTURE

When reviewing the catchment population of Sport & Aquatic Centres and the issues of aquatic use, the key statistic is the age profile of the population as there is significant information related to use of pools by age groups. The diagram below details the age profile of the existing Blue Mountains City Council area population based on 2006 ABS. PLEASE NOTE: Whilst there is likely to be some variation between the City age structure & the Lower Blue Mountains catchment zones, this is unlikely to significantly different from the broader region.


A review of the Blue Mountains City age structure indicates that there are a larger proportion of people in the younger age groups (0 to 17 yrs) as well as people in the older age groups (60+) years. Overall, 25.1% of the population was aged between 0 and 17, and 18.7% were aged 60 years and over, compared with 23.6% and 16.7% respectively for the Sydney Statistical Division. Leisure statistics indicate that people aged between 0 to 49 years are more likely to participate in aquatic and leisure activities. People in this age group currently represent approximately 66.1% of the Blue Mountains City population. In 2006 the highest proportion of people were aged between 35 to 49 years 22.6%, followed by 50 to 59 years 15.2%, 25 to 34 years 10.5% and 5 – 11 years 9.7%. The major differences between the age structure of Blue Mountains City and the Sydney Statistical Division were: A larger percentage of 50 to 59 year olds (15.2% compared to SSD 12.2%); A larger percentage of 60 to 69 year olds (9.3% compared to SSD 7.8%); A smaller percentage of 25 to 34 year olds (10.5% compared to SSD 15.3%), and; A smaller percentage of 18 to 24 year olds (7.9% compared to SSD 9.9%).

3.1.3 FUTURE POPULATION AGE STRUCTURE PROJECTIONS

Whilst the overall population of the city is expected to only increase slightly (1027 persons), future age projections indicate a general aging of the population, with people aged 60 years expected to represent a larger overall percentage of the population, as illustrated in the following


diagrams

The following diagram indicates forecast change in actual population numbers per service group.

The largest changes in age structure in this area between 2006 and 2021 are expected in the age groups:

60-69 years (+3,363) 70 to 84 years (+2,242 persons). 35 to49 years (-1,530 persons);


At the same time household size is expected to fall over the next decade, as the population ages. This will increase need for activities & places that provide social and community connections for more isolated individuals and households.

3.2 OTHER DEMOGRAPHIC TRENDS

Based on the 2006 Census, the following key socio-economic trends are observed of the Blue Mountains City area:

Less ethnically diverse than the Sydney Statistical region, with less people born overseas, less people from non-english speaking background (NESB) and less aboriginal & Torres Strait Islanders.

Slightly less affluent compared to the Sydney Statistical Division with a smaller

proportion of high income households (those earning $1,700 per week or more) but a similar proportion of low income households (those earning less than $500 per week).

A larger proportion of people hold formal qualifications (Bachelor or higher

degree; Advanced Diploma or Diploma; or Vocational qualifications) and a smaller proportion of people with no formal qualifications, when compared to Sydney Statistical area, with a trend to increasing higher education and formal qualifications.

4 C O M P E T I T O R R E V I E W

To assist in understanding the competitive environment SGL reviewed a range of current & likely competitors (excluding Council owned facilities) within a half hour catchment of the Lower Blue Mountains Aquatic Centres. The results of the review are summarised in the following table.


NAME OF CENTRE LOCATION FACILITIES PROGRAMS & SERVICES PRICING

HEALTH & FITNESS

Curves Springwood Shop 7, 135-141 Macquarie Road Springwood NSW 2777

Womens Gym Only - hydraulic resistance equip only

-30 min circuit program

Curves Blaxland Shop 2, 126 Rear Great Western Highway, Blaxland NSW 2750

Womens Gym Only - hydraulic resistance equip only

-30 min circuit program

Fitness on St Johns 72-78 St Johns Rd, Blaxland, NSW, 2774 (02) 47396531

- Cardio Gym -Group Fitness - Squash

-Wellness – Yoga -Martial Arts

Fitness First Penrith Unit 15 241 Mulgoa Road Penrith 2750

-Weights Gym - Cardio Gym - Group Fitness - Spin - Cafe -Play Zone (creche)

-Group Fitness – Body pump,lolite,Jam, Balance, Attack,Step,Combat, Fitball, Boxing -Spin RPM -Yoga, Pilates, massage - Fitness First Outdoor - FFIT Schools - Personal Training

Katoomba Sports & Aquatic Centre

Farnells Rd, Katoomba NSW 2780(02) 4782 1748

Outdoor: 50m Olympic Pool Shaded Toddlers Pool Program Pool Indoor: 25 m Pool Learn to swim classes Spa and sauna Multi-purpose Sports court Fully equipped fitness centre Group fitness room Child minding Kiosk Kids Kingdom - Indoor Play Structure Tumbling and Trampolining

-LTS (250+ cl;asses p/w -Group exercise includes Body Pump, Body Combat, Fat Burner, Aqua Aerobics, Strengthening for the over 60's. -Indoor sports, trampolining/ tumbling -Child Minding

Bodyfit Blaxland 72-78 St Johns Rd, Blaxland, NSW, 2774

- Weights Gym - Cardio Gym


NAME OF CENTRE LOCATION FACILITIES PROGRAMS & SERVICES PRICING - Group Fitness - Spin ?

Village Fitness Lvl2/ 98 Bathurst Rd Katoomba NSW 2780

-Heartmoves, -Tai Chi, -Stretch, -Posturecise

$8-12 p/v

Fernwood Penrith The Gateway Centre Shop 5, 191-199 High St Penrith NSW 2750 (02) 4722 5988

-Womens only Gym Motivators Luxurious Change Hairdryers Group Fitness Studio Weight Training Stretch Area Cardio Equipment Wide Screen DVD Circuit Free Parking Members Lounge Breakfast and Tea/Coffee Bar Towel Hire Complimentary Toiletries Gift Vouchers

-Personal Training -Weight Loss Centre -Complimentary Breakfast -Child Minding -Complimentary Toiletries -Group Personal Training -Endermologie

-Optional Payment Plans -Reciprocal Club Rights

World Gym 6 Peachtree Rd Penrith NSW 2750

-Weights Gym - Cardio Gym - Group Fitness - Spin - Retail

-Les Mills Programs -Fight Fit Extreme -Pilates

INDOOR CHILDRENS PLAY

CENTRES

Kids Kingdom –Katoomba Sports & Aquatic Centre

-3 story Indoor Climb frame, up to 12 yrs -Soft fall area for 0-3 yrs -Part of KSAC

Ad- $4.40 (incl. Coffee) Ch- $7.70

Kidz Club Playland Unit 23/46-48 Abel St Penrith

-Indoor Play Centre, jumping Castles, carousel, maze -Café

-Before & After School Care, -Vacation Care -Birthday Parties

Bithday Parties from $150


NAME OF CENTRE LOCATION FACILITIES PROGRAMS & SERVICES PRICING Lolly Pops 233 Mulgoa Road,

Penrith -Multi-purpose Rooms -Indoor Play Centre -Café

-School Holiday Programs -Themed Birthday Parties -Photography -Arts & Crfts -Disco Dances -Regular Displays/Shows

Birthday Parties from $179 (up to 8) -10 v/ pass $99 20 v/pass $179 Casual 1-2 yrs -$10.90 2-11 yrs $13.90 Ad $4.40

Monkey Mania Lot 2 Pattys Place PENRITH

-Multi-purpose Rooms -Indoor Play Centre -Cafe

-Themed Birthday Parties -Photography -Disco Dances -Regular Displays/Shows -Casual Childminding

1-3yrs $9.50 3+yrs $12.50 Ad $3.50 (incl. Coffee) 5 v/pass $46 Drop&Shop $25 (up to 3hrs) 50% off, after 4pm. Parties range $109-$419 (up to 8pp, 10 ad)


A review of the competitive environment indicates: There are relatively few health & fitness “full-service” competitors, offering a similar range of facilities, programs & services within the Lower Blue Mountains Primary Catchment area, Key competitors & associated services include:

- In the Lower Blue Mountains, BodyFit, Curves Blaxland, Fitness on St Johns - In Penrith Valley, Fitness First, World Gym & Fernwood

Most of the national & international “named” full-service health & fitness centres within the Penrith Valley, which may be appealing to Sydney work commuters. There is also a range of other health and fitness related services including: personal trainers and programs identified include a range of personal trainers, small Wellness Centres & community based programs for seniors (ie heartmoves, Alive Health & Wellbeing, Tai Chi, Gentle Exercise, social clubs etc) operating out of community-health centres. There are a large number of Indoor Children’s Play Centres, although a majority of these are located in the Penrith Valley. Key competitors & associated services include:

- In the Lower Blue Mountains, Katoomba Sports & Aquatic Centre, - In Penrith Valley, Kids Klub, Lolly Pops, Monkey Mania

There is also a range of other health and fitness related services including: personal trainers and programs identified include a range of personal trainers, small Wellness Centres & community based programs for seniors (ie heartmoves, Alive Health & Wellbeing, Tai Chi, Gentle Exercise, social clubs etc) operating out of community-health centres. 5 F U T U R E M A R K E T G R O W T H P O T E N T I A L

National Participation data and industry standards indicates, a growing trend of approximately 15-25%, of the population participate in health & fitness facility based activities (ie aerobics, cardio & weights training, wellness classes etc). Current and project population estimates of approximately 45,000 persons within the Lower Blue Mountains Area would see between 6,780 & 11,250 current & projected health & fitness participants. Given the number of health & fitness facilities, quality and capacities of existing facilities in the Blue Mountains area, and taking account of the market research results undertaken for the project which sees significant current (16% visit a health & fitness centre) and future potential market growth (12%) indicates significant opportunity to further develop health & fitness facilities in the Lower Blue Mountains area. 6 O R G A N I S A T I O N A L S T R U C T U R E & M A N A G E M E N T

BM Leisure Centres is a team unit of Council, within the BM City Services Business Unit. The Team manages the five Aquatic Leisure Centres and Swimming Pools owned and operated by Council, including:


Blackheath Pool (4 mth Summer Season) Katoomba Sport & Aquatic Centre (Year round) Lawson Swim Centre ( 6 mth Summer Season) Springwood Aquatic Centre (Year round) Glenbrook Swim Centre (9 month per Year)

With the exception of Squads Training which is contracted across the five centres, some Centre Kiosks (ie Glenbrook) and Learn to Swim programs all facilities & services are run by the BM Leisure Services Team. An organisational chart of BM Leisure Services team, roles & responsibilities is provided in the appendices. 7 S A L C F A C I L I T Y & O P E R A T I O N A L R E V I E W

This section provides an overview of the existing facilities, management & usage of the Springwood Aquatic Leisure Centre, and provides a base for future facility development & business planning. It includes, a review of the following:

Existing Facilities & Programs Site & Location Constraints & Opportunities Financial & Usage Trends CERM Results Review

7.1 EXISTING FACILITIES

The Springwood Aquatic Centre is located on Plateau Road, Springwood, backing onto Buttenshaw Park. The Centre was opened in August 2004 and replaced the previously existing Springwood outdoor pool. Other recreational facilities within the vicinity of the Centre, within the park, include 2 outdoor tennis courts (to be upgraded, budgeted 2009-10) and an outdoor playground. 1 Facility Components The Springwood Aquatic and Fitness Centre offers the following key facility components: Aquatics

- Indoor 8 lane, 25 metre pool - Full program pool with ramp access - Leisure pool with children's beach area, huge waterslide and turbo pool - Spa, sauna and steam room

Health & Fitness

- Fully equipt cardio & weights centre (approx. 190 sqm) - Group fitness room (approx. 150 sqm, 250 sqm when childminding area available) - Child minding room (adjoining/part of group fitness room)

Ancilliary Facilities

- Café - Small retail area - Entry/reception/administration - Carparking


2 Programs & services Current programs & services offered by the centre include:

- Personal Programming - Weights Training & Circuit, - 52 x Group Fitness & Cardio Classes (Les Mills,) - 8 x Aqua Aerobics - Learn to Swim - Squad Training - Child Minding - Birthday Parties

3 Opening & Operational Hours The centre is open All year round except Good Friday and Christmas Day, closes at 5:00pm on Christmas Eve and New Year's Eve and opens at midday on ANZAC Day. Operating hours vary by facility component, but are largely between 6.00 am to 7.00pm in winter & 6.00am to 8-8.30 pm in summer across the centre.

7.2 FINANCIAL REVIEW

This section summaries the financial performance of each of the Springwood Aquatic Leisure Centre over the preceding two financial years to 2008-09. The key findings of this review will be used as a base for future business planning & analysis of potential development options. Centre Management has provided the 2007/08 and the 2008/09 budget results and these have been summarised in the table below. A detailed budget can be found

AREA 2008/09 BUDGET ACTUALS $’000

2007/08 BUDGET ACTUALS $’000

Income 2,443,826 2,306,454 Expenditure 2,474,867 2,358,697 Net Surplus/(Loss) (31,041) (52,243) Service Level Agreement Income 201,597 180,574

Operational Cost to Council Including SLA (232,638) (232,817)

The review of SALC budget indicates:

The centre operates at a small operational loss of between $30-53,000 inclusive of Service Level Agreement Income.

Council subsidises the operations of the centre by approximately $232,000 per

annum, including Service Level Agreement Centre income. The SLA income represented 8.25% of total Centre income in 2008/09.

Between 2007 and 2009 income grew by $137,000 or 5.9% and expenditure grew

by 4.9%. Based on the 2007/09 financial year results the key business indicators are:


INDICATOR 2008/09 2007/08 Total Attendance 273,292 253,266 Total Revenue 2,443,826 2,306,454 Revenues Excluding SLA 2,242,229 2,053,188 Total Expenditure 2,474,876 2,358,697 Nett Profit/(Loss) (31,041) (52,243) Avg. Revenue Per User $8.94 $9.11 Avg. Expenditure Per User $9.06 $9.31 Nett Profit/(Loss) Per User ($0.12) ($0.20) Revenues as % return Operational Expenditure 99% 98% Revenues as % return operational expenditure Excl. SLA 91% 90%

The business indicator review indicates that although the centre is high levels of income per user visit above industry averages for similar centres (ie $5-6 per visit), even when the SLA is excluded, centre expenditure is well above industry averages, indicating the centre is already yielding income per user at higher than industry rates and therefore future strategies will need to be aimed at:

increasing the number of users improved cost control and greater efficiency as user numbers increase increasing revenues at a greater rate than expenditures

Key areas of high expenditure in comparison in industry averages are as follows:

salaries & wages (approx 65% total expenditure & revenues) operational costs (predominantly energy cost. Approx 8.3% total expenditure) kiosk & retail sales (eg. kiosk losses $51,770 or 23% of revenues in 2008/09,

compared to industry average profit margin of 25-30% of sales. Similarly retail sales only $0.20 cents per visit, compared to industry average of $0.60-0.70 cents per visit).

Whilst some measures can be taken to reduce energy consumption through more sustainable practices & new technologies etc a key determinant of energy consumption is facility design, which is difficult to mitigate once built. The largest area of expenditure & area of cost control likely to have the biggest impact on future operational performance is staffing.

7.2.1 SALC Health & Fitness Area Budget Review

A detailed budget and breakdown by health & fitness business area can be found in the following table:

HEALTH & FITNESS AREA 2008/09 BUDGET ACTUALS $’000


Income Memberships 412,121 413,281 Aerobics Casual User Fees 35,881 74,552 Gym Casual User Fees 80,752 56,814 Direct Debit (Ezypay) 365,814 372,172 Subtotal Total Health & Fitness Income 894,658 916,819

Less 30% Membership Distribution to Aquatics 233,380 235,282

Total Health & Fitness Income 661,278 681,537 Expenditure Direct

Salaries & Wages- Fitness 232,808 232,631


HEALTH & FITNESS AREA 2008/09 BUDGET ACTUALS $’000


Salaries & Wages- Group 141,997 174,551 Licences 29,066 32,671 Sub-total Direct Expenditure 403,871 439,853

Distributed Expenditure 10% Salaries & Wages-Centre Admin 9,641 7,580

30% Salaries & Wages- Reception/Retail 69,578 73,856

10% Administration 10,144 8,254 10% Operations 20,381 23,500 10% Repairs & Maintenance 15,400 17,200 Sub-Total Distributed Expenditure 125,144 130,390

Total Expenditure 529,015 570,243 Nett Operational Surplus/(Loss) 132,263 111,294

The operational budget review indicates:

Operational surpluses have improved 2007-2009 by 19% or $21,000 Total revenues decreased 10% in 2008/09, compared to the previous year. Average income per member (avg.1,200) is $453 per annum (excl. casual

income). In 2008/09 Membership income represented approximately 82% of total

revenues, a slight increase on the previous year. Salaries & wages (57%) represent a much higher % of income compared to

industry business performance indicator benchmarks of 25-30% Gym salary per member per month ($37.75) is lower than industry business

performance indicator benchmarks, of a minimum of $40 per month. Overall, the Health & Fitness business is profitable, however, compared to industry averages, the area is achieving a lower return on investment than comparable centres. Based on 2008/09 results, the Health & Fitness area is achieving a 125% return on expenditure, in comparison to industry standards, this is at the lower end of industry standards (125-180%). Future strategies will need to address:

cost structures, particularly staffing, membership pricing, and usage

7.2.2 SALC PRICING REVIEW

This section provides a review of SALC fees & charges for membership & casual entry, which will be used as a base for further more detailed business planning. The 2009/10 fees & charges for SALC Memberships and Casual Entry are provided in the following figures. The figures have been sourced directly from the SALC brochures. Membership Categories are: Gold – allows access to all Blue Mountains Leisure Centres Silver – allows access to SALC and Katoomba Aquatic Leisure Centre Bronze – allows access to all outdoor aquatic centres only


2009 - 2010 MEMBERSHIP PRICE SCHEDULE

2009-2010 CASUAL PRICE SCHEDULE


When compared to other similar facilities and competitors in the area the fees and charges are at the lower end of the price range expected for the current mix and standard of facilities provided. Future pricing strategies to consider include:

o Entry & membership price Increases o Peak & Off-Peak timing o SALC membership only pricing

It will be difficult to increase pricing, under current circumstances, due to the capacity constraints of the centre and the obvious impact it is having on user experiences, visitation & membership sales. The addition of new improved health & fitness facilities and services would offer an opportunity to introduce a new pricing structure, as customers can see direct benefit of the new facilities.

7.3 USAGE REVIEW

The centre aquatic and health and fitness operations have excellent records of usage broken up into the key areas of:

- Total Centre - Fitness, including Group & Fitness usage - Aquatic, including Swim & Learn to Swim - Memberships by type, including centre, fitness, wet areas & swim

The annual attendance review based on centre management data, for the last 5 years is detailed as follows:

2008/09: 273,792 2007/08: 253,266 2006/07: 287,768 2005/06: 220,014 2004/05: 185,756

The annual attendance review indicates the centre has expanded its usage annually from a low of approximately 185,000 in 2004/05 (opening year) to a high of 287,768 in 2007. This was an increase of 102,768 or a 55% increase over its first three years of operation. The centre visitation has since declined and improved in 2009, seeing a 47% increase on 2004-05 visits. A breakdown of annual usage by attendance category is provided below in the following table.

YEAR TOTAL

ATTENDANCE (VISITS)

FITNESS VISITS GROUP FITNESS AQUATIC LEARN TO SWIM

2004/05 185,756 39,460 39,784 99,626 6,886 2005/06 220,014 44,835 48,216 102,699 24,264 2006/07 287,768 52,852 54,821 118,612 61,398 2007/08 253,266 48,797 46,343 107,070 51,056 2008/09 273,792 46,990 44,211 111,301 71,290

% change between 04/05 to 08/09 + 47% +20% +11% +12% + 9 times

The breakdown indicates:


Significant growth across the centre and in all program areas. High growth in Learn to Swim, more than 9 times opening year attendances, to

71,290 visits and accounting for 26% of total centre visits. Significant growth in Fitness Visits, up 20% to 46,990 visits and accounting for

17% of total centre visits. Marginal growth in both aquatic (+12%) and Group Fitness (+11%) respectively,

with aquatics representing approximately 40% of centre visitation and group fitness representing 16%.

Both Fitness & Group Fitness have experienced much higher attendance, peaking in 2006/07, but have since declined. Centre management have indicated, and supported by market research & consultation undertaken for the project, that this is largely due to overcrowding and the implementation of program changes to try and manage demand for health & fitness programs.

7.3.1 SALC Membership Review

A review of centre memberships indicates total centre memberships increased annually, since opening in 2004/05, but declined slightly(5.5%) in 2008/09. Memberships vary from month to month. Average annual total centre memberships, for the last five years are detailed below:

2008/09: 1,664 2007/08: 1,761 2006/07: 1,717 2005/06: 1,582 2004/05: 1,258

Membership trends have varied across the member type categories. A breakdown of annual average membership by category is provided in the following table.

YEAR TOTAL Membership FULL CENTRE FITNESS WET AREA SWIM FAMILY

2004/05 1,258 807 288 111 52 2005/06 1,582 895 508 124 55 2006/07 1,717 546 703 70 136 229 2007/08 1,761 491 780 88 196 200 2008/09 1,664 390 801 107 186 178

% change between 04/05

to 08/09 + 40% -51% +178% +/-0% + 2.5 times

-22% (06-09)

The review of membership trends indicated the following: Total average centre memberships have increased 40% over the five years to 2009, although the mix has changed, with more Health & Fitness memberships only & less Full Centre memberships. Swim & Family memberships have also increased, with the later only being introduced in 2007. In 2009, approximately half (48%) of memberships were Health & Fitness Memberships Only, one quarter (23%) were full memberships and approximately 11% were Swim and Family memberships.


Weekly visitation based on 2009 Health & Fitness usage and excluding 10% allowance for casual visits, Health & Fitness member visits per week is in the order of 2 visits per week. Industry Comparisons Recent CERM performance data (april 2008) indicates visits per head of catchment population is 18.2 visits per head of population compared to 5.8 across the CERM Comparable Group, however this is based on a catchment population of 15,893. Based on the Lower Blue Mountains Catchment area population of approximately 45,000 persons, and 289,993 visits (as detailed in CERM report) this would see a more comparative visit rate of 6.44 v/per head of population. A larger catchment zone of the Lower Blue Mountains is supported by market research undertaken for this project, centre management membership data and the CERM survey results.

7.3.2 SALC Group Fitness Program Review

To fully understand the operations of the Health & Fitness Centre, the consultant team undertook a detailed review of the weights/cardio and group programs & area capacities. Group Fitness The group programs review indicates the group fitness area is operating at reasonable capacity levels during peak times as detailed below:

71% capacity in AM peak times 60% capacity at PM peak times

These capacity results change only slightly when Off-Peak programs are included, due to the small number of programs offered in Off-Peak times, as detailed below:

69% capacity during AM operating hours 61% capacity during PM operating hours

Approximately one third of AM classes (11 out of 33) operating at or near capacity (+80%) and one in five PM classes (5 out of 24) operating at near or over capacity, with potential participants being turned away (up to 5 per session) at these times.

7.3.3 SALC Weights/Cardio Capacity Review

One of the commonly applied industry indicators for measuring capacity of health & fitness centres is number of members (5-6 members per sqm) per sq m of weights/cardio floor space. In 2008/09 the Centre had approximately 1,200 members (including approx. 800 health & fitness only members and 390 full centre members). The Centre is at or near capacity in comparison to industry indicators, which indicate a membership base range of 960 to 1140 members, based on a weights floor area of 160-190 sq m (when pool deck stretch area taken into account). These usage and membership numbers indicate centre management is maximising membership levels & encouraging high use by offering high take up programs during peak times. Whilst, there is capacity to improve usage of existing programs, there are minimal timeslots available to offer new programs, or options to increase capacity of high use


programs to try and meet extra user demand during peak times, within the constraints of the existing facility. Future strategies & options to manage demand may include:

Pricing strategy(higher &/or peak-non peak fee) & usage policies (first in, first served);

Re-configure and undertake minor facility upgrades to improve the efficiency & capacities of the existing floor space (ie providing storage, re-configuring equiptment & rooms, where possible providing separate spin, cardio-stretch area)

Re-develop centre to provide expanded health & fitness facilities and capture new members

7.4 SITE REVIEW

Whilst the location of the centre within an established parkland provides an pleasant and atmospheric backdrop to the centre, it has proposed significant constraints to the centres future development & operations,. Key issues for future consideration include:

Location within residential zone & proximity to neighbouring houses, Access & car parking, Environmental/Heritage place impact & encroachment of public parklands.

The SALC is classified Public Recreation Reserve and located within “Recreational – Open Space” Zone. The purposes of the zone are: (a) To provide for active recreational requirements of the City. (b) To ensure that recreational development is environmentally sensitive and site responsive. Further development of Recreation Facilities & Car parking within the zone is allowed subject to Development Application conditions and approval, and submission of land use and design plans to the Department of Lands for approval. Buttenshaw Park is subject to Heritage LEP Conditions. A map of the area, indicating zones & LEP particulars is provided below.


Source: Council agenda 1 April 2008 In 2006, Council commissioned traffic, car parking and noise studies into SALC. The following conclusions were made, as summarised in Council agenda of the 1 April 2008.

Peak usage times result in car parking occupancy rates of 90-100% on-site and up to 30-40 cars on-street (some residential).

The peak-use periods coincide with organised activities at the SAFC. Such

organised activities have a greater impact on car parking usage than the casual user of the SAFC’s facilities.

There is under-utilisation of the on-site car parking at the SAFC, particularly in

the car park to the side of the SAFC. If the utilisation of the side car park could be increased it would slightly reduce the level of on-street parking at these


times. However the current level of on-street parking will generally continue because of convenience to the SAFC’s access.

The report identified, seven expanded car park layout options were and investigated for feasibility to increase off-street car parking at the SAFC. Council officer’s recommended not to fund and construct an expanded car park, however, indicated Option C would be a preferred arrangement should car expansion be warranted in the future. Option C is illustrated below:

The preliminary site review indicate, future development is permissible and there is sufficient land to allow a small future expansion of the facility, however, there are a number of site constraints, However, the main issue of concern is car-parking, street traffic and neighbour effects (noise & lighting), that will need to be considered as part of future design & development phases. Council has previously addressed neighbourhood effects, through operating hours & programming and identified a range of feasible car parking & traffic options to address car parking & access, which will need to be considered as part of future development strategy. 8 G L E N B R O O K F A C I L I T Y & O P E R A T I O N A L R E V I E W

This section provides an overview of the existing facilities, management & usage of the Glenbrook Aquatic Centre, and provides a base for future facility development & business planning. It includes, a review of the following:

Existing Facilities & Programs


Financial & Usage Trends CERM Results Review

8.1 EXISTING FACILITIES

The Glenbrook Aquatic Centre is located on Corner Fletcher and Wascoe Streets, Glenbrook. The Centre was opened in 1980. 1 Facility Components The Centre offers the following key facility components: Aquatics

- Heated 50 metre Olympic pool - Shaded Program Pool - Shaded Toddlers Pool - Outdoor Open space - Playground equipment

Ancilliary Facilities

- Kiosk - Small meeting room/storage area - Entry/Admin - Carparking

2 Programs & services Current programs & services offered by the centre include:

- Learn to Swim - Squad Training - Outdoor Exercise Program – Aqua Aerobics, Pilates and Boot Camp

3 Opening & Operational Hours The centre is open seasonally, 9 months of the year and with the exception of Good Friday and Christmas Day. It also closes at 5:00pm on Christmas Eve and New Year's Eve and opens at midday on ANZAC Day. Operating hours vary over the season, but are largely between 6.00am and 8.00pm dependent on the pre-post or summer season timing, with a half day operations in the pre-post winter period of 8.00am to 12.00 pm.

8.2 USAGE REVIEW

General visitation data records have been provided for Glenbrook Aquatic Centre for the last five years as detailed as follows:

2008/09: 81,758 (9 Month Operations, avg. visits 9,084 p/mth) 2007/08: 91,371 (9 Month Operations, avg. visits 10,152 p/mth) 2006/07: 68,233 (10 Month Operations, avg. visits 6,823 p/mth) 2005/06: 83,706 (10 month Operations, avg visits 8,370 p/mth) 2004/05: 90,704 (All Year round Operations, avg visits 7,558 p/mth)


Visitation has varied over the five year period, reflective of the changing operational hours and variability of outdoor pools inline with climatic conditions. Average per month visitation has increased over the period, peaking in the 2007/08 year. Based on ABS 2006 catchment population of 17,623 pp, within a 5km, this sees an avg. visitation rate of 4.6 visits per head of population in the four years to 2008/09, which is well above the CERM industry standard of 1.8 for similar facility types. This high visitation rate was reflected in the level of program delivery, cost recovery & income per visit results for the Centre in the 2007 CERM Survey results, which were all above industry averages for similar centres.

8.3 FINANCIAL REVIEW

This section summaries the financial performance of each of the Glenbrook Aquatic Centre over the preceding two financial years to 2008-09. The key findings of this review will be used as a base for future business planning & analysis of potential development options. Centre Management has provided the 2007/08 and the 2008/09 budget results and these have been summarised in the table below. A detailed budget can be found

AREA 2008/09 BUDGET ACTUALS $’000


Income 443726 458058 Expenditure 515,646 521,072 Net Surplus/(Loss) (71,920) (63,014) Service Level Agreement Income 117,598 112,679

Operational Cost to Council Including SLA (189,518) (175,693)

The review of Glenbrook Aquatic Centre budget indicates:

The centre operates at an operational loss of between $60-70,000 inclusive of Service Level Agreement Income.

In 2008/09, Council subsidised the operations of the centre by approximately

$190,000 per annum, including Service Level Agreement Centre income. The SLA income represents 27% of total Centre revenues.

Between 2007 and 2009 income decreased slightly by approximately $14,000 or

3% and expenditure also decreased by 1%. Based on the 2007/09 financial year results the key business indicators are:

INDICATOR 2008/09 2007/08 Total Attendance 81,758 91,371 Total Revenue 443726 458,058 Revenues Excluding SLA 326,128 345,379 Total Expenditure 515,646 521,072 Nett Profit/(Loss) (71,920) (63,014) Avg. Revenue Per User $5,43 $5.01 Avg. Expenditure Per User $6.30 $5.70 Nett Profit/(Loss) Per User ($0.88) ($0.69) Revenues as % return Operational Expenditure 86% 88% Revenues as % return operational expenditure Excl. SLA 63% 66%


The business indicator review indicates the centre is achieving high levels of income per user visit above industry averages for similar centres (ie $2-3 per visit), and cost recovery (ie 47%), even when the SLA income is excluded, centre expenditure is well above industry averages, therefore future strategies will need to be aimed at:

increasing the number of users improved cost control and greater efficiency as user numbers increase increasing revenues at a greater rate than expenditures, though addition of

high yield components

9 M A R K E T R E S E A R C H & C O N S U L T A T I O N

This Section summarises the market research & consultation undertaken for the project. It includes the results and findings from the following research & consultation mechanisms undertaken for the project:

Household Survey Existing User Surveys Focus Group Sessions Stakeholder Interviews Written Submissions

More detailed results can be found in Appendices. 9.1 HOUSEHOLD SURVEY

This section summarises the key findings from the resident household telephone survey, conducted in October 2009. The survey was commissioned by the Blue Mountains City Council and undertaken by Fieldworks Market Research, under the direction of the SGL Consulting Group. A sample of 201 randomly selected residents, were interviewed by telephone survey to provide an independent sample of people from the Lower Blue Mountains areas of Lapstone, Glenbrook, Blaxland, East Blaxland, Hawkesbury Heights, Hazelbrook, Linden, Springwood, Sun Valley, Warrimoo, Winmalee, Woodford and Yellowrock. There are approximately 42,979 residents (ABS 2006) in this area. They were asked to provide information about current and future aquatic, health and fitness and children’s facilities and services. The survey data and population sample has been weighted by age and gender within each planning area to represent as close as possible actual population distribution across the municipality. Due to the complexity of the survey questions and Institute of Market Research ethical guidelines, survey involvement was limited to people aged 15 years or over. The aim of the survey was to identify residents:

Use of aquatic, health and fitness and children’s facilities. Constraints to use of aquatic and health and fitness facilities. Frequency of use of aquatic and health and fitness and children’s facilities. Potential number of people interested in making more use of aquatic and

health and fitness and children’s facilities.


Priority aquatic and health and fitness and children’s facility developments that would encourage future use.

The questions were based on a range of aquatic participation surveys completed by SGL Consulting Group over the last five years in NSW and Victoria which allows SGL to compare the results of the survey, with results of other similar areas.

9.1.1 Respondent Sample

The table on the following page summarises the Resident Household Telephone Survey respondent sample:

Table 9.1 Resident Household Telephone Survey Respondent Sample

CATEGORY SUB-GROUP NUMBER PERCENT %

Gender Male 98 49 Female 103 51 Age Range 15-19 years 26 13 20 - 29 years 18 9 30 - 39 years 36 18 40-49 years 35 17 50-59 years 38 19 60-69 years 27 13 70 years plus 21 10 Total 201 100%

Breakdown by postcode Blaxland, East Blaxland, Warrimoo, Mount Riverview 2774 53 26

Faulconbridge 2786 1 0

Glenbrook, Lapstone 2773 28 13

Hawkesbury Hgts, Springwood, Sun Valley, Winmalee, Yellowrock 2777 86 42

Hazelbrook 2779 19 9

Linden, Woodford 2778 13 6

TOTAL: 201 100%

AREA 1 Hazelbrook, Woodford, Linden,

Faulconbridge 33 16.4

AREA 2 Springwood, Winmalee, sun Valley, Valley Hgts, Yellowbrook 78 38.8

AREA 3 Warrimoo, East Blaxland, Blaxland, Glenbrook, Lapstone 72 35.8

A review of the survey respondent sample profiles indicates: Gender The female to male response represents a slightly higher female response corresponding with the demographic profile of the Municipality (Females 51%, Males 48%). Area of residence Respondents come from approximately 16 different suburbs across the Lower Blue Mountains area. Age profiles


Approximately 40% of respondents are aged 15 to 39 years (the most active ages). There are approximately 36% of respondents aged 40 to 59 years and approximately 23% of respondents aged 60 years or greater. These age category percentages represent a reasonable sample across all age groups.

9.1.2 Current Use Of Pools & Leisure Centres

Survey respondents were questioned on their use of public swimming pools/leisure centres in the past 12 months. Public swimming pools/leisure centres included Council, school and commercial centres, but not home pools. A high use of swimming pools by people in the lower Blue Mountains area was identified through the survey responses. A total of 130 (65%) of people had used or visited a pool in the past 12 months. A total of 71 or (35%) had not used or visited a pool in the past 12 months. These results are at the higher end use of swimming pools/leisure centres by survey respondents compared to other Council areas, with similar leisure infrastructure and access surveyed by SGL in metropolitan Australia.

9.1.3 Aquatic Participation Comparisons

Similar surveys conducted by SGL Consulting Group in metropolitan & regional Australia, indicates the Blue Mountains area pool usage rates (65%) are in the higher than average use category when compared to other regions with similar aquatic infrastructure. The aquatic participation survey comparisons on swimming pool usage are as follows:

Table 9.2 Comparisons of Swimming Pool Usage

for Range of Australian Metropolitan & Regional Areas

SURVEY AREA

USED OR NOT USED

Baulkham Hills Shire Council

2006 (Sample

400)

Parramatta City

Council 2005

(Sample 400)

Bankstown City

Council 2004

(Sample 400)

South Eastern Suburbs Sydney

2007 (Sample

400)

Sydney Western Metro Area 1999

(Sample 1200)

Warringah Council

2008 (Sample

400)

Albury City

Council 2006

(Sample 400)

Melb. Northern

Metro Region

Average 2006

(Sample 1000)

Northern Shoalhaven

(Nowra) 2008

(Sample 300)

Ashfield Council Average

2009 (Sample

300)

Used a swimming

pool/leisure Centre in past 12 months

33% 37.0% 42.0% 44.0% 49.0% 51.0% 49.0% 51.0% 53.0% 50.0%

Not used a swimming

pool/leisure Centre

in past 12 months

67% 63.0% 58.0% 50.0% 51.0% 49.0% 51.0% 49.0% 47.0% 50.0%

The results indicate the higher than average pool use in the Blue Mountains than seen in the South Eastern & Western Sydney Metropolitan area, and Northern Melbourne Metropolitan area, as well as selected urban rural communities that have been surveyed by SGL in the last five years (Western Sydney excluded).


The comparisons indicate use of swimming pools by Blue Mountains household survey respondents is higher to other areas of metropolitan Australia, with significant indoor facilities and reflects the level of facilities and services provided. Industry trends indicate 60-70% is the maximum percentage of the population likely to use public swimming pools/leisure centres. The profile of these areas is usually characteristic of the Blue Mountains, aquatic infrastructure is substantial and/or recreational opportunities and access to the beach is limited.

9.1.4 Most Popular Swimming Pools

Catchment resident’s use of swimming pools is spread over a number of different facilities in the region. Respondents who had used a swimming pool in the past 12 months listed 6 different facilities they had used. Of a possible 6 facilities identified in the catchment area that respondents could use, all facilities were indicated as used by Blue Mountain area residents. A summary of the most popular pools used, compared to the pool people nominated as the one they use the most, is detailed in the following table:

Table 9.3 Most Popular Swimming Pools

SWIMMING POOL SWIMMING POOLS USED IN PAST 12 MONTHS (MULTIPLE ANSWERS)

SWIMMING POOLS USED MOST IN PAST 12 MONTHS (SINGLE ANSWER)

Springwood Aquatic and Fitness Centre

84% 68%

Glenbrook Swim Centre 33% 20%

Lawson Swim Centre 8% 6%

Katoomba Sport and Aquatic Centre

8% 2%

Penrith Pool 4% 2%

Blackheath Pool 1% 1%

Other 3% 2% The most popular and most used pools results indicate: Springwood Aquatic and Fitness Centre is the most used (84%) facility used by residents in

the last 12 months and the most popular (68%). Glenbrook Swim Centre is the next most used (33%) facility and most popular (20%),

followed by Lawson Swim Centre and Katoomba Sport and Aquatic Centre (both 8%), the next most popular (6% and 2%).

Penrith Pool Centre (4%) is out of the Council’s area, but was the next most used pool and next most popular (2%), followed by Blackheath Pool (1% and 1%).

9.1.5 Use of Pools by Gender

The usage of pools by gender also indicates differences in pool choice, as the following results indicate:


Table 9.4

Use of pools by Gender

Swimming Pool Total Sample Male Usage Female Usage Springwood Aquatic & Fitness Centre 84% 90% 78% Glenbrook Swim Centre 33% 30% 36% Lawson Swim Centre 8% 5% 12% Katoomba Sports & Aquatic Centre 8% 8% 7% Penrith Pool 4% 5% 3% Blackheath Pool 1% - 1%

The results indicate: Males make slightly more use of Springwood Aquatic and Fitness Centre (+6%) which goes

against the industry norm. Females make slightly more use (+3% & +4%) of Glenbrook and Lawson Swim Centres

whereas males made average use, but slightly more use of Katoomba Sports & Aquatic Centre.

9.1.6 Use of Pools by Age

The usage of pools by age also indicates differences in pool choice, as the following results indicate:

Table 9.5 Use of pools by Age

Swimming Pool Total Sample

15-29yrs 30-49yrs 50+yrs

Springwood Aquatic & Fitness Centre

84% 76% 90% 81%

Glenbrook Swim Centre

33% 39% 39% 17%

Lawson Swim Centre 8% 9% 11% 3% Katoomba Sports & Aquatic Centre

8% 6% 7% 11%

Penrith Pool 4% 3% 3% 6% Blackheath Pool 1% - - 3%

The review of use of pools by age indicates: All age groups use Springwood Aquatic and Fitness Centre, with much higher than area

average (90%) use of by people aged 30-49 years (+6%) and less than average use by people aged 15-29 years and 50+ years (-8% and -3% respectively).

Above average use (39%) by people aged 15-49 years (+6% respectively) of Glenbrook

Swim Centre, and very low usage by people aged 50+years (17%).

9.1.7 Rating of Current Pools & Services

Those respondents who had used Springwood Aquatic and Leisure Centre in the last 12 months were asked to rate the existing facilities and services.


Springwood Aquatic Leisure Centre Overall, those respondents that used Springwood Aquatic and Leisure Centre indicated they were happy with existing facilities & services with 86% of respondents indicating the facilities were Good or Excellent. Only a very small percentage (2%) indicated the existing facilities were poor, as the following details:

Excellent 30% Good 56% Adequate 11% Poor 2% Very Poor 1%

Respondents who had used Springwood Aquatic and Leisure Centre were also asked to indicate what facilities and services they were particularly unhappy with. Survey respondents indicated a vast range of reasons. The most popular reasons were:

Table 9.6

Reason for being unhappy with facility – Springwood Centre Reason % Average %

Costs too much (lifeguards, reception,kiosk)

25% 22%

Size/layout/design of facility 17% 17% Unsatisfactory staff (reception/kiosk) 17% 17% Water temperature of pools 8% 17% Length of opening hours - 6% Too crowded 8% 6% Condition/cleanliness of change room and toilets

8% 6%

Water based programs 8% 6% No heated program/hydrotherapy pool - 6% Not enough pools/water areas 8% 6% Other issues 17% 17%

The results indicate the main facility features or services existing users are unhappy with are: “costs too much to use”, the “size/layout/design of the facility”, unsatisfactory staff” and the “water temperature of the pools”. Those respondents who had used Springwood Aquatic and Leisure Centre in the last 12 months were asked to rate the existing facilities and services.

Glenbrook Aquatic Centre Those respondents that used Glenbrook Swim Centre indicated they were happy with existing facilities & services with 92% of respondents indicating the facilities were Good or Excellent. Only a very small percentage (4%) indicated the existing facilities were poor, as the following details: Excellent 19% Good 73% Adequate 4% Poor 4% Very Poor 0%


Respondents who had used Glenbrook Swim Centre were also asked to indicate what facilities and services they were particularly unhappy with. Survey respondents indicated a vast range of reasons. The most popular reasons were:

Table 9.7 Reason for being unhappy with facility – Glenbrook Centre

Reason % % average Costs too much (lifeguards, reception,kiosk)

- 22%

Size/layout/design of facility - 17% Unsatisfactory staff (reception/kiosk) 50% 17% Water temperature of pools 50% 17% Length of opening hours - 6% Too crowded - 6% Condition/cleanliness of change room and toilets

- 6%

Water based programs - 6% No heated program/hydrotherapy pool - 6% Not enough pools/water areas - 6% Other issues - 17%

The results indicate the only two facility features or services existing users are unhappy with are: unsatisfactory staff” and the “water temperature of the pools”.

9.1.8 Main Activities That Attract Users

To provide a guide to the main activities that attract user’s at the most popular pools people use, the following profile data was identified:

Table 9.8 Main Activities that Attract Users to pools

MAIN ACTIVITIES PEOPLE PARTICIPATE IN

Activity Males Females

15-29 yrs 30-49 yrs 50+yrs

Lap Swim/Fitness 50% 52% 48% 52% 48% 53%

Recreation swimming/fun 31% 28% 33% 45% 28% 22%

Take child to pool 31% 26% 35% 9% 44% 28% Use Gym/weights 10 % 13% 7% 21% 3% 11%

Spa/sauna 8% 11% 6% 9% 5% 14%

Health & fitness programs/classes 8% 3% 12% 3% 13% 3%

Aquaerobics 6% 5% 7% - - 22%

Take part in aquatic program 5% 3% 7% 3% 10% -

The results indicate: Half of all users (50%) are attracted for Lap swimming and Fitness activities; Approximately one third of users (31%) are also attracted for Leisure/fun, recreation

swimming and another third (31%) take a child to the pool.


Approximately 10% of people take part in Dry Health & Fitness programs and 19% in Aquatic Health and Fitness programs.

Minority activities, including sunbathing, cooling down from hot weather and

rehabilitation programs (1-2%).

9.1.9 Member Of/Use A Health & Fitness Club Or Gym

Survey respondents were asked to indicate if they were currently a member of/or had used a local Health, Fitness or Wellness centre or Gym in the last 12 months. Health, fitness and wellness centres included council and commercial centres and programs, but not home gyms etc A total of 16% indicated they were a member of a local health and fitness establishment, whilst 84% of respondents were not. These results indicate lower member/usage rates than other regional & sub-regional areas when compared to participation rates found by SGL in conducting similar surveys in other areas over the last 2 years, as the following table indicates:

Table 9.9 Comparisons of Health & Fitness Centre Usage

for Range of Australian Sub-Metro & Regional Areas

Council Area USED OR NOT USED Maitland

City Council 2008

(Sample 400)

Warringah Council

2008 (Sample 400)

Blue Mountains 2009

(sample 300)

Ashfield City Council 2009 (Sample 300)

Southern Shoalhaven

2010 (Sample 300)

Used a Health & Fitness Centre in past 12 months

18% 32.0% 16% 26.0% 11.0%

Not used a Health & Fitness Centre in past 12 months

82% 68.0% 84% 74.0% 89.0%

9.1.10 Member Profile of Health and Fitness Club or Wellness Centre

Current membership of health and fitness/wellness centres changes by gender, age profile as the following results indicate:

Table 9.10 Membership of Health and Fitness/Wellness Centre Variances Against Sample Average (16%

used: 84% Not used) CATEGORY SUB-GROUP % MEMBER OF CENTRE

(16% Average) VARIANCE

AGAINST AVERAGE (%)

% NOT MEMBER OF CENTRE/

(84% Average) Gender Male 14% -2% 86%

Female 18% +2% 82%

Age Range 15-29 years 16% 0% 84%

30-49 years 17% +1% 83%

50+ years 16% 0% 83%


The results indicate: Females (18%) make slightly higher use of Health and Fitness/ Wellness centres

than males (14%). SGL has found females are generally higher users of health, fitness and wellness centres than males.

People in the 30-49 years old age group (17%) make slightly higher use of health &

fitness facilities.

9.1.11 Most Popular Health And Fitness/ Wellness Centres

Lower Blue Mountain’s resident’s use of health, fitness & wellness centres is spread over a small number of different facilities in the region. A summary of the most popular centres used, compared to the centre people nominated as the one they use the most, is detailed in the following table:

Table 9.8 Most Popular Centres

CENTRES CENTRES USED IN PAST 12 MONTHS (MULTIPLE ANSWERS)

CENTRES USED MOST IN PAST 12 MONTHS (SINGLE ANSWER)

Springwood Aquatic & Fitness Centre 27% 21%

Bodyfit Blaxland 15% 15%

Curves Blaxland 12% 12%

Fitness on St Johns 9% 9%

Fitness First Penrith 9% 9%

Curves Springwood 6% 6%

Katoomba Sports & Aquatic Centre 3% 3%

Other Centre 24% 24%

Of those who had used a local Heath & Fitness facility in the last 12 months, the most popular and most used health & fitness clubs were:

Springwood Aquatic and Fitness Centre 27% (most used 21%) Bodyfit Blaxland 15% Curves Blaxland 12% Fitness on St Johns 9% Fitness First Penrith 9% Other Centres 24%

The results indicate Springwood Aquatic & Fitness Centre has the largest market share and that most people who use centres predominantly use the one centre, unlike aquatics where people are more likely to use multiple centres. (ie member based industry).

9.1.12 Rating Of Current Health & Fitness Centres

Those respondents who are a member of or had used a health and fitness/ wellness centre in the last 12 months were asked to rate the existing facilities and services. Overall, those respondents who had visited or used a centre in the last 12 months indicated they were happy with existing facilities & services with 88% of respondents indicating the facilities were Good or Excellent. A small percentage (12%) indicated the existing facilities were adequate, as the following details:


Good 52% Excellent 36% Adequate 12%

No respondent rated current facilities as poor. A review of the detailed centre results indicate nearly half of current users rated Springwood Aquatic and Fitness Centre, Curves Blaxland and Katoomba Sports and Aquatic Centre rated as excellent by between 43% and 50% of respondents. Those rated as good, included Springwood Aquatic and Fitness Centre, Curves Springwood, Curves Blaxland and Fitness First Penrith, by between 50% to 100% of respondents.

9.1.13 Facilities or services respondents are dissatisfied with

Respondents who had used health and fitness facilities were also asked to indicate what facilities and services they were particularly unhappy with. Survey respondents indicated only a small range of reasons. The survey had asked a range of question relating to cleanliness, facility location, car parking, opening hours, disabled access, social and food facilities, crèche facilities, cost and staff. The pre-dominant reasons for dissatisfaction were Size/Layout/Design of Facility (50%) and Overcrowding (25%). However, overall there were minimal complaints about the current health and fitness facilities.

9.1.14 Health And Fitness/ Wellness Centre User Profiles

The following information summarises a range of information about centre users that will be used to assist in determining key future facility components, features and programs. Use of Centres by Gender The following table summarises the results of participation by gender for the two most popular health & fitness Centres.

Table 9.9 Use of Centres by Gender

Centre Total Sample Male Usage Female Usage


21% 43% 57%

Bodyfit Blaxland 15% 40% 60% The results of the two most used health & fitness facilities indicate Females make slightly more use of Springwood Aquatic & Fitness Centre (+14%) and Healthy Fit (+20%) than males. Use of Centres by Age

The usage of centres by age also indicates differences in centre choice, as the following results indicate:


Table 9.10 Use of Centres by Age

Centre Total Sample

15- 29 yrs

30- 49 yrs

50+ yrs


21% 14% 57% 29%

Bodyfit Blaxland 15% 60% 20% 20%

The review of use of health & fitness facilities by age of the two most used health & fitness centres indicates:

All age groups use Springwood Aquatic & Fitness Centre with a much higher than area average (21%) use by: 30-49 (57%), followed by 50 + years (29%), with lower use by 15-29 years (14%)

Above average use (60%) by younger people aged 15-29 years of Bodyfit Blaxland.

Overall the profile results indicate, Springwood Aquatic & Fitness Centre is attracting a greater proportion of females than males (in line with industry averages) and of middle to older age groups, whereas the other key competitor facility is attracting a higher proportion of younger people.

Given the current age profile & expected aging population trends, these results indicate the Springwood Aquatic Leisure Centre is currently attracting the largest & future growth target market cohorts.

Visitation Patterns

A majority of people use health & fitness facilities highly regularly, with 85% of respondents who used health and fitness centres, indicated they visit at least 2-3 times per week, as detailed below:

Average use of health and fitness centre: 2-3 times per week 55% 4-6 times per week 30% Weekly 12% Fortnightly 3%

9.1.15 Main Activities That Attract Users

To provide a guide to the main activities that attract user’s at the most popular health, fitness and wellness centre people use, the following profile data was identified:


Table 9.10 Activities participated in at Health and Fitness Centres

MAIN ACTIVITIES PEOPLE PARTICIPATE IN

Activity % Males Females 15-29 yrs

30-49 yrs 50+yrs

Use gym/weights 64 71 58 86 58 57

Cardio/Spinning programs/classes 42 29 53 43 33 50

Health and fitness program classes

21 14 26 0 33 21

Aerobics 6 7 5 0 8 7

Wellness classes (Pilates, Yoga etc.) 6 7 5 14 0 7

Other 15 21 11 09 25 14

The results indicate:

Two thirds of all users (64%) are attracted for Use of Gym/Weights;

Cardio/Spin Programs/Classes (42%) are the next most popular activity, followed by Health & Fitness Programs/Aerobics (27%)

Health Related Activities, Wellness Classes (Pilates, Yoga) attract a small number of users (6%) of respondents;

Males make greater use of the Gym/weights facilities (71% compared to 58% of females), whereas the opposite is true of Cardio/Spin & Health and Fitness Programs/Classes. The large difference between male participation in Cardio/Spin (29%) to female participation (53%) is a good example.

All age groups are drawn by the Gym/Weights areas (86% of 15-29 year olds, 58% of 30-49 years and 57% of 50+ year olds) relative to other activities;

Older people (50 + years) are similarly attracted by cardio/Spin classes (50%).

9.1.16 Future Use Of Health And Fitness/ Wellness Centres

To assist in identifying the level of demand for future use of Health, Fitness and Wellness Centres, respondents were asked if they would like to make greater use of a Health, Fitness and Wellness Centre in the future. Nearly half of all respondents (51%) indicated they would like to make greater use of health & fitness facilities in the future, whilst the other half (49%) indicated they would not. This compares to current membership/use rates of 16%. Of those that indicated they would like to make greater use, 70% of current members and 46% of current non-members indicated greater potential use. These results indicate a large potential increase in both frequency of use amongst existing members and numbers of new people that could be attracted to use and become a member of health & fitness facilities.


The results also showed that more young people were interested in further use, with 70% of people aged 15-29 years of age indicating yes, with slightly less than average potential use amongst 30-49 year olds and people over the age of 50. Future health & fitness use levels by different people compared to average use includes:

Table 9.13 Potential Future Use by Age and Gender

Category Gender

Yes for Future Use

(51% Ave)

Variance (+ or -)

Male 48% -3% Female 54% +3% Age: 15-29 30-49 50+

70% 49% 43%

+19% -2% -7%

Other parameters Member 79% +28% Non-Member 49% -2%

The results indicate:

Females are likely to make slightly greater future use of centres than males, continuing

current trends. Current 15-29 year olds are likely to make much higher use in the future, as are current

members. Middle 30-49 years & older people aged 50+ years, whom currently make average use,

are overall likely to make slightly more use in the future, however, at rates less than potential growth indicated by average area response rates (ie 51%).

9.1.17 Potential Use Of Redeveloped Health & Fitness Facilities

To assess how much interest Lower Blue Mountains residents have in using a redeveloped or improved health & fitness facilities at Springwood Aquatic & Fitness Centre or Glenbrook Aquatic Centre and the level of potential usage, respondents were asked to indicate whether they would like to use redeveloped facilities at Springwood Aquatic & Leisure Centre or Glenbrook, whether this use would be in addition to existing usage and how often they would be likely to use the facility. A large majority of respondents (79%) that would like to make greater use of health & fitness facilities in the future indicated they would be interested in using improved Springwood Aquatic & Leisure Centre facilities, whereas 62% of respondents would be interested in using Glenbrook Aquatic Centre. Four out of ten (40%) of respondents indicated they would replace their existing usage of facilities and six out of ten (60%) indicated they would increase their usage.


This compares to existing Springwood & Glenbrook Centre User Survey results, which indicated 67% of survey respondents indicated they would use improved facilities at Springwood Aquatic Leisure Centre, whilst only 43% indicated they would use Glenbrook Aquatic Centre. Further, a large majority (94%) of Glenbrook members who indicated they would like to make greater use of health & fitness facilities in the future, indicated they would not make use of new facilities at Springwood , however, one in three existing SALC users indicated they would use Glenbrook facilities (30%). Approximately, half of survey respondents indicated they would use facilities weekly (47%), whilst one quarter (26%) indicated they would use them 2-3 times per week.

9.1.18 Health & Fitness Facilities Users Would Like To See Developed

Respondents who indicated they would be interested in using new or expanded facilities at either Springwood or Glenbrook Centres were asked to nominate up to three features that they would like to see developed, to encourage their future use. There were approximately 26 features nominated with the most popular responses being: Weights Area 43% Group Programs/ Class Areas 32% Cardio room 23% Wellness/Mind Body Studio 10% Cardio room 7% Day Spa Area (i.e. Massage, Beauty) 5% Aquaerobics/programs 5% Allied Health professionals 4% Expanded Creche 4% Facilities/programs for elderly 3% Lap Pool/swimming pools 13% These results indicate potential high future demand for facilities including; Weights Area (43%), Group Programs/ Classes (32%), Cardio/Spin Room (30%) and Mind Body studio (10%). The main features to be considered to meet the needs of & attract greater potential use include: Larger Gym/Weights Area; More Group Program Area & Classes; Cardio/Spinning Room Mind Body Studio Wellness facilities & services (ie Day Spa, Consulting Suites) Although not the focus of this study, another priority feature identified by survey respondents was “lap swimming pools”.

9.1.19 Indoor Children’s Play Facilities

To assist in identifying the level of demand for future development of children’s play facilities at Springwood Aquatic Leisure Centre or Glenbrook Swim Centre, respondents were asked about their current and potential use on an indoor play gym, similar to that installed at Katoomba Sport and Aquatic Centre.


Approximately, one in five (19%) survey respondents had visited a Indoor Children’s Play Centre in the last 12 months, with the most popular centres being: Lolly pops (44%), followed by Monkey Mania (41%) and Kids Kingdom (18%). A majority of survey respondents visited centres irregularly (87%), on average less than monthly, an in large groups of 3 or more people (70%), predominantly comprising friends & family (76%).

9.1.20 Future Use of Indoor Play Centres

Approximately, 25% of survey respondents indicated they would like to make greater use of Indoor Play Centre’s, representing a small potential market growth of 6% on current participation levels. Of those interested in new facilities a more respondents in making use of facilities if located at Springwood Aquatic Leisure Centre (90%) compared to Glenbrook Swim Centre (65%). Four out of ten (42%) of respondents indicated they would replace their existing usage of facilities and six out of ten (58%) indicated they would increase their usage.

9.2 EXISTING USER SURVEY

This section summarises the key findings from the User Surveys conducted during October 2009 at Springwood Aquatic Leisure Centre & Glenbrook Aquatic Centre. A total of 298 surveys were completed by users of both centres providing information on:

Respondent profile Current and future use of Aquatic Leisure Centres Priority future improvements

The following provides a summary of the key issues identified for the combined survey results. Where there is a significant difference in respondent response for Glenbrook or Springwood Aquatic Centres, or issues identified by respondents particular to each centre, these have also been identified. Please note the respondent sample collected from Glenbrook Aquatic Centre is of insufficient size to be statistically valid, therefore provides an indicative guide to current user opinion size. A copy of the complete results & written comments is detailed in Appendix 3 of this document.

A summary of the key findings are detailed as follows:

9.2.1 Respondent Profile

The following summarises the user survey respondent sample for the Aquatic Centres: A majority of females (74%) responded to the survey compared to males (26%) The majority of respondents were 30 - 59 years of age (78%)


The predominant suburbs within the Council area were respondents live were: SALC Respondents – Springwood (28%) and Winmalee (18%), Faulconbridge (15%) followed by Blaxland/East Blaxland (9%), and Hazelbrook (8%). Glenbrook Respondents – Blaxland/East Blaxland (37%) and Glenbrook (25%) followed by Springwood (7%) and Lapstone(5%).

9.2.2 Use of Aquatic Leisure Centres

(i) Visits to Lower Blue Mountains Aquatic Centres The following summarises when and the frequency of use of the Lower Blue Mountains Aquatic Centres: The majority of users are regular users of the Centre using the centre at least weekly (90+%). A majority of Springwood Aquatic Centre survey respondents enter the Centre between 9.00 am and 12.00 pm (43%), before 9.00am (18%) or between 2.00 pm & 8.00 pm (32%). In contrast a majority of Glenbrook Aquatic Centre survey respondents enter the Centre before 9.00 am (37%), or between 2.00 pm & 5.00 pm (25%) or 9.00 am to midday (19%) (ii) Reasons for Choosing to Use Lower Blue Mountain Aquatic Centre Respondents provided a large range of reasons for why they chose to use Aquatic Centres. The main reason at both Centres was close to home. The priority reasons listed in order of frequency of response are detailed in the following table:

RESPONSE SALC % Result

GLENBROOK % Result

Close to home 36 47 Good Facilities 15 22 Indoor Pool 19 - Take part in Fitness Activity 15 6 Friends/Family Use it 5 9 Leisure Water 7

(iii) Rating of the Facility Survey respondents rated the current facilities and services at the Aquatic Centre they were using. The response profile for each Centre is provided in the following table:


GLENBROOK % Result

Excellent 23 7 Good 50 35 Adequate 27 45 Poor 1 12 Very Poor 0 2

The results indicate that 73% of respondents considered the Springwood Aquatic Leisure Centres facilities and services to be between excellent and good. 27% of current users consider the facilities adequate.


Only 42% of survey respondents considered Glenbrook Aquatic Centre, Good or Excellent. 45% of current users consider the facilities adequate. (iv) Facilities Existing Users Unhappy With Those respondents who indicated the facilities were poor or very poor were asked to indicate which facilities and/or services in particular they were unhappy with. Respondents indicated a large range of issues. The response profile for each Centre is provided in the following table:


GLENBROOK % Result

Lack of Car parking 27 Too Crowded 10 Water Temperature of pools 7 8 Not enough pools/water area 7 Size/Layout Design 6 Costs too much 6 Social Food Facilities 6 8 Condition/cleanliness Change/toilets 6 10 Lack of Health & Fitness Programs 13 No Leisure/Fun Water 9 Lack of indoor Sports Areas 9

The main reason for SALC was Lack of Car Parking and issues related to size/layout/design and crowding (both in Health & fitness & pools). The main reason for Glenbrook Aquatic Centre was Lack of Health & Fitness programs and issues related to indoor facilities and cleanliness of change rooms/toilets. Quality of social and food services was also mentioned at both sites.

(v) Main facilities used at Aquatic Centres

The main facilities used at the Aquatic Centre as indicated by survey respondents are listed in the following table:

RESPONSE SALC

% Result GLENBROOK

% Result Waterslide/Leisure/Fun Pools 28 Health & Fitness Facilities 20 Competition/Lap Pool 16 44 Program Pool 15 Café/Food Services 14 14 Outdoor Grounds 13

Whereas the main facilities used at Springwood Aquatic Leisure Centre are Leisure/Fun Pools (28%) and Health & Fitness facilities (20%), The main facilities used at Glenbrook Aquatic Centre are Competition Pool (44%). Café & Food services were used by an equal number of respondents at both facilities (14%). (vi) Use of Other Swimming Pools/Leisure Centres in Last 12 Months

Survey respondents were asked to indicate which other swimming pools they have used in the last 12 months. Most survey respondents indicated they use both Springwood & Glenbrook Aquatic Centres (30-45%). Only a small number of respondents indicated they had used Council’s other outdoor facilities (less than 10%) or other facilities from within the region (ie Penrith, Lithgow etc).


9.2.3 Future Use of Aquatic Centre

Survey respondents were asked if they would like to make greater use of Aquatic Leisure Centres in the future. A majority of respondents (83-92%) indicated they would like to make greater use of facilities in the future. (vii) What would encourage greater use of Aquatic Centres in the future?

Survey respondents were asked to indicate what would encourage them to continue their use of the centre in the future. The main schemes or features that would encourage continued use are listed as follows in order of frequency of response in the following table:


GLENBROOK % Result

Membership Packages/discounts 13 7 More Carparking 10 Range of Outdoor Pools 15 12 More Indoor Pools 12 21 Allied Health & Wellness Services 8 7 More Health & fitness facilities/programs 7 13 Cleaner & Larger Toilets/Change 7 7 Longer Opening Hours 4 6 Improved Social Food Areas 4 4

Current Lower Blue Mountains Leisure Centre users indicated a broad range of facilities and services that would encourage their future use. With the higher priority facilities being: SALC - Range of outdoor pools (15%), Membership Packages/Discounts (13%) More Indoor Pools (12%) and More Carparking Glenbrook Leisure Centre – More Indoor Pools(21%), More Health & Fitness Facilities(13%) and More Outdoor Pools(12%)

9.2.4 Use of Health & Fitness Facilities

Approximately 41% of Springwood Aquatic Leisure Centre users and 28% of Glenbrook, or 38% of combined Aquatic Centre survey respondents are also members of Health & Fitness Facilities. (i) Which Health & Fitness Facilities Member or Used Survey respondents were asked which health & fitness facilities they were a member of or had used in the past 12 months and which they had used most. Springwood Aquatic Leisure Centre was the most popular and used Centre. A majority (71%) had used or were a member of Springwood Aquatic Centre and 75% of respondents indicated it was the most used. Other centres used by a small proportion of survey respondents included:

Fitness First Penrith Fitness on St Johns Curves Springwood Curves Blaxland Katoomba Sports & Aquatic Centre

The following summarises when and the frequency of use of the Lower Blue Mountains Health & Fitness Facilities:


(ii) Rating of the Facility Survey respondents rated the current facilities and services at the Centre they were using most. The response profile for each Centre is provided in the following table:

RESPONSE % Result

Excellent 24 Good 55 Adequate 17 Poor 4 Very Poor 0

The results indicate that 79% of respondents considered their currently used facilities (majority use Springwood Aquatic Leisure Centres facilities) and services to be between excellent and good. 17% of current users consider the facilities adequate.

9.2.5 Future Use of Health & Fitness Facilities

Survey respondents were asked if they would like to make greater use of Health & Fitness facilities in the future. A majority of respondents (68%) indicated they would like to make greater use of facilities in the future. (iii) Use of Health & Fitness Facilities at SALC or Glenbrook Aquatic Centres in the future? Survey respondents, interested in making greater use of Health & Fitness facilities were asked if they would be interested in using new health & fitness facilities at either Springwood Aquatic Leisure Centre or Glenbrook Aquatic Centre. Overall, 67% of survey respondents indicated they would use improved facilities at Springwood Aquatic Leisure Centre, whilst 43% indicated they would use Glenbrook Aquatic Centre. A majority of Springwood Aquatic Leisure Centre survey respondents indicated use of new facilities located at Springwood (86%), whilst 30% indicated they would use Glenbrook facilities. A majority of Glenbrook Aquatic Centre survey respondents indicated use of new facilities located at Glenbrook (84%), whilst only 6% indicated they would use Springwood facilities. These results confirm the main reason people choose facilities, being close to home. (iv) Replacement/Additional usage of current Health & Fitness Centre

Current users who responded they would be likely to use improved facilities, at either Springwood Aquatic Leisure Centre or Glenbrook Aquatic Centre were asked if their use would replace existing usage or if it would be in addition to current use. Approximately, 25% of Glenbrook Aquatic Centre users and 50% of Springwood Aquatic Centre respondents indicated ‘additional use’ of improved facilities. This indicates current users are likely to visit on a more regular basis, if their nominated priority improvements are made. (v) Facilities & Services to Encourage Greater Use


Survey respondents were asked to indicate what would encourage them to make greater use of health & fitness facilities in the future. The main schemes or features that would encourage continued use are listed as follows in order of frequency of response in the following table:


GLENBROOK % Result

Weights Area 23 6 Group Programs 15 17 Cardio Area 13 7 Spinning Room 8 4 Wellness – Mind body Studio 9 14 Outdoor grassed areas 4 12 Outdoor Sundeck/lounge 7 11 Day Spa 9 11 Crèche 7 9 Allied Health Professionals 3 6

Current Lower Blue Mountains Leisure Centre users indicated a broad range of facilities and services that would encourage their future use of new health & fitness facilities. With the higher priority facilities being:

Group Programs Weights Area Wellness –Mind Body Cardio Room Day Spa Outdoor Sundeck/lounge

9.2.6 Use of Indoor Children’s Play Centres

Survey respondents were asked if they had visited a Indoor Children’s Play Centre in the last 12 months. Approximately 47% of survey respondents had visited a centre. (i) Which Indoor Children’s Play facilities used Survey respondents were asked which Indoor Children’s Play facilities they had used in the past 12 months and which they had used most. Lolly Pops was the most popular and used Centre. Approximately 39% had used Lolly Pops and 44% of respondents indicated it was the most used. Other centres used by survey respondents in included:

Monkey Mania (33%) Kids Kingdom (13%) Kidz Club (6%)

The following summarises when and the frequency of use of the Lower Blue Mountains Health & Fitness Facilities: (i) Visits to Indoor Play Centres The following summarises who uses and the frequency of use of Indoor Play Centres: The majority of users are irregular users of indoor play centres using the facilities monthly or less (90+%).


A majority (75%) of survey respondents attend in groups of three or more people, comprising family & friends (48%), followed by immediate family (31%) and grandparents (13%).

9.2.7 Future Use of Indoor Play Facilities

Survey respondents were asked if they would like to make greater use of Indoor Play facilities in the future. Approximately 40% of respondents indicated they would like to make greater use of facilities in the future. (iii) Use of Indoor Play Facilities at SALC or Glenbrook Aquatic Centres in the future? Survey respondents, interested in making greater use of Indoor Play facilities were asked if they would be interested in using new facilities at either Springwood Aquatic Leisure Centre or Glenbrook Aquatic Centre. Overall, 72% of survey respondents indicated they would use improved facilities at Springwood Aquatic Leisure Centre, whilst 38% indicated they would use Glenbrook Aquatic Centre. A majority of Springwood Aquatic Leisure Centre survey respondents indicated use of new facilities located at Springwood (80%), whilst only 30% indicated they would use Glenbrook facilities. A majority of Glenbrook Aquatic Centre survey respondents indicated use of new facilities located at Glenbrook (64%), whilst only 12% indicated they would use Springwood facilities. These results confirm the main reason people choose facilities, being close to home. (iv) Replacement/Additional usage of current Indoor Play Centre

Current users who responded they would be likely to use new Indoor Children’s Play facilities, at either Springwood Aquatic Leisure Centre or Glenbrook Aquatic Centre were asked if their use would replace existing usage or if it would be in addition to current use. Approximately, 63% of Glenbrook Aquatic Centre users and 53% of Springwood Aquatic Centre respondents indicated ‘additional use’ of improved facilities. This indicates current users are likely to visit on a more regular basis, if new facilities were built.

9.2.8 Summary of User Survey Comments

A review of the User Survey comments reveals the following key issues and themes. (i) Current Issues:

Survey respondents raised concerns about the following key issues: Size & Crowding in the weights & group fitness programs Creche – disruptive to group fitness & children Staff – excellent, friendly, helpful Need for expansion More pool space – program & lanes Cleanliness of toilets/change & spa/sauna


More carparking – disabled access carparking Lower Pricing Longer operational hours Consistency of Learn to Swim Staff

(ii) SALC Future Facility Needs:

Survey respondents commented on future facility improvements and needs. The key items raised were: Health & Fitness Increase space available for weights & cardio More group program space Separate creche Pool Spaces More Lanes/pool space More Outdoor Pools Operational hours Longer Operational hours, particularly daylight savings

Associated facilities More Car parking – Disabled access Improve cleanliness toilets/changerooms More Family Change More outdoor-grassed areas Improved Social-café areas – indoor/outdoor, healthy foods

Cost Lower entry fee for regular users, families and learn to swim

(iii) Glenbrook Aquatic Centre Future Facility Needs:

Survey respondents commented on future facility improvements and needs. The key items raised were: Health & Fitness Add health & fitness multi-purpose & meeting rooms Pool Spaces More Lanes/pool space for waterpolo & squads New Indoor Lap Pool Operational hours Longer Operational hours, All Year Round

Associated facilities Improve cleanliness toilets/changerooms Improve size of change Improved Social-café areas – indoor/outdoor, healthy foods

Cost


Lower entry fee for regular users, families and learn to swim

9.3 STAKEHOLDER WORKSHOPS

The consultant team ran four Focus Groups In November 2009. The following Summarises the findings of the Focus Groups.

9.3.1 Springwood Aquatic & Fitness Centre Users

Held: 12.30pm Thursday 29th October CURRENT ISSUES Management

Very well run, great community atmosphere & feel Price too expensive for some members of community

Aquatics

1400 LTS members Pool too crowded when squad & LTS classes on

Dry Facilities

Program, weights and warm-up room too crowded during peak times – ie am & pm

Creche too small Programming – need more classes

Site & Neighbourhood Issues

Car parking Road traffic Noise pollution

FUTURE NEEDS Aquatics

New hydrotherapy pool More programs - aquatic rehabilitation/sports recovery & conditioning, aged

& disability groups, aquatics fun programs for post LTS & Squad kids

Dry Facilities Allied health professionals & services – sports medicine, physiotherapy,

naturopath, masseuse etc More Health & Fitness Space More programs health & fitness, older adults classes (stretching, falling etc) More children’s programs, indoor programs (dance, martial arts, gymbaroo,

playgroup etc), More social programs/events/activities/game days, health & fitness for older

adults, More dry toilets/change amenities


More community, meeting & social spaces - Possible Restaurant, conference facilities

Better quality Café – indoor/outdoor & serving the park, Good Coffee, access to drinking water.

More storage space

Management Better Marketing & Promotions & PR around good initiatives – showcase health

eating, environmental & community initiatives Better utilisation of the natural environment – indoor/outdoor spaces and

programs (ie Better integration indoor/outdoor – classes, equipment, sun baking, stretching area, café) etc

Differential Pricing & Product Packaging (peak-off/peak timing, reciprocal centre rights(say city workers), discount family swim pass if gym member)

Environmental Sustainability Initiatives – water saving initiatives, solar power etc Glenbrook needs to maintained as outdoor family pool Offering instructor training

Neighbourhood Issues

Car parking, Traffic & Access – encourage non-vehicular travel (new bike racks), back entry with disabled/pram access

FUTURE CONSTRAINTS Park location & size of land available

Planning restrictions – re carparking, traffic, building heights & footprint Residential impacts – noise Capital Budget availability Availability of Health & Fitness Instructors Potential use of Glenbrook if improved - Majority unlikely to use due to time,

family and work commitments

9.3.2 BMCC Staff Workshop

Held 2.30 pm, 29th October 2009 CURRENT ISSUES Management & Financing

Operational budget $1.7 Million per annum across the group Council operating budget position worsening, capital improvement &

replacement position declining Need to improve operational performance across the group

Aquatics

1400 LTS members, Squads growing rapidly Pool too crowded when squad & LTS classes on

Dry Facilities

Program, weights and warm-up room too crowded during peak times – ie am & pm, turning people away & getting complaints

Creche too small


Café restricted to aquatic users only

Site & Neighbourhood Issues

Car parking Road traffic & access Noise pollution Size of site and ability to redevelop

9.3.3 Glenbrook Users & Residents Group Workshops

Held 12.30 & 2.30 pm 5th November 2009 CURRENT ISSUES Management

Very well run, great community atmosphere & feel Outdoor pool & natural setting unique, loved Lack of year round operational hours Club memberships (Nepean and Glenbrook 140 members each) Some issues around vandalism of site

Dry Facilities

Old & Run down toilets/change amenities, administrative, club & kiosk facilities Lack of amenities/change Lack of dry amenity space Family orientated facilities (ie bbq’s, play) Shade – for spectators & pool users Lack of Café Lack of Creche

Aquatics

Too crowded, particularly during school carnival times & at pm Most heavily programmed pool in Mountains Need for more pool space for LTS, Recreation/leisure, children’s play space,

Waterpolo etc. Lack of space limits ability for swimming clubs & waterpolo to train at facility,

lack of programs – ie stroke correction, bronze medallion

Neighbourhood Issues

Natural setting & trees to be maintained Noise Carparking & traffic issue Low key, community orientated feel

FUTURE NEEDS Aquatics

Maintain outdoor 50 m pool – add onto, as per original plans for second stage More pool space Indoor program pool(s) – hydrotherapy, LTS, Waterpolo junior, 25 m. Outdoor recreational water – children’s play


For competition- Spectator Seating, Swimming Blocks, Lighting Shade – pool & spectators Improved access to pool – lift/hoist etc

Dry Facilities

Upgraded toilets/change amenities New indoor multi-purpose rooms for club, classes & programs Club facilities Improved administration, meeting & storage areas Possibly health & fitness – but more older adult & wellness orientated style, in

keeping with relaxed natural feel of centre (ie pilates, yoga, heart moves, injury prevention/strengthening

Health & Fitness would improve swim club training programs Improved Café – good coffee Creche facilities

Management

Open all year round More marketing/promotions Environmental best practice Pricing – free for over 75 yrs Promotion to members of scheduling of events (fixed times for carnivals) Police carparking

FUTURE CONSTRAINTS

Natural setting, family orientated must be maintained Aesthetically pleasing, environmentally sympathetic, architecturally designed Neighbourhood concerns regarding too many users, traffic, car parking &

noise issues Growth of swimming clubs restricted by economic drivers, more social

orientation, less sports focus in parents. Aging demographic

9.4 STAKEHOLDER INTERVIEWS

A limited number of stakeholder interviews were conducted in December 2009 and principally of those individuals that were invited, but were unable to attend one of the workshops. A list of stakeholders is provided in Appendix 3. A number of organisations nominated by BMCC Leisure Staff were contacted, but either were unable to be contacted, at the time, despite follow-up contact, or felt they were not in a position to make comment, regarding the provision of expanded health & fitness facilities, other than to comment that the Springwood Aquatic Leisure Centre was a highly used facility by the community. The following summarises the key issues raised by interviewees. Blue Mountains Coaching Syndicate Growing number of participants Lack of water space for programs as well as dry floor space for out of pool development

activities Cost of entry & facility use and impact on participant families


Future of swimming participants expectations & coaching direction is for incorporation of a range of in-pool and dry programs for participants and athletes

New health & Fitness facilities would benefit program appeal, and be used by the syndicate, provided access at suitable times & appropriate costs.

9.5 WRITTEN SUBMISSIONS

A total of …written submissions were received over the course of the study. The main issues raised in written submissions were: Lack of pool space for children & young people, overcrowding and dominance of lap

swimming and swimming lessons Neighbourhood effects related to noise, lighting, safety & traffic impacts of neighbours,

and concerns over expected future increased impact if further development occurs onsite at both Springwood or Glenbrook pools

Value of Glenbrook facility as a local community facility, need to improve maintenance & water temperature of existing pools and

Needs to add more leisure features to increase user appeal of Glenbrook, however, balanced against need to maintain Glenbrook as a natural outdoor facility in keeping with Blue Mountains lifestyle & environment.

A number of submissions commented on the quality of current staff and services. 1 0 S U M M A R Y O F K E Y F I N D I N G S

This Section provides a summary of the key study findings relevant to the future planning & development of Lower Blue Mountains Leisure Centres, and in particular to the Expansion of Health & Fitness Facilities, or new Indoor Play Facilities. Strategic Environment Council is committed through it’s strategic planning directions and project priorities to encouraging healthy lifestyles of the Blue Mountains community. Provision of Leisure services across the Council area significantly contribute to the objective. Council currently has an annual gap in maintenance and renewal funding of the existing asset base, and provides high levels of service subsidies. BM Leisure Centre Group has been set up as a GBE, with the aim of providing operational surpluses, that can be used to offset other high operational cost services. Although, currently requiring operational subsidies, Springwood Aquatic leisure Centre, has been a highly successful centre, well patronised by the Blue Mountains Community, and offers the most potential to meet Council’ objective of reduced operational subsidies. Area Profile The Lower Blue Mountains Leisure Centres draw of a small to medium catchment (up to 5km radius of centres) estimated at approximately 45,000 people in 2010, which is likely to remain stable over the next 10 years. Approximately, two thirds of the catchment population are aged 0-49 years, the highest users of leisure centres. Future age projections indicate a general aging of the population, with people aged 60 years expected to represent a larger overall percentage of the population.


Combined with more active aging trends, participation levels amongst older age groups and demand for facilities & services for older people will be in higher in the future. Competitive Environment The review of the competitive environment indicates there are relatively few “full-service” health & fitness competitors, or large “brand” competitors offering a similar range of facilities, programs & services within the Lower Blue Mountains Primary Catchment area. The review indicates SALC currently operate in a low competition environment. This is likely to be impacting demand, and is reflected in the market research, which indicated SALC is the dominant player in the market, with 60-70% market share. Key Health & Fitness competitors are located in the Blaxland area, and future strategies to develop facilities in this area, will need to consider impacts on existing operators. There are a large number of Indoor Children’s Play Centres, although a majority of these are located in the Penrith Valley. Market research indicates, residents of the Lower Blue Mountains are prepared to travel to these centres. Future Market Growth Potential Based on industry trends of between 15% and 25% of the population are a member of/or participating in health & fitness facility related activities, this would see between 6,780 & 11,250 current & projected health & fitness participants in the lower blue mountains. Market research undertaken for the project indicates, approximately 16% of the population are currently members of a gym, with a further 12% of survey respondents indicating they would like to become members of a health & fitness facility, subject to desired improvements being made. Current Centre Operations The annual attendance review indicates the Springwood Aquatic Leisure Centre has expanded its usage annually from a low of approximately 185,000 in 2004/05 (opening year) to a high of 287,768 in 2007, a 55% increase over its first three years of operation. Over the same period Health & fitness attendances have grown by 20% (gym) and 11% (fitness), peaking in 2006/07 and declining in each year thereafter. Anecdotal evidence, supported by market research indicates this is largely due to overcrowding. A review of health & fitness facility capacity indicates the Centre is at or near capacity in comparison to industry indicators, which indicate a membership base range of 960 to 1140 members (current membership 1200, higher in previous years 1,500 +). Group Fitness occupancy reviews indicate average occupancy of between 60% (pm peak times) and 71% (am peak times), with upt to one third of classes over-subscribed, indicating whilst, there is some capacity to improve usage of existing programs, there are minimal timeslots available to offer new programs, or options to increase capacity of high use programs to try and meet extra user demand during peak times, within the constraints of the existing facility. Current centre operations indicate both Springwood Aquatic Leisure Centre and Glenbrook Aquatic Centre are operating at above or at industry averages in terms of visitation,


programs & services offered and income per visit (exclusive SLA income), however, below industry standards in terms of expenditure. Springwood Aquatic Leisure Centre is currently operating at an operational loss of approximately $232,000 (Pre-Council SLA Income, based on 07-09 budget results). Similarly, Glenbrook Aquatic Centre, is currently operating at an operational loss of approximately $190,000 (Pre-Council SLA Income, based on 07-09 budget results). Overall, the Springwwod Aquatic Leisure Centre Health & Fitness business is profitable, however, compared to industry averages, the area is achieving a lower return on investment than comparable centres. Based on 2008/09 results, the Health & Fitness area is achieving a 125% return on expenditure, in comparison to industry standards, this is at the lower end of industry standards (125-180%). Thus future strategies will need to consider cost structures, membership pricing and usage. Site Review The preliminary site review indicate, future development is permissible and there is sufficient land to allow a small future expansion of the facility, however, there are a number of site constraints, However, the main issue of concern is car-parking, street traffic and neighbour effects (noise & lighting), that will need to be considered as part of future design & development phases. Council has previously addressed neighbourhood effects, through operating hours & programming and identified a range of feasible car parking & traffic options to address car parking & access, which will need to be considered as part of future development strategy. Current Aquatic Leisure Centre Participation trends The Household Telephone Survey results indicate when considered as a percentage of population who use pools, respondents living in Blue Mountains Council area make high use of aquatic leisure facilities compared to other regional areas in Australia that have similar aquatic facilities. The results indicated approximately 65.0% of people surveyed had used or visited a public swimming centre in the past 12 months. Similar regional areas surveyed by SGL that have modern, up to date, aquatic facilities, record usage rates of between 50% to 70%. This indicates limited capacity for market growth (particularly aquatics), at a maximum of 5%. Future leisure centre growth strategies will need to come from increasing usage & yield from existing customer base, as well as encouraging new users by offering targeted, high yield facilities, programs & services. Springwood aquatic leisure centre was the most popular (84%) and most used (68%) facility used by Lower Blue Mountains residents. The main reasons that attracted people to use leisure centres were:

Lap swim/Fitness 50% Recreation Swim/Fun 31% Take Child to Pool 31% Health & Fitness programs/Classes 23%


Current Health & Fitness Participation Trends Approximately, 16% of survey respondents indicated they were a member of a health & fitness club. Most visit highly regularly, with approximately 85% visiting at least 2-3 times per week, with the other visiting less. Springwood Aquatic Leisure Centre held the largest market share (27%). The next most popular health & fitness facilities were Bodyfit Blaxland (15%) and Curves Blaxland(12%). A majority of people considered the facilities they currently use as good (52%) or excellent(36%). The most popular activities by members were health & fitness (64%), Cardio/Spinning classes (42%) and Group Fitness Programs (24%). Main reasons people were unhappy with current health & fitness facilities they used most were size/layout/design of current facilities (50%) and crowding (25%) Future Use Of Health & Fitness Facilities To assist in identifying the level of demand for future development of health and fitness facilities at Springwood Aquatic Leisure Centre of Glenbrook Swim Centre, respondents were asked about their potential use of new facilities. Approximately, half (51%) of survey respondents indicated they would like to make greater use of health & fitness facilities, representing a significant market growth opportunity, given only 16% of respondents are actual health & fitness facility members currently, and approximately 23% of current leisure centre users main reason for visiting is health & fitness classes & programs. Of these approximately, 25% of these were current health & fitness centre members, in which 79% of current members indicated they would like to make greater use, and 75% were current non-members, in which 46% said they would like to make greater use in the future. Those interested in facilities at Springwood: 79% Those interested in facilities at Glenbrook 62% Four out of ten (40%) of respondents indicated they would replace their existing usage of facilities and six out of ten (60%) indicated they would increase their usage. This compares to existing Springwood & Glenbrook Centre User Survey results, which indicated 67% of survey respondents indicated they would use improved facilities at Springwood Aquatic Leisure Centre, whilst only 43% indicated they would use Glenbrook Aquatic Centre. Further, a large majority (94%) of Glenbrook members who indicated they would like to make greater use of health & fitness facilities in the future, indicated they would not make use of new facilities at Springwood , however, one in three existing SALC users indicated they would use Glenbrook facilities (30%). Approximately, half of survey respondents indicated they would use facilities weekly (47%), whilst one quarter (26%) indicated they would use them 2-3 times per week.


Priority Future Health & Fitness facility Components Survey respondents interested in making greater use of facilities in the future were asked to indicate what facilities & features would encourage greater use of health & fitness facilities in the future. The top priority facilities were:

Weights Area 43% Group Programs/Classes 32% Cardio Room 21% Wellness/Mindbody 10% Spinning Room 7% Day Spa/Allied Health Services 9%

Current Use of Indoor Children’s Play Centres Approximately, one in five (19%) survey respondents had visited a Indoor Children’s Play Centre in the last 12 months, with the most popular centres being: Lolly pops (44%), followed by Monkey Mania (41%) and Kids Kingdom (18%). A majority of survey respondents visited centres irregularly (87%), on average less than monthly, an in large groups of 3 or more people (70%), predominantly comprising friends & family (76%). Future Use of Indoor Play Centres Approximately, 25% of survey respondents indicated they would like to make greater use of Indoor Play Centre’s, representing a small potential market growth of 6% on current participation levels. Of those interested in new facilities a more respondents in making use of facilities if located at Springwood Aquatic Leisure Centre (90%) compared to Glenbrook Swim Centre (65%). Four out of ten (42%) of respondents indicated they would replace their existing usage of facilities and six out of ten (58%) indicated they would increase their usage. 1 1 F A C I L I T Y D E V E L O P M E N T S T R A T E G Y

This section provides a strategic framework for the future provision and development of the proposed new expanded Health & Fitness and Indoor Children’s Play Centres for the Blue Mountains Area over the next 10 years. The Strategy is the culmination of the background review, market research & stakeholder consultation undertaken and in consultation with the Project Steering Committee. The Strategic Framework includes: Facility Delivery Principles Key Strategy Drivers Provision Strategy Implementation Plan


11.1 FACILITY PROVISION PRINCIPLES

The following Facility Provision Principles have been developed to guide the future provision of the expanded facilities:

Facility development strategy aim is for a reduction of cost of Lower Blue Mountains Leisure Centre operations and annual budget deficits.

Management & operations should reflect as far as practical, more commercially

orientated practices.

Facility design and development should maximise benefits of capital cost & lifespan of existing facilities as well as that of new facilities, and minimise operational costs.

That any future facility development should prioritise, build on and consolidate

existing business before considering new business options.

Principles of ESD and operational sustainability are reflected in the design of all future buildings.

11.2 KEY STRATEGY DRIVERS

Key Study Drivers that support the Strategy & Implementation Plans are: Business & Operations performance indicate, whilst the Springwood Aquatic Leisure Centre & Glenbrook Aquatic Leisure Centres, perform at or above industry standards in terms of utilisation & income levels, however, expenditure is well above industry standards. There is a need to improve yield per visit & usage at a greater rate than expenditure. Participation levels in the Lower Blue Mountains is at the high end of industry trends and benchmarks (ie highly active community) and market research indicates this is likely to continue in the future - with growth potential in targeted markets & high yielding markets like health & fitness. The Springwood Aquatic Leisure Centre currently enjoys a low competition environment in health & fitness, as “big brand” named competitors are currently not in the area. The main competitors are in the Blaxland area, which impacts future viability of facilities in the area. Current pricing strategy which sees Membership access to all BMCC aquatic Centre and Pools is at the low end of industry standards and this could be contributing to high demand levels. Market research indicates that majority of people use leisure centres because its close to home. A majority of current users of SALC come from the surrounding suburbs. Approximately, 30% percentage of current users, interested in making greater use of facilities in the future, are likely to switch their use to Glenbrook Aquatic Centre, if alternative health & fitness facilities built, which may impact future viability of SALC. Further, developing a centre at Glenbrook, has the potential to split market and create a greater detrimental impact on future visitation at SALC, whilst, likely to be a lower yield


business due to lower visitation & higher centre management & overheads, as compared to leveraging existing centre management & operations of SALC. Planning & development constraints at SALC, will dictate minimal space/area required for maximum income yield & return on investment. Given the high current (existing business) & potential ROI of health & fitness facilities, prioritisation of space allocation & development should be given to health & fitness facilities, over lower demand & yielding components (ie Indoor children’s Play centre).

11.3 FACILITY DEVELOPMENT STRATGEY

The following strategy has been developed for Councils’ consideration to meet the Council’s aims & objectives, in commissioning the study being to: Assess the feasibility of developing new Health & Fitness and Indoor Children’s facilities, at Springwood Aquatic Leisure Centre and/or possibly, at Glenbrook Aquatic Centre, to assist in lessening overcrowding issues at Springwood Aquatic leisure Centre and improve operational performance across the aquatics business group. It is recommended Council adopt the following approach and staged facility development strategy for the Lower Blue Mountains incorporating the following elements: 1) Although not a specific objective of the brief, during the course of the study SGL

identified a range of potential opportunities to assist in reducing operational deficits (pre –council contributions) as an initial improvement of the business. As such, SGL suggests a review of SALC business profit & loss of activity Centres, to identify opportunities to reduce expenditure costs and improve yield, as a first step in future development strategy.

The business review undertaken as part of this study indicates there may be opportunities to manage demand, reduce expenditure costs and improve yield in key activity areas. Key areas to consider include:

o Profitability of Café & Retail Areas o Staffing levels and/or associated costs in the Health & Fitness,

Reception & Administration business areas. o Pricing Strategy to consider:

Entry & membership price increases Peak & Off-Peak timing Usage policies (first in first served & booking fees) SALC membership only pricing

o Review floor configurations & options to improve off-floor storage to increase capacity of existing health & fitness gym & group fitness areas.

2) Expand health & fitness facilities and associated infrastructure (crèche, amenities,

café area) at Springwood Aquatic Leisure Centre, subject to further more detailed planning & development assessment, design & capital cost planning.

3) Subject to planning & development & space availability, consider development of

new indoor play centre as a secondary priority, for future development at Springwood Aquatic Leisure Centre.


4) Further, investigate opportunities to develop Health & Fitness facilities at Glenbrook Aquatic Centre, once Springwood Aquatic Leisure Centre, expanded health & fitness facility business is successfully established, and subject to further more detailed business, design & capital cost planning.

The following Sections detail the development options & associated business planning for Strategy Recommendation 2 – Expand Health & Fitness Facilities at Springwood Aquatic Leisure Centre. 1 2 S A L C E X P A N D E D H E A L T H & F I T N E S S F A C I L I T Y

D E V E L O P M E N T O P T I O N

This section provides an overview of the priority facility development components, base case development option associated area schedules & associated costs identified for the proposed expanded health & fitness facilities at Springwood Aquatic Leisure Centre. Please note, the project team have recommended that indoor play facilities should be considered only as a secondary priority and subject of further more detailed analysis of planning & development constraints, which sees future facility expansion potential very limited. 12.1 PRIORITY FACILITY COMPONENTS & AREA SCHEDULES The market research, consultation and review of industry trends indicate that the following priority facility expansion components should be considered subject to favourable feasibility study outcomes and acceptable and achievable, planning & development assessments & capital costs:

Expand weights area to provide separate Cardio & Stretch area Provide new multi-purpose program room/group fitness studio Additional Change Amenities Consulting Suite/Massage Room Additional On-Floor Office & New Storage Additional Café/Retail Space

Area schedules have been developed using relevant industry standards and have been used to guide future business planning assumptions. The following table provides approximate activity component take up areas.

FACILITY COMPONENT SPACE ALLOCATION Sq m

Expanded Gym/Weights Area – Separate Cardio & Stretch Area 180

Multi-purpose program room/group fitness studio 120 Additional Change Amenities 50

Consulting Suite/Massage Room 20 Additional Gym Office & New Storage 30 Additional Café/Retail Space 50 Circulation Allowance 10% 50 Total Area 500 sq m


Based on this area schedule, this sees total health & fitness floor space increase to approximately double it’s original design allocation, and brings the centre in line with minimum floor space allocations for health & fitness in similar facilities built today.

12.2 PRE-DESIGN COST ESTIMATES

Pre-design Indicative Capital Cost Estimates have been completed as a guide to facility cost in today’s market using the following process:

Identifying area capacities. Using current leisure facility construction rates (Dec 2009) to develop a

construction cost based on estimated total facility area. Using leisure facility industry other project average costs with the component

construction rates to identify a pre design facility option indicative capital cost estimate.

As the exact component, area schedules, site, facility design and quality specifications have not been detailed the cost estimates are provided as a guide only to capital costs in today’s market. Dependent on the eventual facility component options and construction timeframes the costs will vary. Current industry escalation costs are at 4-6% per annum. Based on the proposed facility development timeframe of 2012/13, this will see capital costs increase over the period. The capital cost estimate is for the development components only as described in the following table:

Facility Components Area Schedule m sq

$ Allowance M sq

Cost $ (2009)

Expanded Gym/Weights Area – Separate Cardio & Stretch Area 180 $3,500-$4,500 $630,000-$810,000

Multi-purpose program room/group fitness studio 120 $3,500-$4,500 $420,000-$540,000

Additional Change Amenities 50 $4,000-$4,500 $200,000-$225,000

Consulting Suite/Massage Room 20 $3,500-$4,500 $70,000-$90,000 Additional Gym Office & New Storage 30 $2,500-$3,500 $75,000-$105,000 Additional Café/Retail Space 50 $3,500-$4,500 $175,000-$225,000 Circulation Allowance 10% 50 $2,500-$3,500 $125,000-$175,000 New Equipment Purchase Allowance $250,000 Total Facility Size m² TBC TBC $1.95M-$2.42M Carparking, Landscaping/Outdoor Amenity TBD TBD $570,000-$630,000 Total Development Costs Estimate $2.52M-$3.05M

The proposed base case development option sees a pre-design estimated cost of between $2.52 and $3.05 million in 2010 dollars. Please note this capital cost estimate includes; Building Costs, Consultants, Other Costs, Fees & Charges, Contingency. The estimate also includes an allowance for new equipment purchase. Should Council choose to lease equipment this is likely to cost in the order of $55,000 per annum, based on a 8%, 6 year loan term. The estimate does not include:


Allowances for loose fittings, fixtures and furniture Cost escalation to construction date Design variable allowances Site Condition allowances GST

1 3 B U S I N E S S & F I N A N C I A L P L A N N I N G

This Section provides a summary of business and financial models and projected financial performance of the proposed health & fitness expansion at Springwood Aquatic Leisure Centre. This Section covers the following:

Financial Models Global Impacts Business and demand assumptions Business performance summaries

The base case model incorporates new business only and has been developed using SGL’s 10 Year Financial Modelling Software for Leisure Centres. An additional financial model depicting the financial performance of a redeveloped Springwood Aquatic Leisure Centre and incorporates the current facility business combined with the base case financial performance of the proposed new facilities can be completed for final draft stage development. When reviewing the financial projections, it should be noted that the financial modelling is not set into a specific timeframe and uses current budget performance and centre usage as a base point for estimating future increased business with improved facilities. Any change in business performance during the period before the new areas are constructed and open will change operating projections. The financial modelling therefore has been completed to provide a guide to likely operating performance and to assist Council in prioritisation of Lower Blue Mountain Leisure Centre developments. More detailed financial modelling is then recommended on a final concept plan that also has a projected construction and open for business timeline. Please also note the financial models to date are for annual operating budgets review and comparison only and do not include:

Cost of capital to finance development Rates or taxes (excludes GST)

These costs can be added at a later stage once final capital budgets & financing strategy set. The Section should be read in association with the financial model spreadsheets listed in appendix one of this report. The report has been prepared for Blue Mountains City Council as a guide to potential business development, and will need to be further refined as final facility development schedules, construction timeframes, capital cost & financing strategy and operating parameters are determined.


13.1 KEY BUSINESS ASSUMPTIONS

This section summarises the range of key operational business assumptions that guide the financial model. Operating hours The base case financial model uses existing business and operational hours, which sees the following core business hours for management and staff rosters: Monday to Friday: 6am to 8.30pm Saturdays/Sundays: 8am to 6pm These have been set up as the minimum hours of operation. The staffing rosters allow for duty managers to staff the centre from 30 minutes before and after opening hours so this sees 97 hours per week. Entry & Membership Pricing The following table highlights the entry fees used for the base case financial model with the first year of entry programmed for 2013. It must be noted these are based on conservative estimates.

ACTIVITY AREA ENTRY FEE $ Health & fitness membership Joining Fee $40.00 Weights & Group Only $50.00 per/mth Full Centre $70 per/mth Casual Entry Adult $15.50 Concession $11.00 Older Adult $9.00 School/Kinder $8.00 Room Hire $30 per/hr Creche $3.80 Café $0.25, 80% penetration Retail $0.25, 50% penetration Note: Entry fees excludes GST and rounded off Management and Staffing Structure and Salary Rates A base management and staffing structure has been developed for the centre and includes new indoor management staff. A summary of key staffing positions and allocations by Equivalent Full Time (EFT) positions against average salary is listed below:

Gym Instructor x 0.5 FTE Group Fitness Instructor x 0.7 FTE Sales Co-ordinator x 0.5 FTE Creche Assistant x 1 FTE


All salaries used in the model are based on current BMCC pay scales & awards. Global Impact Assumptions The base case financial model has included the following global impacts across the 20 year business model based on the stage one centre opening in 2013 as it as first year of business. Please note pre-opening and start costs are not included in the base case at this stage but can be added if needed in future business models. • CPI Increases: Assumes range 2.0% yr 2 to 3.0% yr 5 therafter. • Business Growth: Assumes year 3 is 100% business, with base year at 80% and 90% at yr 2. Assumes year 1 is base year existing, real price growing 1% years 2 to yr 10. Assumes year 3 is base year, with business growing at 2% per annum years 3-5, and 1%

years 6-8 and 0% years 9-10. • Real Price Growth: Assumes 1.0% price increases from year 2 to year 10. •Expenditure Increases: Assumes annual expenditure increase of C.P.I as indicated, and associated expenditure as activity zones are introduced to the business plan. • Salary On Costs: Assumes annual on costs of 20% on all salaries. • Salary Increases: Allows for annual increases through CPI impact. • Pre Opening Expenses: $40,000 pre-opening expense allowance included at this stage. • Asset management and Replacement Allowances: Annual allowances of $62,500 for building depreciation ($2.5M @ straight line depreciation over 40 years) and $37,500 (base year 1) for asset management and renewals have been included in the 10 year operating budgets. Operational Expense Allowances New operational expenditure allowances at Base Year 1 include: 100% Increase +10% on current Non-Staff Total Centre Operational Expenditure, allocated

at 10% of Total Centre Expenditure, or approximately $55,000 $5,000 annual Equipment maintenance allowance 30% Increase current music costs, or $10,000 Additional, $5,000 Consumables Allowance for Creche Centre overheads cover centre management and services across the facility and these are apportioned back to relevant activity areas. Usage Projections The following key assumptions are included in the case 20 year business model.

Average visitations will be based on health & fitness participation market research findings, and current centre attendances & performance.

This will see an additional 90,000 visits to the centre.


Centre usage is broken up into casual, program and membership use. Usage growth is based on global inputs of demand with allowances for new

business establishment and then business consolidation.

13.2 FACILITY BUSINESS MODEL & SCENARIOS

The following section summarise the annual revenue, expenditure and nett profit/(loss) for the first 10 years of business, for the Expanded Health & Fitness Centre. Detailed business models are presented for each option in Appendix 1.

13.2.1 Base Case

The ten year annual business projections for Expanded Health & Fitness facilities are listed in the following table. Please Note: The base case model incorporates new business only.

Table 13.1 Base Case: Expanded Health & Fitness Centre

10 Year Business Projections

Y E A R S CATEGORY 1

($000) 2

($000) 3

($000) 4

($000) 5

($000) 6

($000) 7

($000) 8

($000) 9

($000) 10

($000)

AVERAGE PER ANNUM ($000)

Revenue 547 636 730 765 802 833 857 889 914 949 792

Expenditure 297 316 336 334 345 355 364 375 385 397 350

Nett Operating Profit/(Loss) 249 319 394 432 457 478 492 514 529 553 442

Nett Profit / (Loss) including Depreciation 149 219 294 332 357 378 392 414 429 453 342

The Base Case business plan projections indicate: Revenue is expected to increase annually ranging from $547,000 in Year 1 to $949,000 in

Year 10. Expenditure is expected to increase annually ranging from $297,000 in Year 1 to

397000 in Year 10. The expanded facilities are expected to operate at a nett operating profit for all ten

years of the business projections, ranging from $249,000 in Year 1 to $553,000 in Year 10. The expanded facilities are expected to continue to operate at a profit, when capital

depreciation & renewal cost allowances are included (ie $100,000 pa), ranging from $149,000 in Year 1 to $453,000 in Year 10.

Based on the 10 year business projections, the annual average per annum indicators are: Revenue: $792,000 Expenditure: $350,000 Nett Operating Profit/(Loss): $442,000 Nett Profit/(Loss) incl. Depr: $342,000


13.3 CAPITAL REPAYMENT & OPERATIONAL SUBSIDY CONTRIBUTIONS

This section identifies operating subsidy reduction and capital cost debt servicing capacity of the expanded facility business, in the advent that Council determines that it requires finance to raise the capital for future facility expansion as proposed. It is based on conservative scenario estimates in which Council borrows the full cost of the proposed development. The usage and financial performance results indicate that the centres new redeveloped area have a capacity to generate significant surpluses and therefore contribute to significant capital repayment of the improvements. The annual operating surplus is largely because many of the key operating expenses are already covered in the current facility operational budget. The redeveloped facilities are expected to generate nett surpluses, pre-cost of capital, as follows:

Y E A R S PROJECTED CENTRE PERFORMANCE 1

($000) 2

($000) 3

($000) 4

($000) 5

($000) 6

($000) 7

($000) 8

($000) 9

($000) 10

($000)



This sees an average annual surplus of around $342,000, to assist in reducing operational subsidies and servicing debt. Assuming, Council borrows the estimated capital cost of $2.5 M (2010 Pre-design Capital Lower Cost Estimate) this sees the following debt servicing capacity based on the following financing terms: Scenario 1: 15 year loan at 8% interest, this would see loan repayment of approximately

$292,000 annual repayment. Scenario 2: 20 year loan at 8% interest, this would see loan repayment of approximately

$254,000 annual repayment. A detailed spreadsheet is provided in Appendix 2. Based on these scenarios, this sees capacity within the projected operational surpluses to repay capital loan debt and residual capacity to reduce operational subsidies, in the order of $50,000 to $90,000 per annum. Should the capital cost be $3 M (2010 Pre-design Capital Upper Cost Estimate), and Council borrows the full amount, this would see a loan repayment of approximately $305,000 to $350,000 per annum, based a 20 and 15 year year loan respectively at 8% interest. Under this scenario, operational surpluses would cover cost of capital, but would not contribute to operational subsidies. The results confirm the need to undertake further more detailed design planning to confirm component schedule, capital costs and actual construction timeline to enabled development of a more detailed business plan. 13.4 BUSINESS SENSITIVITY ANALYSIS It is very difficult at feasibility stage to pin point exact operational financial performance, as this will be greatly influenced by:


Type of Management and Staffing System implemented Costs of labour Period of year when the proposed redeveloped Centre opens Level of charges introduced Final quality of fittings and finishes in the Centre. Capital cost repayments and loan servicing

To assist in reviewing the business impacts if centre use is lower than projected in the base case business plan, business sensitivity usage impacts have been developed for the base business case being: Optimistic Business Case: 10% increase price than the base case Conservative Business Case: 10% less use than the base case Very Conservative Business Case: 20% less use than the base case Summaries of the annual net profit/(loss) for both the Base Case Financial Model under the two business scenarios are detailed below.

13.4.1 Optimistic Case

Based on a price sensitivity of plus 10%, the ten year annual business projections for an Optimistic Case, are listed in the following table:

Table 13.2 Optimistic Case: Expanded Health & Fitness Centre



($000) 2

($000) 3

($000) 4

($000) 5

($000) 6

($000) 7

($000) 8

($000) 9

($000) 10

($000)


Revenue 591 687 788 827 867 901 926 962 989 1,027 857

Expenditure 297 316 336 334 345 355 364 375 385 397 350



The Optimistic Case business plan projections indicate: Revenue is expected to increase annually ranging from $591,000 in Year 1 to $1,027,000 in

Year 10. Expenditure is expected to increase annually ranging from $297,000 in Year 1 to $397,000

in Year 10. The expanded facilities are expected to operate at a nett operating profit for all ten





13.4.2 Conservative Case

Based on a demand sensitivity of less 10%, the ten year annual business projections for an Conservative Case, are listed in the following table:

Table 13.3 Conservative Case: Expanded Health & Fitness Centre



($000) 2

($000) 3

($000) 4

($000) 5

($000) 6

($000) 7

($000) 8

($000) 9

($000) 10

($000)


Revenue 494 575 660 692 725 753 774 804 827 858 716

Expenditure 288 306 324 321 332 342 351 361 371 382 338



The Conservative Case business plan projections indicate: Revenue is expected to increase annually ranging from $494,000 in Year 1 to $858,000 in







13.4.3 Very Conservative Case

Based on a demand sensitivity of less 20%, the ten year annual business projections for an Very Conservative Case, are listed in the following table:

Table 13.4 Very Conservative Case: Expanded Health & Fitness Centre



($000) 2

($000) 3

($000) 4

($000) 5

($000) 6

($000) 7

($000) 8

($000) 9

($000) 10

($000)


Revenue 442 514 590 619 649 673 692 719 739 767 640

Expenditure 279 295 312 308 319 328 337 347 356 367 325



The Very Conservative Case business plan projections indicate: Revenue is expected to increase annually ranging from $442,000 in Year 1 to $767,000 in







13.5 BUSINESS SCENARIO COMPARISONS

The following table compares the income, expenditure and operating surplus for the annual average performance for all four business plan scenarios using the base case, optimistic, conservative and very conservative business projections.

Table 13.5 Business Scenario Comparisons Expanded Health & Fitness Centre

10 Year Average Business Projections

CATEGORY OPTIMISTIC CASE ($’000)

BASECASE ($’000)

CONSERVATIVE CASE ($’000)

VERY CONSERVATIVE ($’000)

Income 857 792 716 640

Expenditure 350 350 338 325

Nett Profit/(Loss) 506 442 379 316

Nett Profit / (Loss) including Depreciation 406 342 279 216

A review of the business scenarios comparisons indicates in all cases the expanded health & fitness facilities area, is likely to operate at a profit, even when depreciation & capital renewal allowances are included (ie $100,000 per annum) ranging from 10 year average of $406,000 if 10% increased pricing is achieved than the base case model, to $216,000 if only 80% of Base Case demand is achieved. These operating results reflect the average range of results when compared to similar centres, with similar components, based on SGL knowledge and experience in the industry.

13.6 ALTERATE DEVELOPMENT OPTION

Following Council Officer Review of the first draft report, an alternate development option was requested, based on the development of Group Fitness program area expansion only at SALC. This Section summarises the base case & sensitivity analysis business performance outcomes for this alternate option. It is based on a development expansion floor area of approximately 200sqm, including:

120 sqm multi-purpose program room, allowances for new amenities & change, support admin & commercial

facilities & circulation. The exact floor areas to be confirmed through more detailed concept & development planning) and capital cost ranging from between $1,000,000 and $1,200,000 in 2010 dollars (excl. FFE, Cost Esc.,design variables, site condition & GST). This estimate includes the cost of carparking/landscaping & Outdoor Amenity, estimated at $300,000 (ie 50% of allocation for Fitness & Group Fitness Development Option, as estimated at Section 12.2) The same key business assumptions as expressed in Section 13.1 apply to the model, except where allowance were made for direct costs to the weights area. The comparative business results of the base case & sensitivity scenarios are summarised in the following table. Detailed Performance Summaries can be found in Appendix 1.


Table 13.6 Business Scenario Comparisons Expanded Group Program Only

10 Year Average Business Projections

CATEGORY OPTIMISTIC CASE ($’000)

BASECASE ($’000)

CONSERVATIVE CASE ($’000)

VERY CONSERVATIVE ($’000)

Income 460 421 382 305

Expenditure 236 227 219 210

Nett Profit/(Loss) 224 194 163 132

Nett Profit / (Loss) including Depreciation 174 143 113 81

A review of the Alternate Development Option business scenarios, for Expanded Group Program Area only, indicates in all cases the new areas is likely to operate at a profit, ranging from 10 year average of $174,000 if 10% increased demand is achieved than the base case model, to $81,000 if only 80% of Base Case demand is achieved, including depreciation allowances. These operating results would be able to service debt capital costs of up to $800,000 based on a 20 year loan and 8% rate terms, and based on the very conservative average business operating result of $81,000 pa.

13.7 CONCLUSIONS

The projected financial performance results indicate, under all options & business scenarios, that the extension of health & fitness facilities is likely to meet Council objectives in commissioning the study to firstly, assist in the management of overcrowding in the existing SALC centre and secondly, to reduce operational subsidies of the Springwood Aquatic Leisure Centre (current pa. average of $232,000 Pre-Council SLA Income) and across the BM Leisure Centre Group. Should Council, seek to fund the capital cost of the proposed developments through, operating profit, the results indicate capacity to service all, or at a minimum a large proportion of the loan, through operational profits, based on current conservative pre-design capital cost estimates & feasibility business planning. It must be acknowledged financing development costs through finance options will offset the benefits that could be derived through a reduction in operational subsidy benefits, and therefore should be considered as just one possible options and alternative options & cost benefits explored. The results confirm the need to undertake further more detailed design planning to confirm component schedule, capital costs and actual construction timeline to enabled development of a more detailed business plan.


1 4 R E C O M M E N D A T I O N S

The Consultant Team recommends Blue Mountains City Council review, consider and adopt the following project recommendations and actions: Recommendation One That the study findings clearly support the expansion of

health & fitness facilities at the Springwood Aquatic Leisure Centre Health & Fitness facilities as the priority development over the short to Medium term.

Action 1 Council confirm the proposed Leisure Centre Development Strategy as identified in Section 11 of this report.

Action 2 Council confirm the SALC facility expansion priority components identified in Section 12 of this report, as a basis for future more detailed design & capital cost planning.

Recommendation Two Subject to Council adoption of Lower Blue Mountains Leisure Centre development strategy & SALC priority facility re-development components that Council commence more detailed site development planning assessment as a matter of urgency, to address identified site constraints.

Recommendation Three That Council commence and identify a capital financing strategy for the Leisure Centre Facility Development Strategy.

Recommendation Four That Council appoint an experienced leisure facility

design and development team to complete facility concept & site master plan design, cost planning, construction programming and planning approval processes to enable Council to set a final development budget, construction timetable and funding strategy.

Recommendation Five That subject to the adoption and development of a preferred facility development option and concept, that Council undertake further feasibility and planning at the time of implemention.

Recommendation Six That Council develop an appropriate communication & involvement strategy, to ensure the community , current users and stakeholders are aware of Council directions & process.

Documents

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