Naracoorte Lucindale Council, Agenda 26 September 2017 Page 1 16.1 Naracoorte & Districts Hockey Association – Request for Community Loan and Support for Grant Application File Reference: Responsible Officer: CEO – Helen Macdonald Strategic Outcome: Harmony and Culture • Healthy and resilient community Financial Implication: 2017-18: $100,000 Future years: Investment Income based on applicable cash advance rate (approximately 3.75%) Risk Assessment: Inability of Club to service loan. Personal guarantees to service loan repayment will be provided by Club members. Reduction of Council’s cash flow requiring Council to incur borrowing costs. Borrowing costs will be offset by the interest payments received from the Club. REPORT The Naracoorte & Districts Hockey Association advises that it is planning to upgrade its playing green and repair and develop the surrounding areas of the green at a cost of approximately $613,158. The aim of the project is to develop a modern all weather hockey facility within the Naracoorte Lucindale area that can service the playing needs of its members and of those in surrounding areas. A copy of the proposal is attached. The Club has prepared a grant application for the Office of Recreation and Sport for its Sporting Surfaces Program. The Club is seeking $455,000 from the grant. Should the grant application be successful, the Club is seeking Council support to fund $100,000 of the project, via a self-servicing community loan. The Naracoorte & Districts Hockey Association will contribute the remaining $61,000. The Hockey Club occupies Crown land, under Council’s care and control at the Naracoorte Sports Centre at 2 Playford Drive. The land is leased by the Naracoorte & District Sports Centre Inc until 2034. The grass fields at Naracoorte has served the Club well over a long period of time, however playing on grass fields no longer provides the surface required to develop both individual and team skills to the level required for state or international level. The NDHA has a history of local player and umpires representing both the state and country, however if players wish to do this in the future then they will have to leave the association. No state or international tournaments are played on grass. Indeed, even junior tournament finals are no longer played on grass. Especially in winter the current grounds become muddy making structured play impossible, umpiring difficult and due to the crowding of players increases the potential for injury.
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Naracoorte Lucindale Council, Agenda 26 September 2017 Page 1
16.1 Naracoorte & Districts Hockey Association – Request for Community Loan and Support for Grant Application
File Reference:
Responsible Officer: CEO – Helen Macdonald
Strategic Outcome:
Harmony and Culture • Healthy and resilient community
Financial Implication:
2017-18: $100,000 Future years: Investment Income based on applicable cash advance rate (approximately 3.75%)
Risk Assessment:
Inability of Club to service loan. Personal guarantees to service loan repayment will be provided by Club members.
Reduction of Council’s cash flow requiring Council to incur borrowing costs. Borrowing costs will be offset by the interest payments received from the Club.
REPORT The Naracoorte & Districts Hockey Association advises that it is planning to upgrade its playing green and repair and develop the surrounding areas of the green at a cost of approximately $613,158. The aim of the project is to develop a modern all weather hockey facility within the Naracoorte Lucindale area that can service the playing needs of its members and of those in surrounding areas. A copy of the proposal is attached. The Club has prepared a grant application for the Office of Recreation and Sport for its Sporting Surfaces Program. The Club is seeking $455,000 from the grant. Should the grant application be successful, the Club is seeking Council support to fund $100,000 of the project, via a self-servicing community loan. The Naracoorte & Districts Hockey Association will contribute the remaining $61,000. The Hockey Club occupies Crown land, under Council’s care and control at the Naracoorte Sports Centre at 2 Playford Drive. The land is leased by the Naracoorte & District Sports Centre Inc until 2034. The grass fields at Naracoorte has served the Club well over a long period of time, however playing on grass fields no longer provides the surface required to develop both individual and team skills to the level required for state or international level. The NDHA has a history of local player and umpires representing both the state and country, however if players wish to do this in the future then they will have to leave the association. No state or international tournaments are played on grass. Indeed, even junior tournament finals are no longer played on grass. Especially in winter the current grounds become muddy making structured play impossible, umpiring difficult and due to the crowding of players increases the potential for injury.
Naracoorte Lucindale Council, Agenda 26 September 2017 Page 2
The existing grass surfaces are an outdated surface for hockey. Grass surfaces are not conducive to a high standard of play, and leads to a more dangerous environment. All other infrastructure required to support a synthetic pitch is already in place. For example, competition level lighting, clubrooms, canteen, undercover viewing area, toilets, playground, shedding, two other grass fields and plenty of carparking. Still playing on grass means that NDHA is handicapped in competition and in teaching the skills the game now requires. The Club has achieved StarClub recognition which means the club has a strategic plan and has completed all the requirements of the program such as policies, financial management and coaches and officials work alongside valued volunteers in a safe and welcoming environment. The field is used by 230 participants for the winter hockey season and is also used for the Naracoorte High School Winter Pre-season training for football, netball and in School Sports Program (total number 335 students use these grounds), Naracoorte Netball Association use for fitness pre winter season (total numbers 80), rugby uses ground for fitness training (total 40 numbers). Soccer uses the ground for fitness training (total number 40 approximately). The field is also used for Summer hockey and the Junior Academy for high performing under 13 players 40 players (Tatiara and NDHA combined) across Summer months, school Upper South East SAPSASA Hockey participants and three local primary schools use these grounds in their School Sports Programs. As Members are aware, it is not this Council’s practice to provide interest free loans. The current Local Government Finance Authority (LGFA) cash advance rate is 3.75% (as at 11 September). The annual repayments on a loan of $100,000 over a fifteen-year period at this rate will be approximately $8,800 per annum. By establishing the loan with a floating interest rate it provides the Club with some flexibility in terms of repayments and the ability to repay the loan early if they wish. A loan agreement in this instance may be established with a fixed principal payment twice per year plus interest or alternatively a fixed payment amount with a reducing principal. The Club will repay the loan as a result of fundraising from hiring its clubrooms (estimated to increase by $30,000 due to the construction of new clubrooms), food and beverage sales, user pay charge of $6 per player, sponsorship and other fundraising activities and savings and interest earnt on a $92,000 term deposit. Council’s self-servicing loan commitment as a percentage of rate income is currently 4.18% following full drawdown of previously approved loans. If Council was to grant a loan of $100,000 to the NDHA, it would increase this percentage to 5.16%. Council guidelines have traditionally been a limit of 4% of general rate for community loans, however this rate has not been reviewed for many years. It is suggested that due to Council’s present cash flow position that, subject to Council’s acceptance, the loan is provided direct from Council as opposed to being established with the LGFA.
Naracoorte Lucindale Council, Agenda 26 September 2017 Page 3
The Club has the support of Hockey SA and the Naracoorte & District Sports Centre Inc. The Club is also working with the Naracoorte Tennis Club so the surface may be used for tennis in the Summer months.
Further to NDHA seeking Council support in the form of a loan the grant application must evidence written support from Council and the landowner which in this instance is Council.
Members may view the financial statements of the Club by contacting Council’s CEO.
Representatives of the Club will attend the Council meeting and be available to answer questions from Council.
REFER TO ATTACHMENTS 16.1
Letter from NDHA Proposal for the Development of an Artificial Hockey Turf
RECOMMENDATION
MOVED CR SECONDED CR
That subject to Ministerial and development approval (if required) Council gives consent for the Hockey Precinct Project to be undertaken at 2 Playford Drive, Naracoorte and that Council provides written support for the project by completing the Office for Recreation and Support Project Support Form.
RECOMMENDATION
MOVED CR SECONDED CR
1. That subject to the Naracoorte & Districts Hockey Association receiving agrant from the Office of Recreation and Sport Sporting Surfaces Programa loan of up to $100,000 is provided to the Naracoorte & Districts HockeyAssociation to upgrade its playing green and repair and develop thesurrounding areas of the green, subject to members of the Club providingpersonal guarantee to underwrite the loan repayment should the Club beunable to service its commitment.
2. That the Chief Executive Officer or Director Corporate Services isauthorised to negotiate the terms of the loan subject to the maximum termof the loan being 15 years with two repayments required per annum.
3. That the Chief Executive Officer or Director Corporate Services isauthorised to sign any documents relating to the provision of loan funds.