Hanmer Springs Thermal Pools and Spa Overview
The Hanmer Springs Thermal Pools and Spa group of activities includes the recreational and thermal pools, beauty spa, information centre ( i-site) and the café on the thermal pools reserve site.
Our Aim We aim to be recognised as the premier Thermal Pool and Spa complex in Australasia. Why is the Council Involved?
The Hanmer Springs Thermal Pools and Spa (HSTPS) was vested by the Crown in the Council and made a recreational reserve on 23 November 1990. We operate the HSTPS under the provisions of the Reserves Act 1977. As well as providing facilities for the social and recreational use of residents, the HSTPS makes an important contribution to the local economy by attracting regional, national and international visitors to the district. The HSTPS provides a substantial revenue stream to the Council and has made an important financial contribution toward the funding of other reserves in the district through the profits generated. As a result, the pools and spa complex has reduced the rates which would ordinarily be paid by the ratepayer.
Community Outcomes
The Hanmer Springs Thermal Pools and Spa activity described in this section, primarily contributes to two of our community outcomes: 1. A place with a thriving local economy: -
We are seen as a good place to do business, to live and to visit
2. A place where our traditional rural values and heritage make Hurunui unique: -
People have a range of opportunities to participate in leisure and culture activities
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Our historic and cultural heritage is protected for future generations
Council Owned Assets
We own all of the pools, equipment, buildings and recreational items on the thermal complex. These are listed below: - 17 thermal pools and associated stream -
6 private pools
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2 steam rooms
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2 sauna rooms
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25 meter freshwater pool with adjoining lazy river
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children’s activity pool and children’s aqua play area
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3 water slides
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day Spa (The Spa at Hanmer Springs)
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café (The Garden House Café)
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visitor information centre (the i-site)
Current Situation
The HSTPS is one of New Zealand’s premier tourist attractions. Each year over 500,000 customers visit the thermal pools to bathe in the waters, enjoy the water activities and partake in massage and beauty treatments. The Visitor Information Centre (i-site) forms part of the complex as does the Garden House Café. The complex has undergone substantial renovations over the last several years to ensure it remains a top class attraction for not only our local residents, but national and international visitors. HSTPS is operated as a profitable business and funds generated are used to augment the maintenance, development and promotion of the complex, with surpluses produced being used to assist funding of other reserves in the district. We have a dedicated Council committee to oversee the running of the complex and attend to the long term direction and planning of the pools complex and surrounds. The Committee membership comprises of the Mayor, three elected members of the Council, one Hanmer Springs Community Board member and two independently appointed representatives. The independent members act in a similar manner to directors and hold the positions as Chair and Deputy Chair of the Committeee.
Plans for the Future
The HSTPS strategic plan confirmed in 2014 sets out a continuous programme to upgrade and continues to invest in the complex. To continue to get good returns from the pool and make sure it is a desirable asset into the future, the complex needs to maintain or improve its good condition to maintain its lead in the industry. Therefore it is essential that we have on-going plans which include upgrades for the future. The HSTPS is a competitive business and the plans are commercially sensitive. This is a challenging aspect for the Council to on the one hand, to be open and transparent, but on the other, to manage the commercial sensitivities without giving our competitors (current of future) an advantage by disclosing plans that have yet to materialise. The HSTPS Management Committee has put forward a proposal to develop the Chisholm Ward on the Queen Mary Historic Hospital Reserve adjacent to the thermal complex. There is no funding put aside for this possible venture and at this stage, is only a concept. Despite there being a strategic plan in place, the projects and expenditure are all proposals and conceptual at this stage. Before any are confirmed, the financial feasibility of each of them is done which takes into account the financial position of the HSTPS and the Council, and the economic situation nationally and globally to make sure they are affordable and sustainable. After that has been done, initial approval of each project or undertaking is approved by the Management Committee before finally being approved by the Council.
Major Projects Planned Project
Year Planned 2015/16
Pool improvements
2016/17
2017/18
2018+
$3,000,000
Water treatment upgrade
$500,000
Hexagonal pool revitalisation
$1,052,600
Funding Activity HSTPS
Operational Costs 100% user charge as per the HSTPS fee schedule for use of the facilities by the
Capital Costs Replacement of existing assets and expenditure on new assets are funded
users.
through an internal loan from the Council in accordance with the Internal Financing Policy. The Council charges the HSTPS an interest rate of 2% above the Council’s external borrowing rate. The additional interest derived from the internal financing to the HSTPS ($20,000 per $1 million of borrowings) provides a good return for the Council that contributes toward lower rates. Loans are serviced by HSTPS from a portion of the profits derived from the activity. The amount of depreciation that is charged is also used to repay debt.
Use of income derived from HSTPS
HSTPS is situated on a Recreation Reserve which has been vested in the Council under the Reserves Act 1977. Under the Reserves Act, the Council is only able to apply any surpluses (profits) derived from the HSTPS to other reserves administered by the Council. The Council actively uses these surpluses to either fully or partially fund the costs relating to other district reserves, cemeteries, public toilets, and as the district library (Hurunui Memorial Library) has been built on a reserve, the costs associated with the library function is also subsidised by the profits from the HSTPS. HSTPS has been going through an expansion and improvement programme since 2010 funded through an internal loan. The interest on the loan charged to the HSTPS by the Council creates a distinct flow of income from the use of the funds that the Council is investing. This income is able to be used differently to that of the profits from the HSTPS. As a result, we now have two distinct streams of income generated from the Pools and Spa operation: 1.
one from internal interest, which the Council uses to offset General Rates (in accordance with the Council’s funding policies)
2.
the other being on-going profits which are used to fund costs relating the reserves (as per the provisions of the Reserve Act 1977).
Maintenance and Operating
The HSTPS is 100% owned by Council and this is intended to continue. The day to day operation of the complex is done by staff overseen by an appointed general manager. The in house operations team runs the thermal pools complex including the machinery that operates the pools. The computers and general IT are maintained and programmed by our council staff. The pools and plant are maintained to a very high standard to minimise the risk of failure or poor performance. A maintenance programme is in place and is budgeted for annually. This is important in order for us to be competitive with other leisure activities available to people.
Assumptions and Risks
It has been assumed that the HSTPS complex will continue to attract national and international visitors, and continue to rate as a national icon. It is conservatively assumed that the HSTPS’s revenue will increase due to predicted increases in price and some increase in patronage. Profit
margins are based on improvements to the complex being completed on time. Sales revenue has been forecast conservatively, taking into account present tourism trends and challenges, and the projected outlook for the domestic economy, especially in the immediate years. The risk to Council of borrowing money to fund capital works for the HSTPS is that should it not be able to return the anticipated profit we would be liable for the debt and would need to pass this on to ratepayers. The risk is considered low as the HSTPS has performed consistently and based future predictions of surpluses on assumptions taking into account tourism trends nationally and domestically, as well as the national economy.
Significant Negative Effects
This activity attracts significant numbers of tourists into the township. An increase in tourism and hence, people to the area, results in an increase in waste, air and noise pollution, traffic, and pressure on water and sewerage schemes as identified previously. The popularity of Hanmer Springs has created an increase in the cost of housing and competition to local businesses, and thus impacted on the local community. Those who have lived in and around Hanmer Springs for many years have seen significant growth in Hanmer Springs and changes to the original rural identity. The challenge for sustainable management will be to channel some of the undeniable benefits to economic development from this activity into initiatives that compensate for these negative effects and maintain our ideal of district and community wellness.
Emergency Management
In an emergency, particularly a civil defence emergency, we will continue to deliver services as long as it is safe and practical to continue to do so. Civil defence management plans provide the Council with guidance and contingencies. However, in an extreme emergency, the Thermal Pools and Spa is not considered in this context to be an essential service, but has its own plans in place to cope with emergency situations.
Financial Summary
A financial summary for this group of activities is shown in a separate document.
Hanmer Springs Thermal Pools & Spa Performance Measures Community Outcomes 1. A place with a thriving local economy 2. A place where our traditional rural values and heritage make Hurunui unique Key Performance Area
Performance Measure Description
Local, national Measure of the and international numbers of visitors customers to the thermal pools and spa, and their satisfaction ratings. Profitability of the thermal pools and spa complex
Performance Target Issue
Performance Target Outcome
Performance Measurement Method
Current Performance
Customer satisfaction
Maintained or improved
Annual customer satisfaction survey.
To be completed
Customer numbers
Maintained or more than the annual projected growth
The total number of To be completed customers as per the HSTPS electronic records.
Measurement of Profit results compared to the Council approved business plan.
Profit budget is As recorded in the met or exceeded. Council’s financial accounting system (NCS).
To be completed
Measurement Period: All of the performance measures will be measured annually and reported in the Council’s Annual Report each October.
