Clubs con­cerned by bid to raise lease fees 30% Min­is­ter says rise fair

Mt Hotham Falls Creek - - FRONT PAGE -

MIN­IS­TER for En­vi­ron­ment and Cli­mate Change Ryan Smith has stunned Vic­to­rian re­sorts ski clubs and flat own­ers with his de­ci­sion to in­crease leas­ing charges by 30 per cent on ARC/VSA Leases.

The de­ci­sion was ad­vised to the Vic­to­rian Snows­ports As­so­ci­a­tion (VSA), with the min­is­ter cit­ing ad­vice taken from the Alpine Re­sorts Co­or­di­nat­ing Coun­cil (ARCC).

The ARCC is largely made up of Alpine Re­sort Man­age­ment Boards (ARMBs) mem­bers from all Vic­to­rian ARMBs, who are ap­pointed by the min­is­ter, and are re­spon­si­ble for col­lect­ing leas­ing rates and charges. There is no Alpine Com­mu­nity rep­re­sen­ta­tion on ei­ther ARCC or ARMBs.

The 30 per cent in­crease, to be back­dated to Novem­ber 1, 2013, is the max­i­mum per­mis­si­ble un­der the in­dus­try wide ceil­ing level as set out in the ARC/VSA lease agree­ment.

The 30 per cent in­crease is payable in full in the first year, and not phased in by in­stal­ments as has been the case in the past, and is in ad­di­tion to CPI in­creases.

The an­nounce­ment comes af­ter con­certed ef­forts on the part of Alpine Re­sorts Work­ing Group (ARWG), a com­mit­tee of the VSA and rep­re­sent­ing all re­sorts ratepay­ers and unit hold­ers, to work with the govern­ment in­clud­ing pro­vid­ing it with an ARWG funded con­sul­tant’s re­port pre­pared by Ernst and Young.

The E&Y re­port showed that the af­ford­abil­ity of ac­com­mo­da­tion has sig­nif­i­cantly re­duced and rec­om­mended that Alpine Re­sort Man­age­ment Boards (ARMBs) need more ro­bust gov­er­nance to clearly de­ter­mine fund­ing and ex­pen­di­ture.

Leas­ing costs are levied on clubs whose sites are val­ued ac­cord­ing to high­est and best use rather than per­mit­ted use.

The E&Y re­port stated that “The study has con­cluded that the ex­pi­ra­tion of the ARC – VSA agree­ment is likely to lead to a fur­ther re­duc­tion in the af­ford­abil­ity of ac­com­mo­da­tion in Vic­to­ria’s alpine re­sorts, par­tic­u­larly at not for profit en­ti­ties. These en­ti­ties will ei­ther need to sig­nif­i­cantly in­crease ac­com­mo­da­tion prices or with­draw ac­com­mo­da­tion. More gen­er­ally not for profit en­ti­ties op­er­at­ing out­side the agree­ment will also need to in­crease ac­com­mo­da­tion prices to cover grow­ing ser­vice charge costs.”

ARWG chair John Aird said his com­mit­tee had worked tire­lessly in re­cent years to high­light fi­nan­cially strug­gling re­sort ratepay­ers, unit hold­ers and small busi­ness.

“We have tried to con­vince ARMBs and the ARCC that clubs have al­ready cut costs to the bone and there is no room to ac­cept in­creased rates and ser­vice charges levied by the RMBs,” he said

VSA pres­i­dent Rob An­der­son said there re­mained a per­cep­tion that ski clubs are for the well-off, whereas in fact they ex­isted be­cause they pro­vide af­ford­able ac­com­mo­da­tion for ski en­thu­si­asts and fam­i­lies to use the re­sorts.

“Re­cent in­dus­try data shows Vic­to­rian snow sports con­sumers are mak­ing shorter du­ra­tion trips to re­sorts, head­ing over­seas in in­creas­ing num­bers for cheaper hol­i­days and not vis­it­ing re­sorts as reg­u­larly as they have in the past be­cause of the high costs,” he said

“The time has come for the govern­ment to find an­other model of re­sorts fund­ing or there will be se­ri­ous con­se­quences for the in­dus­try, tourism and re­gional Vic­to­ria...mar­ket fail­ure is on our doorstep.”

MIN­IS­TER Ryan Smith has re­futed the im­pact lease changes will have, sug­gest­ing there is a fair bit of “scare­mon­ger­ing” go­ing on.

“A mi­nor­ity of sites are cov­ered by an out­dated agree­ment signed in 1990 that does not take in cur­rent mar­ket con­di­tions,” he said.

“For more than 24 years, a small num­ber of alpine lodges have been pro­tected by this agree­ment and have en­joyed cheaper rent.

“In con­trast the ma­jor­ity of alpine lodges have paid mar­ket rent, di­rectly sup­port­ing the con­tin­ued work of each re­sort,” he said.

“These small mod­i­fi­ca­tions will en­sure that there is a fairer price struc­ture for all alpine re­sorts.”

LAT­EST TECH­NOL­OGY: Falls Creek Am­bu­lance Ser­vice team man­ager David Llewellyn with the new Mercedes-Benz am­bu­lance.

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