Council makes tough calls as it looks to lower rates in Central Otago
29 May 2020
The Central Otago District Council has announced today a restructuring of its i-SITE service delivery.
These changes will include permanently closing its i-SITE visitor centre in Alexandra, closing Council's i-SITE in the Cromwell Mall and relocating Cromwell i-SITE services to be delivered by a private vendor, and rationalising service delivery in Ranfurly. The service provided in Roxburgh will continue under its current arrangements.
As a result of the announcement eight permanent staff have been made redundant. A further role that was temporarily filled was also disestablished.
Council CEO Sanchia Jacobs said "decisions like this are never made lightly, but in the current environment, and as part of supporting our Council's commitment to lower the rates burden in Central Otago, tough decisions have had to be made".
"Our i-SITE staff are the friendly human face that greets visitors to Central Otago and helps locals connect to a range of services. At their core, they are the people that help others navigate our beautiful piece of paradise. When i-SITES closed due to the COVID-19 lockdown, many of the staff affected by this decision stepped up to help our civil defence function deliver welfare needs to the community - dealing with situations well outside their normal duties with absolute integrity and heart. Today's decision has a very personal impact on these people that have so graciously served their community," said Ms Jacobs.
In December 2019 Tourism Central Otago conducted a review of its i-SITE operations to ensure the service was fit for purpose and met the future needs of tourism in Central Otago. The review looked into the commercial viability of i-SITEs given their decreasing revenue generation over the last five years, and as more and more people use online resources for gathering information and making bookings.
The commercial viability of those operations has taken a further hit as a result of COVID-19, with visitor numbers predicted to take five years to recover. The i-SITES had all closed during lockdown, and it was already estimated that they were unlikely to reopen until October 2020. That is when the traditional demand for their services typically picks up, and was when domestic travel was predicted to be normalised.
Recognising the heavy rates burden the i-SITEs were imposing on Central Otago ratepayers, the Council directed staff to take the necessary steps to consider closure of i-SITEs as a bid to lower the rates burden for Central Otago ratepayers.
The financial impact of the closures and rationalisation of services is a saving to rates of about $340,000 - decreasing district wide rates by approximately 1% in this move alone.
While i-SITE bookings generate revenue for business, more than 60% of the accommodation, activity and transport revenue from i-SITE bookings through the Alexandra and Cromwell i-SITEs goes to businesses outside of Central Otago.
Central Otago Mayor Tim Cadogan said the bottom line was that in Central Otago i-SITEs were costing the ratepayer far more to run than the revenue they generate.
"With the significant decreases forecasted in revenue, the cost to ratepayers to continue the service would further increase. We had to take that seriously," he said. "The good news is that the services will still be offered to the community, albeit in a different way."
Based on that reasoning, the proposal put forward to Council, consulted on with affected staff and now confirmed includes the following closures and rationalisation of i-SITE services:
- The Cromwell i-SITE will close permanently at its current location in the Cromwell Mall at the end of June and will not reopen under Council management. Council is in negotiations with The Gate hospitality complex to take over i-SITE services by August. Four Cromwell i-SITE roles will be disestablished.
- The Alexandra i-SITE will close permanently and vacate the Central Stories building at the end of the June. The intention is to pass services previously provided by the i-SITE over to a private vendor/vendors and, if needed, in the short-term provide limited basic services through the Alexandra Council Service Centre. Three Alexandra i-SITE roles will be disestablished.
- Ranfurly i-SITE to resume full service from October 2020, or earlier if demand requires it. Some operational refinements will be made to match activity with demand. Future opportunities will be investigated to develop a shared service or partnership model. One Ranfurly i-SITE role will be disestablished.
- Roxburgh i-SITE, which already operates under a shared service model (library, customer services and visitor information) has resumed i-SITE services.
- The centralised i-SITE Manager role will be disestablished at the end of June. All i-SITE management functions become the responsibility of one team leader from either the Ranfurly or Roxburgh i-SITEs.
Tourism Central Otago General Manager Dylan Rushbrook said it had been hard news to deliver to staff.
"The hardest part in all of this is knowing that these team members have done an outstanding job for us, many for a long period of time. But times have changed, and the i-SITE model was being seriously challenged prior to COVID-19. The events of the last few months and the ongoing closure of international borders simply means i-SITEs nationwide will be making some tough calls in the coming months. We are aware the services i-SITEs provide to our community is critical for many, and so in undertaking these measures we are committed to finding alternative vendors to continue supplying those essential services such as bus and event ticketing. We want to be very clear, essential i-SITE services will still be delivered in the community, it just won't be solely delivered by the council."
Ms Jacobs said that as a public entity Council has an obligation to ensure its people are gainfully employed and "this just isn't possible for our i-SITEs given the impact of Covid-19 to the tourism sector".
"We also have to ensure we are effectively using every single ratepayer dollar to support our local economy. We know these are incredibly challenging times for many in our community and we have worked hard to look at ways we can lessen the impact of rates increases."
In recent weeks the Council has taken an already 'no frills' budget that had the district facing a 4.9% average rates increase down to just below 1% by looking at alternate funding mechanisms and deferral of costs. The Council will confirm the final rates package at its meeting on 3 June 2020.