BOGGABRI CARAVAN PARK BUSINESS PLAN - 2008 Adopted by Council – 9 September 2008 (614/2008)

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CONTENTS

1.  INTRODUCTION ............................................................................................................... 4 1.1  Background ................................................................................................................. 4 1.2  Business Plan ............................................................................................................. 5 1.3  Study Tasks ................................................................................................................ 5 1.4   Disclaimer ................................................................................................................... 5  2.  BOGGABRI CARAVAN PARK ....................................................................................... 6 2.1   Location ...................................................................................................................... 6 2.2  Property Title & Description ........................................................................................ 6 2.3  Boggabri Caravan Park - Lots 6, 7, 8 (part) ................................................................ 9 2.4  Other Reserve Uses ................................................................................................. 11 2.5  Management ............................................................................................................. 11  3.  PRESENTATION & PERFORMANCE OF THE CARAVAN PARK ................................. 12 3.1  Presentation .............................................................................................................. 12 3.2  Compliance ............................................................................................................... 13 3.3   Use of Boggabri Caravan Park ................................................................................. 13 3.4   Fees .......................................................................................................................... 15 3.5   Financial Performance .............................................................................................. 16  4.  STRENGTHS & WEAKNESSES ..................................................................................... 18  5.  DEVELOPMENT CONCEPTS ......................................................................................... 20 5.1   Option 1 .................................................................................................................... 20 5.2   Option 2 .................................................................................................................... 23  6.  MARKET ASSESSMENT ................................................................................................ 27 6.1.  Current Demand for Accommodation in Boggabri .................................................... 27 6.2.  Caravan Park Markets - North West Region ............................................................ 28 6.3.  Trends in the Caravan Market .................................................................................. 29 6.4   Potential Markets for Boggabri Caravan Park .......................................................... 31 6.5.  Likely Level and Pattern of Visitation ........................................................................ 34  7.  PRELIMINARY FINANCIAL ASSESSMENT ................................................................... 36 7.1  Limitations of the Financial Information .................................................................... 36 7.2  Development Concepts ............................................................................................ 36 7.3  Preliminary Development Cost Estimates ................................................................ 36 7.4.  Preliminary Operating Forecasts .............................................................................. 39  8.  MANAGEMENT OPTIONS .............................................................................................. 50 8.1.  Current Management ................................................................................................ 50 8.2.  Additional Management Requirements ..................................................................... 50 8.3  Management Examples - Small Caravan Parks ....................................................... 51 8.4.  Management Options for Boggabri Caravan Park .................................................... 52  APPENDICES ......................................................................................................................... 53 Appendix 1 .............................................................................................................................. 54 

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 1. INTRODUCTION

1.1 Background In 2007 Narrabri Shire Council resolved to upgrade and possibly extend the Boggabri Caravan Park to enable the Park to more effectively meet the need for accommodation for visitors to Boggabri and people coming into the town to work and live. Boggabri Caravan Park is a very small caravan park (12 powered sites), located in Laidlaw Street Boggabri. The Caravan Park is part of a Crown Reserve (R81842), with the Reserve also incorporating the Boggabri Swimming Pool and a parcel of non-improved open space (hereafter referred to as the Open Space). Narrabri Shire Council is Trustee for the Reserve. Until 2000, the Caravan Park attracted minimal use, catering for a few long term residents and the occasional visitor. With the opening of coal mines in the Boggabri area, the use of the Park has increased, with the long term sites attracting a very high level of use during the mine construction phase. In addition, the Park Manager is receiving enquiries (primarily from mine-related visitors) for self-contained cabin accommodation. Further coal mines are proposed for the Boggabri area, with mining in the area having an expected life of 50 to 60 years. A study, commissioned by Narrabri Shire Council into the potential impacts of coal mining on the Shire, (Assessment of Opportunities for Narrabri Shire from Coal Mining & Gas Extraction in the Gunnedah Basin, 2007), identified the need for additional short, medium and long term accommodation in Boggabri to meet the needs of mine related workers and visitors. The Narrabri Shire Tourism Development and Marketing Plan (2007) also identified a need for additional accommodation in Boggabri to cater for mine related visitors, travellers and visitors coming into Boggabri for events. Both studies recommended that Council explore opportunities for upgrading and extending the Boggabri Caravan Park, including providing self-contained onsite cabin accommodation and camping sites. Council, as Trustee, has discussed the proposal to upgrade and expand the Caravan Park with the Reserve owner, the NSW Department of Lands. In August 2007 the Department of Lands advised Council to prepare a Plan of Management and Business Plan for the Reserve to provide the planning framework for the proposed changes. In November 2007 the Department of Lands provided ‘Approval in Principle’ to upgrade and extend the Caravan Park, subject to a number of conditions. Narrabri Shire has prepared a Plan of Management for Reserve. The Plan acknowledges the social and economic contribution of the Boggabri Caravan Park to the local community. The Plan supports the retention and upgrading of the Caravan Park, with options to expand the Park, if required. Council's stated aims and objectives for the Caravan Park are: 1. To improve the presentation of the Park and upgrade facilities for the benefit of both the long term

residents and visitors to Boggabri. 2. To continue to provide low cost accommodation options for people wanting to reside, either

permanently or temporarily in Boggabri. 3. To increase the range of visitor accommodation available in Boggabri. 4. To increase the economic benefits to the Boggabri community by building visitation to the Caravan

Park. The Plan of Management is available from Narrabri Shire Council and can be down-loaded from Council's website www.narrabri.nsw.gov.au

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1.2  Business Plan  The Business Plan addresses the performance and management of Boggabri Caravan Park, assesses the demand for additional accommodation and explores the options to expand the Park.

1.3 Study Tasks The tasks undertaken in the preparation of the Business Plan included: Inspection of the Caravan Park and adjoining Reserve areas.

Review of relevant studies and information on Boggabri and surrounding area, including the

Assessment of Opportunities for Narrabri Shire from Coal Mining & Gas Extraction in the Gunnedah Basin, 2007, and the Narrabri Shire Tourism Development and Marketing Plan (2007).

Discussions with

- Boggabri Caravan Park Overseer. - Manager of the Boggabri Swimming Pool. - Council Officers responsible for the management and operation of the Park. - Boggabri Business Promotions Association. - Councillor on Narrabri Council from Boggabri. - Department of Lands Officers responsible for the Reserve and for caravan parks on Crown

land. - Representatives from the Coal Mining companies based in Boggabri regarding possible use of

the Boggabri Caravan Park. - Manager, Boggabri Motel regarding the demand for accommodation in Boggabri. - Tourism Managers in Narrabri, Gunnedah and Moree Plains Shires regarding the caravan

market travelling through the North West Region. - Managers / operators of caravan parks in Gunnedah, Moree Plains, Narrabri, Gwydir and

Inverell Shires regarding the caravan park markets and trends in the marketplace. - Managers of caravan parks in the Upper Hunter region to explore use of caravan parks by

coal-mine employees and mine related visitors. - Integrated Site Design - consultants specialising in the design and operation of caravan parks.

1.4 Disclaimer This Plan has been prepared by Jenny Rand & Associates (JRA) for Narrabri Shire Council. The information used in this report is primarily qualitative and provided by third parties. JRA has accepted this information in good faith and no representation or warranty is given by JRA as to the accuracy of this information. As the performance of any accommodation property is subject to a range of factors including the design, product quality, the economic climate, the competitive environment, the capability of the operator and unforeseen factors, JRA does not warrant that the market and performance findings of this report will be achieved. JRA also provides no warranties or undertakings of any nature with respect to a decision by Narrabri Shire Council, or any other party, to lease or purchase the property or to build, own, operate or fund the project, nor as to the financial, economic or other results which may be obtained by Council or other parties as a result of any such decision.

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2. BOGGABRI CARAVAN PARK

2.1 Location Boggabri Caravan Park is located in Laidlaw Street Boggabri. The Park forms part of Boggabri Reserve (Reserve 81842). The Reserve has frontage to Laidlaw Street to the west, Caxton Street to the north, Clare Street to the south and Lynn Street to the east. Laidlaw, Caxton and Clare Streets are sealed. Lynn Street is an unformed road which is currently marked by a vehicular track. The Caravan Park is accessed from Laidlaw Street. The Reserve is well located within Boggabri. It is approximately 150 metres south of the Boggabri Post Office and is within a few minutes walk of the town’s main facilities and services - the shopping centre, RSL Club, public and catholic primary schools, the hospital and the town's main sporting facilities.

2.2 Property Title & Description Boggabri Reserve was gazetted in August 1959 for the purposes of Public Baths and Public Recreation. The Reserve was acquired as freehold land under the Public Works Act. The Reserve is managed by the Boggabri Reserve Trust (R81842), with the Trusteeship vested in Narrabri Shire Council. Narrabri Shire Council is responsible for the care, control and maintenance of the Reserve. The Reserve has an area of approximately 1.6403 hectares and incorporates Lots 1, 2, 3, 6, 7, 8, 9 and 10 in Section 15, Deposited Plan 758128, in the Parish of Boggabri, County of Pottinger, within Narrabri Shire. Each lot has approximate dimensions of 40m x 50m. The Reserve is divided into three sections: Open Space - Lots 1, 2 and 3 Boggabri Caravan Park - Lots 6, 7 and 8 (part) Boggabri Swimming Pool - Lots 8 (part), 9 and 10

The approximate dimensions and area each of these sections are: Section Approximate Dimensions Approximate Area Boggabri Caravan Park 112m x 50m 5600sqm Open Space 120m x 50m 6246sqm Boggabri Swimming Pool 88m x 50m 4400sqm Lots 1, 2 and 3 are separated from the other lots by a laneway. This laneway is a Crown public road reserve and not incorporated in the Boggabri Reserve. The laneway has never been open or used for access. The laneway is approximately 7.02m wide. The area occupied by the laneway within the boundaries of the Reserve is approximately 1400sqm of which approximately 893sqm adjoins the Open Space area. The Open Space and the laneway (area adjacent to the open space only) have a combined area of approximately 7088.9sqm. Likewise, Lynn Street along the eastern edge of the reserve has never been developed as a road. There is a rough vehicular track along part of the road reserve. That part of the Lynn Street Road Reserve adjacent to the Open Space has an area of approximately 3,000sqm. The Department of Lands has advised Narrabri Council that if additional land is needed for the expansion of the Caravan Park, Council should make application to close the laneway and /or that part of Lynn Street which adjoins the Reserve.

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Boggabri Image Overview

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DP 758128

The approximate area and dimensions of the Open Space area and adjoining road reserves is: Portion Approximate Dimensions Approximate Area Open Space 50m x 120m 6246sqm Adjoining Laneway Road Reserve 7.02m x 120m 843sqm Adjoining Lynn Street Road Reserve 25 x 120m 3000sqm Total Area 82 x 120m 10089sqm

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2.3 Boggabri Caravan Park - Lots 6, 7, 8 (part) Boggabri Caravan Park is located on the southern half of the reserve, on the corner of Laidlaw and Clare Streets, with access from Laidlaw Street. The Park has approval to operate as a caravan park under Section 68 of the Local Government Act, with the Approval due to expire on 30 May 2012. The Caravan Park is designated as a 'General Park' in accordance with the Crown Lands Caravan Park Policy 1990. The Park has twelve (12) sites, ten (10) of which are designated and approved as long term sites, with the remaining two (2) being short-term sites. There are no on-site cabins or vans, holiday vans or designated camp sites. There are also no drive-through caravan sites, with all sites requiring caravans to be backed onto the pad. The caravan sites are arranged along the eastern and western boundaries of the site, and accessed from a central, internal road. This road has recently been sealed and has sufficient width to enable caravans to be backed and turned. There are no sites at the northern and southern ends of the Park, with these areas being grassed. Shade trees have been planted around the perimeter of the Park, with these providing an attractive frontage to Laidlaw Street. Each caravan site has a concrete pad for the caravan plus an adjoining ensuite building which contains a toilet and shower. The ensuite buildings have been constructed on the 'wrong' side of the concrete pads, with the caravan occupant having to walk around the van to access the ensuite. None of the ensuite facilities provide disabled access. There is no communal bathroom or toilet block. Each of the long term sites has its own electricity meter, with the site occupant responsible for arranging connection and paying their own electricity bills. The Caravan Park has a small communal laundry with two washing machines, clothes drier and an ironing board. There is also an external clothes line (150m of line space). There is another area of open space adjacent to the laundry. No other facilities (eg barbeque, picnic tables, playground, information directory) are provided. The existing layout of the Park does not maximise the potential of the site. There is opportunity to create some additional sites at the northern and/or southern end of the Park and/or by relocating the laundry and utilising this space. There are currently five long term permanent residents on site, with four of these residents reported to have been on-site for more than 10 years. There are no tenancy agreements in place between the long term residents and Council. The opportunity to enter into tenancy agreements was offered to the long term residents in the past, with none of the tenants willing to enter into an agreement. Due to the length of these tenancies, the Residential Tenancy Act now applies and a Residential Tenancy Agreement is deemed to be in place.

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AERIAL PHOTOGRAPH OF THE CARAVAN PARK

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2.4 Other Reserve Uses Boggabri Swimming Pool Boggabri Swimming Pool complex is located on the corner of Laidlaw and Caxton Streets and abuts the northern boundary of the Caravan Park. The Pool complex incorporates: 33m x 6 lane pool. - the pool is solar heated and has two diving boards (1m and 3m) Wading pool Shade shelters Change rooms (cold showers) Entry / reception / office / kiosk

The Pool is open from October 1st to the last weekend in March. It attracts around 8,000 to 10,000 users per annum of which 70-75% are children. Open Space The remainder of the Reserve (Lots 1, 2, 3) is unimproved Open Space. This area is located to the east of the swimming pool, on the corner of Caxton and Lynn Streets, with access from Caxton Street. This area has no development constraints and was assessed in the Plan of Management as being suitable to accommodate the extension of the caravan park. This part of the Reserve is not serviced, however electricity, water and sewerage are available on the developed parts of the Reserve and can be easily extended onto this portion.

2.5 Management Narrabri Shire Council is the Trustee for the Reserve, with Council responsible for the care, control and management. The Park is operated by Council as a service to the community. It is too small to be an economically viable business and to support an onsite manager. Management is very 'low key', responding primarily to the needs of the long stay residents rather than endeavouring to attract and service short stay visitors. Cleaning and maintenance is undertaken by Council works staff based in Boggabri. In addition, a Council employee (hereafter referred to as the 'Overseer') who resides in Boggabri is paid a weekly retainer to act as the point of contact for the Park, collect fees and undertake minor maintenance. A phone number (out-of-date) is provided at the entrance to the Park, with visitors to make contact with the Overseer who will then come and open up the ensuite facilities. This arrangement has been in place for 17 years. Difficulty in contacting the Overseer is an issue. The phone number on the sign at the Park is out-of-date and is an after hours number. Visitors drive away rather than stay at the Park, with a resultant loss in potential income for the Park and the Boggabri community. In addition, while visitors can set up on a site they are not able to gain access to the ensuite facilities until the Overseer arrives. Council and the Narrabri Visitor Information Centre occasionally receive complaints relating to the inability to contact the Overseer and access the ensuites. The Park is not effectively marketed or promoted. Other than the Narrabri Visitor Guide, the Park is not included in any caravan or camping directories or on relevant websites. There is no contact phone number listed for the Park. The adjoining Swimming Pool has an on-site Manager, with two casual staff employed on an as-needs basis when the Pool is open. The Pool complex is maintained to a higher standard than the Caravan Park. It is timely for the management structure of the Caravan Park to be reviewed.

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3. PRESENTATION & PERFORMANCE OF THE CARAVAN PARK 

3.1 Presentation Boggabri Park does not present particularly well. The Park is more than 30 years old and presents as tired and, in some ways intimidating. The Park is only maintained to a basic standard, with maintenance carried out on an as-needs basis. The presentation is not of the same standard as the adjoining swimming pool or the other parks in Boggabri. Issues include: Poor quality entrance signage, with the signs being faded and difficult to read. The contact

telephone number given for the Park is incorrect. The entrance and signs are not illuminated at night.

Poor condition and/or presentation of most of the long term vans. In particular the van adjacent to

the entrance is in very poor condition with the annex having no roof and being badly torn. The presentation of this and some of the other vans does not create a positive first impression and is a deterrent to visitors.

The ensuite facilities need minor repairs. While the buildings are not particularly attractive, they are

functional and meet basic needs. The buildings are on the 'wrong' side of the caravan pad and designed for vans to be driven onto the site not reversed (due to the site boundaries vans have to be reversed onto the sites).

The laundry presents very poorly with the building needing to be refurbished and kept clean and

tidy. Equipment may need to be replaced. The housing for the fire protection equipment is rusted and contributes to the 'neglected'

appearance of the Park. Lawns are in poor condition with burrs being a problem. The poor condition of the lawn has been

exacerbated by the drought. Council recognises that the Park needs to be upgraded. Improvements being considered include: More secure fencing Landscaping, particularly adjacent to the entrance Information board with information and maps for the Caravan Park, Boggabri and Shire /

surrounding area. Relocating and screening the clothes lines or providing a fold out clothes on each ensuite. Screen the rubbish bins Improve lighting, particularly around the entrance. Providing a barbeque and picnic table.

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3.2 Compliance The approval, management and operation of the Boggabri Caravan Park is governed by a range of State Government legislation and policies and Council planning instruments including: Crown Lands Act, 1989 Local Government Act, 1993 Local Government (Manufactured Home Estates, Caravan Parks, Camping Grounds & Moveable

Dwellings) Regulation 2005 The Residential Parks Act 1998 & Residential Parks Regulation, 1999 The Holiday Park (Long Term Casual Occupants) Act 2002 & Regulations Environmental Planning & Assessment Act, 1979 Narrabri Local Environmental Plan (LEP) State Environmental Planning Policy No. 21 – Caravan Parks State Environmental Planning Policy (Infrastructure) 2007 Crown Lands Caravan Park Policy, 1990 Fire Protection Policy for Caravan Parks on Crown Reserves and Leasehold Lands, 2005

Information on these regulatory controls is provided in Appendix 1. There are a number of areas where the Boggabri Caravan Park does not appear to be complying fully with some Government Regulations and Policies, including: Compliance with the Fire Protection Policy for Caravan Parks on Crown Reserves and Leasehold

Lands. Information given to Park Users when they check-in as required by Clause 123 of the Local

Government (Manufactured Home Estates, Caravan Parks, Camping Grounds & Movable Dwelling) Regulation 2005.

Not providing the information or Tenancy Agreements to long stay visitors as required by the

Residential Parks Act 1998 & Residential Parks Regulations. The annex's and structures erected in the Park by some longer stay residents are not in

compliance with the relevant Regulations. Other non-compliance issues such as no on-site visitor parking and car washing facilities.

A number of the long term residents have pets which is not permitted by Council's 'No Pets' policy

for Caravan Parks.

3.3 Use of Boggabri Caravan Park Information on the level of use of Boggabri Caravan Park is provided from the 'Return of Caravan Park' rent form that the Manager submits fortnightly to Narrabri Shire Council. These returns are only available for the period June to December 2006 and for 2007, however the December 2007 figures do not include dates for which the payment applies. The length of time that the site was occupied is estimated from the income generated. There are some anomalies with this information. Income data is available for the financial years 2003/4, 2004/5, 2005/6, 2006/7 and year to date 2007/8. These figures show that income has fluctuated between $21,120 in 2005/6 and $29,634 in 2004/5. 2006/7 ($23,617) is one of the lower income years. The income figures indicate that the occupancy rates achieved in the period for which occupancy data is available, were lower than the rates achieved in the previous 3 years.

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The Return forms and Income data available relates to the period of mining exploration and coal mine and related infrastructure development in the Boggabri area. Mining in the area is estimated to have a life of around 50-60 years (depending on the rate of extraction), with demand for caravan park sites likely to fluctuate during this period depending on the activities being undertaken at the mines. In the 7 months from June to December 2006, Boggabri Caravan Park achieved a site occupancy rate of 63.9%. The 2 tourist sites, achieved 54.7% while the long term sites achieved 65.8%. Three of the long term sites were permanently occupied for the 7 months, with two other sites achieving 87.9% and 85% occupancy respectively (note: these two sites may have been 100% occupied, with rent paid in advance and or be in arrears and not shown on the Returns for the period). In 2007, the Park achieved an occupancy rate of 68.4%. The tourist sites achieved 21.6% and the long term sites, 77.8%. The occupancy rate for the permanent sites may have been higher as some of the longer term residents make irregular lump sum payments (eg may be in hospital or out of work), so may have been occupying a site but not paid the rent within the financial period for which the records are available. Site Occupancy Rate (%) Site 1 2 3 4 5 6 7 8 9 10 11 12 Total2006 37.4 72.0 34.6 87.9 21.0 85.0 68.2 100 24.8 36.4 100 100 63.9 2007 20.1 23.5 69.9 100 19.2 100 47.9 100 95.9 45.2 100 100 68.4 2006 - 7 months data from June to December 2006 Based on the Returns, it appears that the demand has been primarily for permanent and semi-permanent sites. In the period June to December 2006, only 5 of the 234 site nights for the tourist sites, were for bookings of less than 1 week, with these bookings being 3 overnight bookings and 1 booking of 2 nights. Site 1 achieved an occupancy rate of 37.4%, while site 2 achieved 72%. To the touring caravan / motorhome looking for an overnight site, the Park would have appeared as being close to capacity in 2006 and it is likely that some travellers would have moved on rather than stay in the Park. In 2007, 18 site nights out of the 151 site nights spent on the tourist sites were for bookings of less than one week, with 8 overnight bookings, 3 bookings for 2 nights and a booking for 4 nights. Based on discussions with the Park Overseer, the Boggabri community and the Pool Manager, the visitor markets attracted to the Boggabri Caravan Park are: Mine related workers - primarily contractors seeking temporary accommodation. This has been

the primary visitor market since mining commenced in the Boggabri area, with some of these visitors staying for months at a time. The vans are often left on-site and occupied during the week, with the worker returning to their normal place of residence on weekends.

Itinerant workers - agricultural and infrastructure based - coming into the area for temporary

employment or moving through Boggabri enroute to other locations. This market typically stays 1-3 weeks.

Touring caravans and motorhomes. Primarily retirees who stay 1 to 2 nights. This market is very

small, how this may be due to the lack of marketing and promotion of the Park, lack of directional signage to the Park, the inability to contact the Park Overseer and/or the poor presentation of the Park.

People coming into town for events, in particular for the Drovers Campfire and the Wean Races.

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3.4 Fees Fees for Boggabri Caravan Park for 2007/08 are: Tourist Sites $16.50 per night or $82.50 per week Long Term Sites $55 per week (excludes electricity)

For comparison, the fees being charged for a powered tourist site per night by other caravan parks in the surrounding region are summarised in the following table. The fees for tourist sites at Boggabri are at the high end of the range for lower standard caravan parks with limited / no facilities located in the smaller towns and villages in the North-West Region. The fees are below those of the larger caravan parks in Gunnedah, Narrabri and Wee Waa. The Narrabri and Gunnedah Parks are of a higher standard than Boggabri caravan park and offer a range of guest facilities. There is limited opportunity to increase fees for the tourist sites. Once the Park is upgraded there should be opportunity to increase the fees paid for the long term sites. There is also opportunity for Council to have rent payments from pensioners deducted directly from their pensions. Rent relief could also be available for pensioners. Fee Comparison - Powered Tourist Sites (2 people / site / night) Park Standard

(star) Powered Tourist Sites Fee / site

/night Parks in larger townsHighway Tourist Village, Narrabri 3.5 54 sites* / 15 cabins $25 - $35 Narrabri Motel & Caravan Park 3 9 sites $14 - $18 Big Sky Caravan Park, Narrabri 3 68 sites / 4 cabins $18 Mainway Caravan Park, Wee Waa nr $30 Waioma Caravan Park, Wee Waa nr $22 Gunnedah Tourist Park 3.5 27 sites / 10 cabins $22 Parks in smaller towns and villages - North West NSWAshford 1.5-2 24 sites $15 Quirindi 2.5 20 sites / 3 cabins / 1onsite van $16 Little Gem, Bellata 1.5 12 sites $15 Yetman nr 10 sites $10 Junction City, Burren Junction nr 6 sites $10 Elanbe, Boggabilla 2 42 sites / 6 s/c units / 4 cabins $13 Post Office Hotel, Mullaley nr 10 sites / 3 cabins $17.60 nr = not rated s/c = self contained Source: AAA Accommodation Directory + discussions with Operators

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3.5 Financial Performance Information on the financial performance of Boggabri Caravan Park is only available for the last 4 financial years (2003/04 onwards). In this period the Park has operated profitably before taxation and depreciation. Given the age of the Caravan Park, the assets are likely to have been fully depreciated. Year Income Expenses Profit Profit as % of

Income 2003 - 04 2004 - 05 2005 - 06 2006 - 07 2007 - 08 (at 14/12/07)

$27,535 $29,643 $21,120 $23,617 $ 8,840

$18,973 $19,891 $16,721 $19,024 $11,180

$ 8,662 $ 9,752 $ 4,399 $ 4,593

31.5% 32.9% 20.8% 19.4%

In 2006/07 Boggabri Caravan Park achieved a yield of $1,968 per site. This equates to $7.69 per occupied site per night. Limited data on the performance of caravan parks is available from the Australian Bureau of Statistics (ABS). Data is available for Narrabri Shire (3 parks only surveyed) and the New England - North West Region (NE-NW). The data is limited to the breakdown of site types, total capacity, site occupancy rates and total takings from accommodation. The ABS data is not directly comparable to Boggabri Caravan Park as the ABS data provides total park income which includes income from all onsite accommodation, including holiday vans, onsite caravans, onsite cabins, units within caravan parks etc. Onsite accommodation generates a much higher return than powered and unpowered sites. Onsite cabins account for 24.1% of the sites surveyed in Narrabri Shire and 16.7% of the sites surveyed in the NE-NW Region. The data available is summarised in the following table: Quarter Site Occupancy Yield / Site / Year $ / Occupied Site / Night

Narrabri NE - NW Narrabri NE - NW Narrabri NE - NW March 06 June 06 September 06 December 06

28.9% 39.0% 33.6% 27.7%

34.2% 31.1% 33.0% 34.8%

$ 926 $1157 $1191 $ 877

$738 $662 $772 $732

$35.67 $32.58 $38.53 $34.47

$23.98 $23.36 $25.42 $22.91

Total 2006 32.3% 33.2% $1038 $725 $35.23 $23.91 March 07 June 07 September 07

17.8% 35.6% 37.1%

35.2% 36.5% 36.1%

$ 800 $1044 $1330

$853 $802 $837

$50.00 $32.21 $38.34

$26.93 $24.16 $25.17

Based on these figures, Boggabri Caravan Park is achieving a higher occupancy rate than the Shire and regional averages, plus a higher yield per site per year. This reflects the small size of the Park plus the dominance of long term residents. The average revenue per occupied site per night for the Shire and Region are higher, reflecting the income generated from onsite caravans, cabins and units. Operating Expenses The operating expenses for Boggabri Caravan Park are summarised in the following Table. Information prior to 2003-04 is not available. Expense 2003-04 2004-05 2005-06 2006-07 Overseer - Retainer Labour - Grounds Maintenance Telephone Electricity Plant & Equipment Repairs

$ 5,200 $ 1,020 $ 854 $ 2,867 $ 1,508 $ 615

$ 5,200 $ 1,064 $ 830 $ 1,671 $ 1,718 $ 2,449

$ 5,200 $ 1,145 $ 886 $ 2,127 $ 1,729 $ 325

$ 5,200 $ 1,218 $ 1,021 $ 3,606 $ 1,352 $ 264

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Stores (consumables) Bank Fees & Charges Miscellaneous Journal Adjustments Rates

- $ 265

- -

$ 6,644

$ 58 $ 92 $ 11 $ 154 $ 6,644

$ 57 $ 41

- -

$ 5,212

- $ 266 $ 68 $ 716 $ 5,312

Total $18,973 $19,891 $16,721 $19,024 Note: Columns may not add to Totals due to rounding The expenses should be regarded as indicative only as there are a number of anomalies in the information available. Figures that may not be completely accurate include: Pre 2005-06, it appears that there was a practice amongst Council Works staff to transfer time and

plant costs between different facilities to ensure that budgets were not exceeded. Consequently, cost overruns at Boggabri Caravan Park may have been charged to other reserves or conversely, cost overruns at other reserves may have been charged to Boggabri Caravan Park.

In relation to telephone expenses, Council pays the Overseer's telephone account. The Overseer

then reimburses Council for any private calls. The reimbursed payment goes into a 'recoverables' account, rather than recorded as income for the Caravan Park. As such the telephone expense shown is higher than the actual cost incurred.

The amount spent on Stores appears very low, with purchases limited to 2004-05 and 2005-06.

Stores should include consumables such as toilet paper, light bulbs, cleaning chemicals and equipment. In 2004-05 and 2006-07 there were journal transfers of expenses to the Caravan Park which may have included Stores.

Plant and equipment costs incorporate an hourly fee, each time Council staff use plant and

equipment on-site. Plant and equipment includes mowers, whipper snippers, bob cats and other machinery. Vehicle expenses, incurred when Council staff visit the Caravan Park, are also included in plant and equipment costs.

There has been an increase in the electricity account, with Site 3 being included in the account in

since 2006. Prior to this, the costs were for Sites 1 and 2 and the laundry only. Council has a Shire-wide insurance policy, so no insurance costs are recorded against the Park.

There are no marketing or promotional costs included in the expenses. Council has taken out a

small advertisement in the Narrabri Shire Tourism Guide for the Park. The cost of this does not appear to have been charged back to the Park (unless it was in the Journal transfer).

It is also noted that repair costs are very low, reflecting the limited maintenance undertaken in the Caravan Park.

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4. STRENGTHS & WEAKNESSES  The strengths and weaknesses of the Boggabri Caravan Park are summarised below: Strengths The Caravan Park is located within easy walking distance of the Boggabri shopping centre and

Licensed Club. Boggabri is an attractive, friendly and safe town.

The Caravan Park is adjacent to the swimming pool, with other recreational facilities, including

tennis courts and a playground, located very close by. The Park has a quiet, off highway location.

The short term tourist sites have an attractive outlook over Jubilee Park Reserve / Cox's Creek

floodplain. The Caravan Park is not likely to be built out. There is room for the expansion of the Park onto the adjoining open space area of Boggabri

Reserve. In comparison to other caravan parks in the region, Boggabri Caravan Park is competitively priced.

The tourist sites have individual ensuites, which are favoured by some travellers.

Boggabri is the closest town to most of the coal mining that is occurring in the Gunnedah Basin.

The mines are bringing visitors into the town, generating demand for the caravan park and other accommodation.

Weaknesses The Caravan Park does not present well, with the Park being tired and run-down.

Cleaning and maintenance standards are low.

No on-site manager, with the Council Overseer not being readily contactable. Contact details on

the Park entry sign are out-of-date. The Park only partially complies with relevant legislative and policy requirements.

The Park is dominated by long term residents - this can be intimidating to visitors.

Ensuites are located on the 'wrong' side of the caravan pads.

Lack of accommodation options - no camp sites, drive through sites, non-powered sites, onsite

vans or cabins. Limited information available on the performance of the Caravan Park on which to base

management and investment decisions. The tourist sites are being used by itinerant workers, with the sites being booked for extended

periods. These workers are potentially displacing the tourist market. The Park has no presence or visibility to passing trade, nor is it signposted from the Kamilaroi

Highway. The Park is not marketed or promoted. It is not listed in any of the caravan park guides or

directories or included on relevant websites nor have an email address.

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There is no Risk Management Plan in place for the Park.

With the lack of signage and marketing and promotion most travellers are unlikely to be aware that the Park exists. The low occupancy rates for the tourist sites partially reflect the low level of marketplace awareness. Contribution to the Boggabri Community Boggabri Caravan Park contributes to the local community by providing: A low cost housing option - with the Park providing a home for a few long term residents of the

Boggabri community. Low cost housing options within the township are very limited. A temporary housing option – with itinerant workers occasionally placing their vans on the Park

while working in the Boggabri area. Since the opening of the coal mines in the Boggabri area, the Park has attracted use by mine-related workers.

Tourist accommodation – sites for touring caravanners, with the Park attracting occasional use.

Residents of and visitors to the Caravan Park spend money in Boggabri, making a positive contribution to the local economy. A number of businesses in Boggabri are struggling, and every additional dollar spent in town is important.

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5. DEVELOPMENT CONCEPTS Narrabri Council is proposing to upgrade and possibly extend the Boggabri Caravan Park to meet the need and expectations of the marketplace. Council is looking to provide: Self contained cabin accommodation Short term tourist sites – powered Camping sites Amenity block Small camp kitchen with barbeque, picnic tables and wet bar area.

Two options were identified in the Plan of Management: 1. Re-configuration and/or minor extension caravan park. 2. Extension of the Caravan Park onto the open space area.

5.1 Option 1 Option 1 involves some re-configuration of the existing Park, possibly in conjunction with extending the Park into the Swimming Pool complex. If needed, the boundary fence between the two areas could be moved north, closer to the Pool. Two preliminary concepts have been prepared - Option 1A which utilises the existing entrance and access road and Option 1B which involves relocating the entrance. Note: There are other possible options for re-configuring the existing park. Option 1A: The existing entrance road is retained. The Caravan Park is extended into the Pool complex. The area between the access road and the new Pool fence is used for campsites. Site 1 is relocated to the southern end of the Park and becomes a long term site. Site 12 (adjacent to the entry) is also relocated to the southern end of the Park. Sites 2 and 3 becoming the short term tourist sites. A new amenities block, incorporating toilet, showers and laundry is built on the former Site 1. The existing laundry is demolished and the clothes hoists removed. Cabins are placed on the former Site 12 and laundry sites. Foldout clothes lines are attached to the wall of each ensuite and the new amenities block to

provide individual clothes lines. This option would provide for 2 cabins, depending on size and potentially 3-4 short term camp sites. Option 1B The entrance road is relocated adjacent to Site 11 and the existing entrance closed. The Caravan Park is extended into the Pool complex. Site 1 is relocated to the southern end of the Park and becomes a long term site. Site 12 (adjacent to the entry) is also relocated to the southern end of the Park. Another long term site is created at the southern end of the Park. Sites 2 and 3 becoming the short term tourist sites. Camp sites are provided at the northern end of the Park. A new amenities block, incorporating toilet, showers and laundry is built on the former Site 1. The existing laundry is demolished and the clothes hoists removed. Cabins are placed on the north eastern corner of the site Foldout clothes lines are attached to the wall of each ensuite and the new amenities block to

provide individual clothes lines.

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This Option would provide for 3 cabins, depending on size, 2-3 camp sites and one additional long term site.

OPTION 1A

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OPTION 1B

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Advantages Lower cost - as the internal road and services are largely in place.

Would address immediate needs for a few cabins and non ensuite sites for caravans or campers.

Provides the opportunity to remove the permanent van that is located adjacent to the entry and

upgrade the presentation of the entry area. Disadvantages The additional accommodation generated is minimal and there is no provision for any growth in the

Caravan Park or flexibility in how the area is used. The Park may still not be able to meet all requirements of the Local Government (Manufactured

Home Estates, Caravan Parks, Camping Grounds & Moveable Dwellings) Regulation 2005 (hereafter referred to as the 'Regulation')

Loss of amenity and privacy in the Swimming Pool complex. Privacy would need to be addressed

by appropriate screening. Noise from Pool users could impact negatively on camping sites adjacent to the fence.

Increased 'crowding' in the long term section of the Caravan Park. This could potentially lead to

increased conflict between residents. There is minimal opportunity for increasing the attractiveness of the Park.

5.2 Option 2 Option 2 involves extending the Park onto the Open Space portion of the Reserve. The Laneway Road Reserve would be closed to accommodate the extension. Consideration could also be given to closing the Lynn Street Road Reserve adjacent to the site. This option incorporates: Division of the Park into long term and short term (tourist) areas. The existing caravan park would

become the long term area. Reclassifying the two tourist sites in the existing park to long term sites.

Upgrading the presentation and amenities in the long term section of the Park.

Developing a small tourist park on the Open Space area, with the tourism park incorporating a mix

of caravan sites, camping sites and cabin accommodation plus and amenities block and other facilities needed to service park users and meet the requirements of the legislation.

Access to the extension (new tourist park) could be via an access road through the existing caravan park adjacent to the boundary with the swimming pool (Option 2A) or from Caxton Street (Option 2B). Possible development concepts are shown in the following sketches. Note: these sketches are indicative only and Council will need to seek design input from a Caravan Park designer.

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Advantages Separation of long term residents and visitors. This would increase the privacy of the long term

residents, remove the disruptions and intrusions created by the arrival of visitors in the Park, and reduce the potential for conflict between the different user groups.

Additional land enables the Park to be developed to meet the needs for cabins, drive through

caravan sites and camping sites. Provides flexibility and also the opportunity for future expansion.

On-site amenities block. This provides flexibility for the adjoining part of Jubilee Reserve to be

used for overflow camping and other activities if the need arises. For example it could enable Boggabri to accommodate a temporary construction camp associated with the development of the Queensland to Hunter Gas Pipeline.

Disadvantages Higher cost to develop and maintain.

Infrastructure could be sitting idle if demand does not eventuate.

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OPTION 2A

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OPTION 2B

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6. MARKET ASSESSMENT This section explores the demand for the accommodation options proposed for Boggabri Caravan Park, namely cabins, powered tourist sites, long terms sites and camping sites. Cabins basically attract the same markets as motels, hotels and rental accommodation and will attract both short and longer stay visitors. Long term sites will attract people who have their own vans and looking to stay for extended periods in Boggabri, while the tourist and camping sites will attract the touring and short stay visitor market.

6.1. Current Demand for Accommodation in Boggabri Hotel and Motel Accommodation Boggabri has a very limited supply of hotel and motel accommodation, with 7 basic pub hotel rooms and 12 motel rooms in the town. Since 2000, the primary market for these properties has been mine-related visitors, principally contractors. Visitation was highest during the mine exploration, planning and development stages, with these properties achieving close to 100% occupancy during the start-up period. Since the mines commenced operations, the hotel and motel have achieved relatively high occupancy rates from Monday to Thursday nights from mine related workers and contractors. Unless there is something on in Boggabri or Gunnedah occupancy rates are relatively low on Friday, Saturday and Sunday nights. Non mine related markets attracted to the motel include: Passing traffic - primarily walk-in trade.

People coming into the area to visit friends and relatives, attend social functions or if there is

illness or death in the family. People coming into Boggabri for an event - Wean Races, Drovers Campfire, Campdraft.

Overflow from Gunnedah, including during Agquip (5 days), bird shows, horse events and when

there is a large conference in town. Due to the mining and a number of major construction projects, the accommodation in Gunnedah has been running at very high mid-week occupancy rates, with the town often booked out.

Overflow from Narrabri - occasional basis when there is a major conference in Narrabri.

These markets are potential markets for the proposed caravan park cabins. Caravan Park Sites As discussed in Section 3.3, Boggabri Caravan Park currently attracts patronage from: Permanent residents - long term members of the Boggabri community who reside permanently at

the caravan park. Coal mine related workers - primarily contractors who are employed for an extended time in

Boggabri. Itinerant workers - agricultural and infrastructure based.

Touring caravans and motorhomes. Primarily retirees who generally stay 1 to 2 nights.

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People coming into town for events - most of the camping for these events is undertaken at the Showground, however there are some visitors who prefer the Caravan Park.

Self Contained Accommodation There is no self-contained accommodation in Boggabri available for short-term visitors. The Caravan Park Overseer and Narrabri and Gunnedah VIC's regularly receive inquiries from visitors to the area who are looking for self-contained accommodation, primarily self contained cabins. Low Cost Housing With the development of the mining sector, house prices and rent levels in Boggabri have increased substantially. The hotel has also improved its rooms and is seeking the higher rents that can be achieved from mine-related visitors. Boggabri Caravan Park provides the only low cost housing option available in the town, with people needing to provide their own caravan to use the Park.

6.2. Caravan Park Markets - North West Region Information was sought from a range of Caravan Park operators from the surrounding region regarding the visitor (short stay) markets that they attract and the pattern of visitation. The visitor markets attracted include: Mining related workers and contractors (Gunnedah and Quirindi only) Itinerant and contract workers Point-to-point vans - through traffic transiting the region Touring vans Special interest markets People coming in the area to attend events and social functions

Mine Related Workers & Contractors Since mining recommenced in the Gunnedah Basin mine-related workers have been a significant market for the caravan parks in Gunnedah and Quirindi. The mining activity has also resulted in infrastructure projects (eg upgrading of the rail line) and construction projects including retail, commercial, industrial and accommodation. Workers coming into the area for these projects have generated demand primarily for the caravan park cabins. There has also been some demand for powered sites, with workers staying from a few weeks up to 12 months. Itinerant Workers Itinerant workers (eg builders / tradesmen, harvesting crews, road and telecommunication workers etc) have traditionally been a strong market for the Region's caravan parks. In the past, contractors and workers have brought their own caravans, however in recent years, demand has shifted primarily to cabin accommodation. In recent years the drought combined with changing work practices, has resulted in a marked decline in the number of agricultural-sector itinerant workers seeking temporary accommodation. Point-to-Point Vans The point-to-point vans travel from home to a predetermined destination. This market uses enroute caravan parks as transit stops, coming in late afternoon and leaving early in the morning. This business is concentrated in the Newell Highway caravan parks such as those in Narrabri, Bellata and Boggabilla. Price and accessibility are both issues for this market. For 'transit' stops smaller caravan parks are often preferred as they tend to be cheaper and not crowded. The market has a strong preference for drive-through sites to avoid having to back and/or unhitch the van. Point-to-point travellers are usually repeat visitors and have established touring patterns with preferred places to stay. They tend to book in advance.

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Touring Vans The touring van market is a main source of business for the smaller caravan parks throughout the Region. The touring van market incorporates mobile homes, campervans, caravans (trending towards smaller, pop-up style) and 4WD vehicles towing 4WD camper trailers. This market is relatively flexible in their travel arrangements. Travellers generally don't book in advance and will often pull into a park to stay one night and may extend their stay to 2-3 nights to take 'time out' from being on the road. The touring van market tends to use a mix of 'free' camping sites and caravan parks. The market is budget conscious and seeks value for money. Spring and autumn are the peak travel times, with demand declining in winter, and being very low in summer. Travellers Cabins are popular with Highway travellers, with families being the dominant market during school holidays and retirees at other times. In recent years Park operators have noted that some of their regular point-to-point caravan patrons are now staying in cabins rather than towing a caravan. Sporting Market Self-contained cabins are very popular with visitors coming into the region for sporting events. Sports-related visitation is concentrated in the larger towns (Narrabri, Gunnedah and Tamworth) that host regional and State sporting events. Special Interest Markets Special interest markets are an important source of business for a number of the smaller caravan parks within the Region. For example, Bellata attracts fossickers, Yetman attracts anglers, Ashford attracts both anglers and fossickers and Yarrie Lake attracts a mix of boating / water-skiing users and bird watchers. For this market, the pursuit of the activity drives the destination decision. Boggabri has some fossicking opportunities, with the Narrabri Shire Tourism Manager currently exploring options for developing this product further. Consideration is also being given to promoting fishing in the Namoi River and developing bush-walking product with walks proposed at Gins Leap, Mt Robinson and Dripping Rock. Events People coming the region for social functions and events are a small market for the caravan parks. The event market tends to prefer on-site cabins and camping rather than towing a caravan.

6.3. Trends in the Caravan Market The caravan, campervan and motorhome market is a growing market throughout Australia. Around 8 to 10% of the Australian population owns a caravan, motorhome or camper trailer. The Campervan and Motorhome Club of Australia (CMCA) has over 50,000 members with its magazine, the ‘Wanderer’ having a circulation of over 20,000. There are also a number of similar associations, such as the Winabago Owners Association. The CMCA has a regional Chapter structure, with each Chapter holding an annual meeting and also organising a number of trips each year. There are also State and National meetings and conventions. Other similar associations and clubs also regularly organise events, activities and meetings including trips away. International visitors hiring Campervans to tour Australia are a growth market with hire companies, such as Britts and Kia expanding rapidly and expecting this market to continue to grow strongly

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According to caravan park operators the caravan market appears to be split into two groups, the older point-to-point long haul travellers, and an emerging newer market of younger touring travellers (baby boomers). It is the latter market that is growing. The point-to-point market in inland NSW consists primarily of older Victorians undertaking an

annual visit to Northern NSW and Queensland. This market typically travels north in late autumn - early winter and returns in spring. Trip patterns are relatively fixed, with these travellers having preferred places to stop. This market is contracting. Travellers are aging and finding it more difficult to tow and park a van. Rising petrol prices have also had an impact. Caravan park operators advised that point-to-point van numbers are declining, however this has been partially offset with growth in the demand for cabin accommodation. Notably, some of the older regular clients are still coming through, however are driving smaller cars and staying in cabins rather than towing their van.

Touring van market - comprised primarily of younger baby boomers (retirees and semi-retirees)

who have bought a 'rig' to tour Australia. These travellers have a relatively 'fixed' amount of money and are looking to spread this money out as long as possible. Most of the rigs are self-sufficient, and are purchased with the view to 'camping out' and minimising accommodation costs. While this segment of the market is growing strongly, it is not directly translating into business for caravan parks, particularly the parks in transit corridors as opposed to destination areas.

The touring van market uses a mix of commercial parks and 'free' areas such as rest areas, car parks and reserves (particularly those with attractive outlooks – riverside, parks etc). Caravan parks tend to be used when travellers are staying in an area for a few nights and/or when they need to charge batteries, fill water containers, use a dump point and/or do laundry. This market is more likely to stay in commercial caravan parks in destination areas where they are planning to spend a number of days, rather than for overnight stops when travelling. While this market generally does not spend on accommodation, it does spend on other services such as groceries, restaurants and clubs, merchandise and tours. Most touring van travellers do not have fixed, regimented itineraries. As such these travellers are relatively flexible in where they travel and how long they stay. Factors that are important to this market and which influence travel patterns include: Word-of-mouth referrals from other travellers.

Access to free camping areas in scenically attractive areas, with river foreshores being a favoured

location. Rallies, meetings and events held by the caravan / motorhome clubs and associations, with

travellers slowly making their way to and from these activities. Safety - this market generally avoids areas that have a reputation for crime.

Need to access facilities such as a dump point, laundry, power to recharge batteries etc (every 3-5

days). The attraction base of an area and the events being held. 'Bush-related' events such as Picnic

Races, the Drovers Camp Fire and the Hartwood Country Music Festival near Coolah are very popular with this market.

The preference for free camping by the touring van market is generating considerable controversy in some localities. In these localities commercial caravan operators are opposed to free camping, believing that it if camping is prohibited, these travellers would stay in the commercial caravan parks. This does not appear to be the case with the 'mind-set' of the emerging touring van market being strongly oriented to free camping. This mind-set is not being changed by 'banning' free camping. The pattern that appears to be emerging State-wide is: People wanting to free camp will do it regardless of whether or not designated areas are available

in a town. In Moree and Narrabri for example, these travellers overnight in the car parks adjacent

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to the Visitor Information Centre, in the riverside reserves, at sporting ovals, on vacant land near the shopping centres and in Licensed Club car parks.

The touring van and motorhome market actively boycotts areas that are anti free camping.

Boycotting includes not stopping in the area to shop and also avoiding the commercial caravan parks. Within the marketplace, there is a very strong word-of-mouth referral network as well as publicity on the 'negative' areas in caravan and motorhome club and association newsletters.

In areas where there is free camping, the campers tend to come in and set up earlier in the day

and often leave later the following morning. They generally take the time to look around the area. In other areas where camping isn't permitted, the campers tend to come in late in the day (often at dusk) and leave very early in the morning and virtually spend no time or money in town.

The caravan, campervan and motorhome clubs and associations actively try to 'reward' areas that

are 'free camping' friendly, by encouraging members to stop and also by organising rallies and social gatherings to these areas.

Because of the propensity to 'free camp' rather than use commercial accommodation, this market is often not welcome by towns and there are some Councils that are erecting signs and introducing fines to prevent campervans and motorhomes staying overnight in the area outside of caravan parks. Areas ‘pro and anti’ this market are regularly featured in the 'Wanderer' and other relevant publications, with visitation to 'pro' areas encouraged and 'anti' areas actively boycotted. CMCA is currently 'rolling out' a Recreational Vehicle Friendly Town Program. Towns signing up to the Program are promoted by the CMCA to its members, with these towns also being able to bid for motorhome rallies and conventions. Along the Newell Highway corridor, Forbes and Warrumbungle Shires are recognised as campervan and motorhome friendly areas. Narrabri Shire is currently considering signing up to the Recreational Vehicle Friendly Town Program and, if it proceeds, will be promoting the free and low cost camping options available in its smaller towns and villages to this market. Warrumbungle Shire is actively promoting its free camping areas at Mendooran, Binnaway and Coolah. This is resulting in an increase in touring van traffic on the Black Stump Way, with this traffic turning off at Mullaley to Gunnedah and then north by either the Fossickers Way or New England Highway, or turning west to rejoin the Newell Highway. The sealing of the Mullaley-Boggabri Road would encourage touring vans to travel north via Boggabri, to rejoin the Newell Highway at Narrabri.

6.4 Potential Markets for Boggabri Caravan Park Demand for cabins, caravan and camping sites in Boggabri Caravan Park is expected to come from: Work-related Coal mine related workers - primarily contractors associated with both mine construction and

operations. People coming into the area to work - particularly building contractors and infrastructure suppliers

associated with the development of residential and industrial land in the town. Gas related workers - exploration crews and works crews associated with exploration in that area.

If the Queensland to Hunter gas pipeline proceeds then the Park should also attract exploration, construction and maintenance crews.

Agricultural workers - harvesting crews, itinerant workers etc.

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Visitors Kamilaroi Highway travellers. Touring caravans, campervans and motorhomes. People coming into Boggabri for events. Visiting friends and relatives market. Overflow from Gunnedah and Narrabri when these towns are booked out.

Other Relocatees - people moving into the area and requiring temporary accommodation. Locals requiring temporary accommodation, eg during home renovations, family problems etc.

Mining Market Gunnedah Basin has been labelled as the 'New Coal Frontier' in NSW'. The Basin is estimated to contain around 1290MT of coal reserves equating to 12% of coal reserves available in NSW. Since 2000, four open cut coalmines have commenced operation in the Gunnedah Basin. There are a further three mines in the mine assessment and planning stage, with these mines likely to commence production within a few years. There are also two large exploration areas, at least one of which could commence production within 5 years. The length of the mining activity in the Gunnedah Basin will be determined primarily by the global demand for coal and the rate of extraction. Forecasts prepared by the NSW Department of Primary Industries (Mineral Resources) indicate that global demand for coal will continue to rise until at least 2030. The Department has also indicated that by 2012/13 a number of the major mines in the Hunter Valley will have closed and that 50% of coal production in NSW will need to come from new mines. It is expected that mining activity in the Gunnedah Basin will be ramped up to help meet demand. The NSW Minerals Council estimates that there will be around 500 - 600 people employed directly in mining in the Gunnedah Basin, with a further 3000 indirect employees. A present there are around 270-290 people employed in mines in the Basin with a further 230-250 likely to be employed in the next 5-7 years. Boggabri is the closest town to three of the existing coalmines. The next major mine development project is the Narrabri North underground mine, located between Boggabri and Narrabri, with Narrabri being the closest town. Boggabri will attract workers and visitors associated with this mine. Activity in the Maules Creek exploration area is also being ramped up with Boggabri being the closest town to this area. Mine and mine related visitors that Boggabri can be expected to attract during the life of the mining in the area include: Mine planning and development phase - mine personnel (often from head office); broad range of

environmental, planning, engineering and mining consultants; exploration and drilling crews. Mine construction - contact workers; equipment suppliers and installers; regulatory authorities.

Mine related infrastructure projects - works crews associated with the railway, road construction

and infrastructure (water, power, telecommunications) Mine operations - Mine workers - looking for temporary, semi permanent and permanent

accommodation in the area; supplier and service company employees; head and branch office mine staff; regulatory and safety authorities; union officials etc.

In other mining areas (eg Hunter Valley, Mudgee, and more recently Gunnedah), there is strong demand for a range of accommodation from mine related visitors. Contractors and works crews in particular have a very high demand for cabin / self contained accommodation. There is a strong propensity for workers to share accommodation to save money. Discussions were held with representatives from Whitehaven and Idemitsu Coal Companies and with Downer EDI Mining which is the head contractor for the Boggabri Mine regarding likely use of self

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contained cabin accommodation in Boggabri. The mining companies advised that most of their core staff were living in the region and would be unlikely to use commercial accommodation. They advised that most mining activities are now undertaken by contractors and both works contractors and technicians coming into the area to service equipment etc would most likely use self contained accommodation if available. The mining companies have expressed concern in relation to lack of temporary accommodation available to support the development and operation of the Narrabri North Mine. More detailed information on the pattern of visitation and the demand for accommodation from the mine sector is provided in the 'Assessment of Opportunities for Narrabri Shire from Coal Mining & Gas Extraction in the Gunnedah Basin, 2007' available from Narrabri Shire Council. Construction Market The mining activity in the area is generating interest in commercial, residential and industrial development within Boggabri. A new commercial building incorporating 3 shops has recently been constructed, with other development likely as the town grows. All industrial land has been taken up, with this land likely to be progressively developed as mining activity ramps up. A new residential estate (30 lots) is planned with Stage 1 (8 lots) approved. Planning has also commenced on a 10-15 lot subdivision adjacent to the Hospital. As the town grows there may be need to extend facilities and infrastructure, such as schools. Development and construction projects will be undertaken primarily by external builders and contractors, with these workers likely to need accommodation in Boggabri while working in the area. Builders and contractors are a significant market for caravan park cabins in other smaller rural towns. Building projects will also bring utility service provider works crews (eg Country Energy, Telstra etc) into town. Gas Market Coal exploration in the Gunnedah Basin has resulted in the discovery of both natural conventional gas and coal seam methane gas, with the Basin estimated to have the potential to supply the east coast gas market for the next 50 years. Exploration in the Region is ramping up in response to increased demand for gas from both the domestic and international market. Sixteen gas exploration licences have been granted for the Gunnedah Basin, including areas around Boggabri. Exploration and drilling crews could become a small market for cabin accommodation in the Boggabri Caravan Park. Construction of the Queensland to Hunter Gas pipeline is due to commence in 2009. The pipeline will be coming through Boggabri and there should be opportunity for the town to accommodate the construction camp and/or construction workers. It is estimated that there will be around 600 construction workers spread out along the pipeline corridor. Works crews are likely to be in the Boggabri area for approximately 12 weeks. Once the pipeline is commissioned, employment will be minimal. There will however be maintenance crews regularly checking the pipeline and this could generate demand for cabin accommodation. Agricultural & Itinerant Workers Boggabri Caravan Park currently attracts the occasional agricultural / itinerant worker. Patronage from this market is very low. Availability of cabins is expected to increase the market marginally, however it will remain a minor market for the Caravan Park. Kamilaroi Highway Travellers In 2006 the Kamilaroi Highway Committee was formed to develop and promote the Kamilaroi Highway as a touring route. The Committee has developed a website and promotional material and has embarked on a marketing and promotional campaign. As a result, tourist traffic along the Highway has increased over the past 18 months. As Boggabri has limited tourist product, it is not featured strongly on the Kamilaroi route. The Narrabri Shire Tourism Development and Marketing Plan 2007 identifies a

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number of product development opportunities for Boggabri which will, when implemented, increase visitation to the town. Provided that the Caravan Park offers a range of accommodation and is effectively signposted and marketed and promoted, it is likely to attract some Highway travellers. This market will not however be a primary market for the Park. Touring Caravans, Campervans & Mobile Homes The touring van market is a minor market for Boggabri Caravan Park, with this market expected to increase if the Park is extended and upgraded, and the tourist product in the town and surrounding area is improved. The sealing of the Mullaley - Boggabri Road would increase the number of touring vans travelling through the town. Event Market Boggabri has three events that draw visitors into the area - Wean Races, Drovers Campfire and the Campdraft. These events will generate business for the Caravan Park, primarily for the cabins but also some camping. The Drovers Campfire could also generate demand for caravan sites from people coming into town a few days before the Showground opens for camping in order to be one of the first into the Ground when it opens. Visiting Friends & Relatives People coming into Boggabri to visit friends and relatives is the main weekend market for the motel in Boggabri. The proposed cabins would attract a share of this market. Overflow from Gunnedah & Narrabri Both Gunnedah and Narrabri are experiencing capacity constraints in the motel sector, with the towns being booked out during major events. Boggabri already attracts overflow from the major events in Gunnedah and occasionally when there is a large conference in Narrabri. The cabins are likely to attract a share of the overflow market. There are a number of possible developments in Gunnedah that could put further pressure on accommodation and generate overflow business for Boggabri. Possible development projects include two new coal mines, ramping up of gas exploration and the development of an Ethanol Plant. Other The proposed cabins are likely to attract occasional business from people who need temporary accommodation. For example, people relocating to Boggabri to work (eg health workers, police, ambulance drivers, teachers etc) may need temporary accommodation during the relocation process. Likewise people building or renovating houses, or visitors whose vehicles have broken down in town, sometimes require temporary accommodation, with cabins being an ideal option.

6.5. Likely Level and Pattern of Visitation The market assessment indicates that there is likely to be relatively strong demand for self-contained cabin accommodation and for semi-permanent caravan sites. The demand for short term caravan sites (tourist sites) and camping sites is likely to be low throughout most of the year. The activities generating the primary demand for cabins (mining, construction and events), will result in periods of very strong demand where it would be easy to sell 10 or more cabins per night, followed by periods of lower activity, where demand for cabins is likely to fall to 2-3 per night. Most of the demand will be generated by workers, with a small number of retirees and the occasional family group. Initially, consideration should be given to providing 2-3 cabins to meet the needs of retirees and families with additional cabins progressively added as demand dictates and funds become available. Consideration should also be given to providing group accommodation such as a block of miners or

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shearers-style accommodation. These blocks are demountable, modular buildings that a number of single or double rooms each with ensuites, plus a communal kitchen and lounge area. There are a number of variations of this style of group accommodation. Throughout most of the year, the demand for short term caravan sites is likely to be low. There is a need for 1-2 sites that will accommodate long rigs, plus a few drive-through caravan sites and camp sites. During some events, in particular the Drovers Campfire and in the lead-up to the Hartwood Country Music Festival, the demand for sites is expected to be relatively high. The availability of short term sites will also give Boggabri the ability to bid for small motorhome and caravan club rallies. Council has discussed with the Mining Companies, the possibility of the companies and/or their contractors, placing cabins or other temporary modular accommodation in the Caravan Park to accommodate workers. These structures would be placed on some of the caravan or camping sites, with Council providing the service infrastructure. The accommodation would be removed when no longer required, with the area reverting to short-term caravan and camping sites.

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7. PRELIMINARY FINANCIAL ASSESSMENT 

7.1 Limitations of the Financial Information

The following estimates of both development costs and operating performance are based on a preliminary concept for the proposed short-term (tourist) section of the caravan park (Option 2B). Both the development costs and the operating forecast are indicative only and will need to be refined as the project progresses. The operating forecast provides an indication only of possible operating performance. The forecast will need to be progressively refined as the design, management structure and operating directions are further defined.

7.2 Development Concepts Preliminary costs and operating forecasts have been prepared for 3 development concepts: Option 1 - re-configuration of the existing Caravan Park to provide 3 cabins, 5 tourist sites and 11

long term sites. Option 2 - expansion of the Park onto the adjoining open space, with the total Park incorporating

10 cabins (2 one bedroom units and 8 larger two bedroom units), 14 powered tourist sites, campsites and 12 long term sites.

Option 3 - expansion of the Park onto the adjoining open space, with the total Park incorporating 3

cabins, miners accommodation building (8 rooms) plus mess hall, 14 powered sites, campsites and 12 long term sites.

These Options are indicative only as there are a range of configurations that could be suitable for the site.

7.3 Preliminary Development Cost Estimates The development costs are based on a combination of:

Preliminary cost estimates prepared by Council's Economic Development Manager Discussions with Integrated Site Design (caravan park design specialists) who provided

information on industry averages The budget prepared by the Queensland Community Housing Coalition (QCHC) for the

development of a mobile home estate to service a mining community in Central Queensland Internet research on the price of cabins and relocatable buildings. Quote provided by Outdoor Direct Relocatable buildings for miners accommodation and mess hall

buildings.

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The preliminary development costs for each of the Options is summarised in the following table. Preliminary Development Cost Estimates

Option 1

Option 2

Option 3 Site design & planning Upgrade existing Park Site development Cabins Cabin fitout Miners accommodation Miners accommodation fitout Mess Hall Mess Hall fitout Amenities block Laundry Fitout Camp kitchen

$ 20,000 $ 35,000 $ 67,500 $225,000 $ 12.000

$160,000 $ 7,600

$ 40,000 $ 35,000 $ 288,000 $ 700,000 $ 40,000

$ 160,000 $ 7,600 $ 25,000

$ 40,000 $ 35,000 $240,000 $210,000 $ 12,000 $101,000 $ 8,400 $ 67,100 $ 7,000 $160,000 $ 7,600

Total Estimated Cost $517,100 $1,295,600 $875,833 Site Planning, design and approvals $20,000 in Option 1 and $40,000 in Options 2 and 3 has been budgeted for the planning, design and approval process. Upgrade Existing Park $35,000 has been budgeted in each option for some upgrading of the existing Park including improving the fencing, signage and lighting and providing individual clothes lines. Site development Site development incorporates site preparation / earth works, provision of infrastructure (power, water, drainage etc), road construction, fire equipment, fencing and landscaping. Council's preliminary development cost estimates equated to $11,000 per site. The QCHC budgeted $10,000 per site (400sqm sites), while ISD advise that site production costs generally range from $10,000 per site for a basic park through to $20,000 per site (range is dependent on site conditions, availability of adequate power and water to the site and the water, sewage and drainage systems that are installed). If a power transformer is needed it could add up to $100,000 to the cost In Option 1 where some of the infrastructure is already in place, a development cost of $7,500 per site, for the 9 new sites had been adopted. In Option 2, with 24 new sites (10 of which will be used for cabins) a development cost of $12,000 per site has been adopted. In Option 3. The site development costs are based on 20 sites at $12,000per site as a miners accommodation and mess hall will occupy a number of sites. Amenities block $160,000 has been budgeted for the amenities block. The actual cost will depend on the size and fitout. The Regulations require that amenities blocks are of masonry construction.

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BBQ area In Option 2, $25,000 has been budgeted for a barbeque / picnic area. This is desirable but not essential and could be developed at a later stage. Cabins The cost of cabins depends on the size, quality and transport costs. In Option 1, it is assumed that there will be three larger two bedroom cabins at $75,000 each.

In Option 2 the budget incorporates 2 small cabins ($50,000 each) and 8 larger cabins ($75,000

each). Council could look at staging the cabins, possibly starting with 2 and increasing as funds become available.

In Option 3 the budget provides for 3 medium size cabins at $70,000 each.

Obtaining competitive quotes for the supply of cabins could result in some discount to these preliminary figures. Cabin Fitout The cabin fitout has been budgeted at $4,000 per cabin. These costs include all appliances, crockery / cutlery / glassware / pots and pans / utensils etc, furniture (lounge, dining table, outdoor chairs), bedding and linen. These costs are based on retail prices for individual items. Cabin suppliers can provide full fitout, which could result in reduced costs. Likewise, discounts could be negotiated for bulk purchasing. Laundry Fitout $7,600 has been budgeted for the purchase of 2 commercial washing machines and 2 commercial driers. Miners Accommodation and Mess hall A preliminary quote was obtained from Outdoor Direct for an 8-bed workers accommodation relocatable building and mess hall. The mess hall has a kitchen plus dining and lounge area. Workers accommodation comes in modules of 3, 4, 6 and 8 rooms. The quotes obtained were $101,000 for the accommodation and $67,100 for the mess hall. Miners Accommodation & Mess Hall Fitout A total of $15,400 has been budgeted for the fitout of the miners accommodation ($8,400) and mess hall ($7,000).

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7.4. Preliminary Operating Forecasts Preliminary operating forecasts have been prepared for each Option. The forecast provides an estimate of revenue and likely operating costs, with the ‘bottom line’ showing the net position (profit or loss) before taxation, depreciation and finance costs (interest). The forecast period in the model is 5 years. It is assumed that operating performance will stabilise by Year 5. The model is based on 2008 dollars and no allowance is made for inflation in either the revenues or the operating costs. In each model it is assumed that the cabins and miners accommodation will have linen supplied, with the cabins and accommodation cleaned between each booking. Additional revenue could potentially be generated by providing a cleaning service for longer stay cabin and miners accommodation guests. Ability to Service Debt It is assumed that Council borrows money to fund each of the development options, with the loans being for a 20 year period at 9% pa interest. Option 1 - Existing Park - reconfigured Option 1 incorporates 3 cabins, 5 powered tourist sites and 11 long term sites. Revenue Assumptions Revenue is determined by estimating the number of nights sold in each type of accommodation and multiplying this by the achieved rate for the night. The achieved rate is the rate after all discounts (for example, the rack (advertised) rate could be reduced for visitors staying for a longer period of time) and taking into account additional charges for extra people onsite. The rate for the long term sites is low in comparison to other parks and there should be opportunity to increase this. The occupancy rates and achieved rated adopted for this option are:

Achieved Rate Occupancy Rate Year 1 Year 2 Years 3+

Cabins Tourist Sites Long Term Sites

$85.00 $18.00 $ 8.57*

60% 15% 60%

65% 20% 62%

65% 22% 62%

* Long term site fee is based on $60 per week The occupancy rate for cabins assumes that they will be occupied on average 4 nights per week year round. The occupancy rate for the long term sites is based on the current rate. If the Park is upgraded and marketed, higher occupancy rates should be achievable. Operating Costs The operating costs are based on the existing costs (around $19,000pa), increased to reflect increased use of the Park plus the additional costs associated with cleaning and maintaining cabins and an amenities block. It is assumed that the management structure will be the same or very similar to the existing arrangement with cleaning and maintenance undertaken by Council staff. The estimated operating costs are $32,500 in Year 1 increasing to $33,850 by Year 3. The costs are increased as occupancy rates increase.

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Profit / Loss The operating forecast is given in the following Tables. The forecasts show that the Park could generate a profit of around $49,000 in Year 1 increasing to around $52,200 by Year 3. Year 1 Year 2 Year 3 Year 4 Year 5 Revenue Operating Costs

$ 81,421 $ 32,500

$ 88,406 $ 32,800

$ 89,063 $ 33,850

$ 89,063 $ 33,850

$ 89,063 $ 33,850

Profit / Loss* $48,921 $ 55,606 $ 55,213 $ 55,213 $ 55,213 * Before taxation, depreciation and debt servicing Ability to Service Debt The estimated development cost for Option 1 is $517,100. It is assumed that Council borrows $500,000 over 20 years at 9%pa interest. On these terms, the annual repayment is $54,000. Amount Borrowed

Annual Repayment

Profit / Loss after loan repayments Year 1 Year 2 Year 3 Year 4 Year 5

$500,000 $ 54,000 ($ 5,079) $ 1,106 $ 1,213 $ 1,213 $ 1,213 * Before taxation, depreciation

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In Option 1 the Caravan Park would be operating around break-even before depreciation. BOGGABRI CARAVAN PARK Apr-08 PRELIMINARY OPERATING FORECAST - Option 1

Revenue Assumptions

Cabins 3 Powered Tourist Sites 5 Long Term Sites 11

Occupancy Year 1 Year 2 Year 3 Year 4 Year 5 Cabins 60% 65% 65% 65% 65% Powered sites 15% 20% 22% 22% 22% Long Term Sites 60% 62% 62% 62% 62%

Achieved rate per night occupied Cabins $ 85.00 Powered sites $ 18.00 Long Term Sites $ 8.57 $ 60.00 per week

Estimated Revenue

Year 1 Year 2 Year 3 Year 4 Year 5

Cabins Nights sold 657 712 712 712 712 Revenue $ 55,845 $ 60,499 $ 60,499 $ 60,499 $ 60,499

Powered Sites Nights sold 273.75 365 402 402 402 Revenue $ 4,928 $ 6,570 $ 7,227 $ 7,227 $ 7,227

Long Term Sites Nights sold 2409 2489 2489 2489 2489 Revenue $ 20,649 $ 21,337 $ 21,337 $ 21,337 $ 21,337

Total Revenue $ 81,421 $ 88,406 $ 89,063 $ 89,063 $ 89,063

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BOGGABRI CARAVAN PARK Apr-08 PRELIMINARY OPERATING FORECAST - Option 1

Operating Cost Assumptions

Actual Operating Costs 2006-07

Manager $5,200 Labour - Grounds Maintenance $1,218 Telephone $1,021 Electricity $3,606 Plant & Equipment $1,352 Repairs $264 Stores (consumables) $ - Rates & Taxes $5,312 Bank Fees & Charges $266 Marketing & Promotion $ - Miscellaneous $784

$19,023

Operating Cost Estimates

Year 1 Year 2 Year 3 Year 4 Year 5

Caretaker / Manager $ 7,500 $ 7,500 $ 7,500 $ 7,500 $ 7,500 Cleaning / Grounds $ 7,500 $ 7,500 $ 7,500 $ 7,500 $ 7,500 Administration $ 1,500 $ 1,600 $ 1,700 $ 1,700 $ 1,700 Electricity $ 6,500 $ 7,000 $ 7,500 $ 7,500 $ 7,500 Repairs & Maintenance $ 1,000 $ 1,000 $ 1,200 $ 1,200 $ 1,200 Replacement $ 500 $ 600 $ 750 $ 750 $ 750 Consumables $ 500 $ 600 $ 700 $ 700 $ 700 Rates & Taxes $ 5,500 $ 5,500 $ 5,500 $ 5,500 $ 5,500 Marketing & Promotion $ 1,000 $ 500 $ 500 $ 500 $ 500 Contingency $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 Total Operating Costs $ 32,500 $ 32,800 $ 33,850 $ 33,850 $ 33,850

Operating Forecast

Year 1 Year 2 Year 3 Year 4 Year 5

Revenue $ 81,421 $ 88,406 $ 89,063 $ 89,063 $ 89,063 Operating Costs $ 32,500 $ 32,800 $ 33,850 $ 33,850 $ 33,850 Profit / Loss $ 48,921 $ 55,606 $ 55,213 $ 55,213 $ 55,213

Debt Servicing

Amount Annual Profit / Loss after loan repayments Borrowed Repayment Year 1 Year 2 Year 3 Year 4 Year 5

$ 500,000 $ 54,000 -$ 5,079

$ 1,606

$ 1,213

$ 1,213

$ 1,213

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Option 2 - Extension of the Caravan Park Option 2 incorporates 10 cabins, 14 powered tourist sites and 12 long term sites. Revenue Assumptions Revenue is determined by estimating the number of nights sold in each type of accommodation and multiplying this by the achieved rate for the night. The achieved rate is the rate after all discounts (for example, the rack (advertised) rate could be reduced for visitors staying for a longer period of time) and taking into account additional charges for extra people onsite. The occupancy rates and achieved rated adopted for this option are:

Achieved Rate Occupancy Rate Year 1 Year 2 Years 3+

Cabins Tourist Sites Long Term Sites

$85.00 $18.00 $ 8.57*

55% 10% 60%

60% 15% 62%

60% 20% 62%

* Long term site fee is based on $60 per week Operating Costs For Option 2 it is assumed that there is a Caretaker / Manager for the Park that lives rent-free on site and receives a retainer of $25,000 pa to manage the Park. Management includes taking bookings, cleaning, maintenance of grounds and minor repairs and maintenance. The other operating costs are based on the existing costs increased to reflect increased use of the Park plus the additional costs associated with cleaning and maintaining cabins and an amenities block. The total operating costs are $55,200 in Year 1 increasing to $57,300 by Year 3. The costs are increased as occupancy rates increase. Profit / Loss The operating forecast is given in the following Tables. The forecasts show that the Park could generate a profit of around $147,161 in Year 1 increasing to around $170,523 by Year 3. Year 1 Year 2 Year 3 Year 4 Year 5 Revenue Operating Costs

$202,361 $ 55,200

$223,224 $ 55,500

$227,823 $ 57,300

$227,823 $ 57,300

$227,823 $ 57,300

Profit / Loss* $147,161 $167,724 $170,523 $170,523 $170,523 * Before taxation, depreciation and debt servicing Ability to Service Debt The estimated development cost for Option 2 is approximately $1.3million. Amount Borrowed

Annual Repayment

Profit / Loss after loan repayments Year 1 Year 2 Year 3 Year 4 Year 5

$1.0million $1.3million

$108,000 $140,000

$ 39,161 $ 7,161

$ 59,724 $ 27,724

$ 62,523 $ 30,523

$ 62,523 $ 30,523

$ 62,523 $ 30,523

* Before taxation, depreciation If Council borrows the full amount to develop Option 2, the Park would be operate profitably from Year 2 onwards, before depreciation. Under this Option it may be feasible to lease the Park out.

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BOGGABRI CARAVAN PARK Apr-08 PRELIMINARY OPERATING FORECAST - Option 2 - Extended Park

Revenue Assumptions

Cabins 10 Powered caravan sites 14 Long Term Sites 12

Occupancy Year 1 Year 2 Year 3 Year 4 Year 5 Cabins 55% 60% 60% 60% 60% Powered sites 10% 15% 20% 20% 20% Long Term Sites 60% 62% 62% 62% 62%

Achieved rate per night occupied Cabins $85.00 Powered sites $18.00 Long Term Sites $8.57 $60.00 per week

Estimated Revenue

Year 1 Year 2 Year 3 Year 4 Year 5

Cabins Nights sold 2008 2190 2190 2190 2190

Revenue $170,638

$186,150

$186,150

$186,150

$186,150

Powered Sites Nights sold 511 766.5 1022 1022 1022 Revenue $9,198 $ 13,797 $ 18,396 $ 18,396 $ 18,396

Long Term Sites Nights sold 2628 2715.6 2715.6 2715.6 2715.6 Revenue $22,526 $ 23,277 $23,277 $23,277 $23,277

Total Revenue $202,361

$223,224

$227,823

$227,823

$227,823

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BOGGABRI CARAVAN PARK Apr-08 PRELIMINARY OPERATING FORECAST - Option 2 - Extended Park

Operating Cost Assumptions

Actual Operating Costs 2006-07

Manager $5,200 Labour - Grounds Maintenance $1,218 Telephone $1,021 Electricity $3,606 Plant & Equipment $1,352 Repairs $264 Stores (consumables) $ - Rates & Taxes $5,312 Bank Fees & Charges $266 Marketing & Promotion $ - Miscellaneous $784

$19,023

Operating Cost Estimates

Year 1 Year 2 Year 3 Year 4 Year 5

Caretaker / Manager $25,000 $25,000 $25,000 $25,000 $25,000 Administration $1,700 $1,800 $2,000 $2,000 $2,000 Electricity $8,500 $9,000 $10,000 $10,000 $10,000 Repairs & Maintenance $2,000 $2,200 $2,500 $2,500 $2,500 Replacement $1,000 $1,500 $1,800 $1,800 $1,800 Consumables $2,500 $2,500 $2,500 $2,500 $2,500 Rates & Taxes $11,000 $11,000 $11,000 $11,000 $11,000 Marketing & Promotion $2,000 $1,000 $1,000 $1,000 $1,000 Contingency $1,500 $1,500 $1,500 $1,500 $1,500 Total Operating Costs $55,200 $55,500 $57,300 $57,300 $57,300

Operating Forecast

Year 1 Year 2 Year 3 Year 4 Year 5

Revenue $202,361

$223,224

$227,823

$227,823

$227,823

Operating Costs $ 55,200 $ 55,500 $ 57,300 $ 57,300 $ 57,300 Profit / Loss $147,161 $167,724 $170,523 $170,523 $170,523

Debt Servicing

Amount Annual Profit / Loss after loan repayments Borrowed Repayment Year 1 Year 2 Year 3 Year 4 Year 5

$500,000 $54,000 $93,161 $113,724 $116,523

$116,523

$116,523

$750,000 $ 81,000 $66,161 $86,724 $89,523 $89,523 $89,523 $1,000,000 $108,000 $39,161 $59,724 $62,523 $62,523 $62,523 $1,300,000 $140,000 $7,161 $27,724 $30,523 $30,523 $30,523

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Option 3 - Extension of the Caravan Park - Cabins & Miners Accommodation Option 3 incorporates 3 cabins, miners accommodation with 8 rooms, 14 powered tourist sites and 12 long term sites. Revenue Assumptions Revenue is determined by estimating the number of nights sold in each type of accommodation and multiplying this by the achieved rate for the night. The achieved rate is the rate after all discounts (for example, the rack (advertised) rate could be reduced for visitors staying for a longer period of time) and taking into account additional charges for extra people onsite. The occupancy rates and achieved rated adopted for this option are:

Achieved Rate / night occupied

Occupancy Rate Year 1 Year 2 Years 3+

Cabins Tourist Sites Rooms Long Term Sites

$ 85.00 $ 18.00 $ 30.00 $ 8.57*

60% 10% 70% 60%

65% 15% 72% 62%

65% 20% 75% 62%

* Long term site fee is based on $60 per week Operating Costs For Option 3 it is also assumed that there is a Caretaker / Manager for the Park that lives rent-free on site and receives a retainer of $25,000 pa to manage the Park. Management includes taking bookings, cleaning, maintenance of grounds and minor repairs and maintenance. The other operating costs are based on the existing costs increased to reflect increased use of the Park plus the additional costs associated with cleaning and maintaining cabins and an amenities block. A small marketing and promotional budget is included in the operating costs. The total operating costs are $55,200 in Year 1 increasing to $57,300 by Year 3. The costs are increased as occupancy rates increase. Profit / Loss The operating forecast is given in the following Tables. The forecasts show that the Park could generate a profit of around $147,161 in Year 1 increasing to around $170,523 by Year 3. Year 1 Year 2 Year 3 Year 4 Year 5 Revenue Operating Costs

$148,889 $ 55,200

$160,644 $ 55,500

$167,871 $ 57,300

$167,871 $ 57,300

$167,871 $ 57,300

Profit / Loss* $ 93,689 $105,144 $110,571 $110,571 $110,571 * Before taxation, depreciation and debt servicing Ability to Service Debt The estimated development cost for Option 3 is approximately $876,000. Amount Borrowed

Annual Repayment

Profit / Loss after loan repayments Year 1 Year 2 Year 3 Year 4 Year 5

$750,000 $876,000

$ 81,000 $ 12,689 $24,144 $ 29,571 $29,571 $29,571

* Before taxation, depreciation If Council borrows the full amount to develop Option 3, the Park would be operate profitably from Year 2 onwards, before depreciation. Under this Option it may be feasible to lease the Park out.

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BOGGABRI CARAVAN PARK Apr-08 PRELIMINARY OPERATING FORECAST - Option 3 - Extended Park - Miners

Revenue Assumptions

Cabins 3 Miners accommodation 8 rooms Powered tourist sites 14 Long Term Sites 12

Occupancy Year 1 Year 2 Year 3 Year 4 Year 5 Cabins 60% 65% 65% 65% 65% Powered sites 10% 15% 20% 20% 20% Miners accommodation 70% 72% 75% 75% 75% Long Term Sites 60% 62% 62% 62% 62%

Achieved rate per night occupied Cabins $ 85.00 per night Powered sites $ 18.00 per site / night Miners accommodation $ 30.00 per room / night Long Term Sites $ 8.57 $ 60.00 per week

Estimated Revenue

Year 1 Year 2 Year 3 Year 4 Year 5

Cabins Nights sold 657 712 712 712 712 Revenue $ 55,845 $ 60,499 $ 60,499 $ 60,499 $ 60,499

Powered Sites Nights sold 511 766.5 1022 1022 1022 Revenue $ 9,198 $ 13,797 $ 18,396 $ 18,396 $ 18,396

Miners Accommodation Room nights sold 2044 2102.4 2190 2190 2190 Revenue $ 61,320 $ 63,072 $ 65,700 $ 65,700 $ 65,700

Long Term Sites Nights sold 2628 2715.6 2715.6 2715.6 2715.6 Revenue $ 22,526 $ 23,277 $ 23,277 $ 23,277 $ 23,277

Total Revenue $148,889 $160,644

$167,871

$167,871

$167,871

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BOGGABRI CARAVAN PARK Apr-08 PRELIMINARY OPERATING FORECAST - Option 3 - Extended Park - Miners

Operating Cost Assumptions

Actual Operating Costs 2006-07

Manager $ 5,200 Labour - Grounds Maintenance $ 1,218 Telephone $ 1,021 Electricity $ 3,606 Plant & Equipment $ 1,352 Repairs $ 264 Stores (consumables) $ - Rates & Taxes $ 5,312 Bank Fees & Charges $ 266 Marketing & Promotion $ - Miscellaneous $ 784

$ 19,023

Operating Cost Estimates

Year 1 Year 2 Year 3 Year 4 Year 5

Caretaker / Manager $ 25,000 $ 25,000 $125,000 $ 25,000 $ 25,000

Administration $ 1,700 $ 1,800 $ 2,000 $ 2,000 $ 2,000 Electricity $ 8,500 $ 9,000 $ 10,000 $ 10,000 $ 10,000 Repairs & Maintenance $ 2,000 $ 2,200 $ 2,500 $ 2,500 $ 2,500 Replacement $ 1,000 $ 1,500 $ 1,800 $ 1,800 $ 1,800 Consumables $ 2,500 $ 2,500 $ 2,500 $ 2,500 $ 2,500 Rates & Taxes $ 11,000 $ 11,000 $ 11,000 $ 11,000 $ 11,000 Marketing & Promotion $ 2,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 Contingency $ 1,500 $ 1,500 $ 1,500 $ 1,500 $ 1,500 Total Operating Costs $ 55,200 $ 55,500 $ 57,300 $ 57,300 $ 57,300

Operating Forecast

Year 1 Year 2 Year 3 Year 4 Year 5

Revenue $ 148,889 $160,644

$167,871

$167,871

$167,871

Operating Costs $ 55,200 $ 55,500 $ 57,300 $ 57,300 $ 57,300

Profit / Loss $ 93,689 $105,144

$110,571

$110,571

$110,571

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Debt Servicing

Amount Annual Profit / Loss after loan repayments Borrowed Repayment Year 1 Year 2 Year 3 Year 4 Year 5

$ 500,000 $ 54,000 $ 39,689 $ 51,144 $ 56,571 $ 56,571 $ 56,571 $ 750,000 $ 81,000 $ 12,689 $ 24,144 $ 29,571 $ 29,571 $ 29,571

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8. MANAGEMENT OPTIONS 

8.1. Current Management Boggabri Caravan Park is operated as a service to the Boggabri Community. The existing Park is too small to be operated commercially or to support staff. A Council employee (Overseer) who resides locally is paid $100 per week to manage the Park operation. Visitors arriving at the Park need to telephone the Overseer who will then come down to the Park and unlock the ensuite facilities and collect the fee. Cleaning and maintenance is undertaken by Council works staff based in Boggabri. Issues with the current management arrangements include: The telephone number on the sign at the Park is out-of-date and is an after hours number.

Overseer is not always readily contactable and/or there is a delay in opening the ensuite facilities.

Visitors do not have access to the amenities until they are unlocked. Maintenance and cleaning standards are average to poor, with the Park presenting as tired.

Some of the long term caravans do not present well and maybe in breach of the Regulations. This

has not been addressed by either the Council or the Overseer. The Park is not complying with the Regulations in that information on the Park is not given to

visitors, while long term residents are not receiving a Tenancy Agreement. Payment is via cash or cheque with no facilities for eftpos transactions.

The Park is not marketed or promoted, nor is it adequately signposted from the Kamilaroi Highway.

These issues need to be addressed regardless of whether or not Council proceeds with upgrading and/or expanding the Park.

8.2. Additional Management Requirements  The provision of on-site accommodation and/or an amenities block in the Caravan Park will increase the demands on management. If on-site accommodation is provided, the Park will need to be managed more along the lines of a motel. The additional management requirements are likely to include: The need for a great on-site management presence as a result of the higher level of visitation and

more frequent turnover of guests. There may also need to be a night-time presence on site depending on the mix of guests.

Increased administration - there are likely to be more inquiries and bookings, with the need for

improved management and financial systems. Increased cleaning and grounds and building maintenance - additional buildings, facilities and

grounds to clean and maintain. The cabins and/or miners accommodation will need to be cleaned after each 'letting'. There may also be opportunity for the manager / caretaker to offer a cleaning service on a fee-for-service basis for longer stay guests.

Linen service - towels will need to be changed daily, while bed linen would need to be changed

between lettings, or weekly for longer stay guests. Dirty linen would need to be collected and either washed, dried and folded onsite, or bagged and sent off-site to a commercial laundry.

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Marketing and promotion of the Park. For longer stay cabin guests, it would be desirable to have in place a cleaning agreement, with the cabins being cleaned once or twice a week on an agreed fee basis. Regular cleaning will assist in extending the life of the cabins and enable management to address issues before they become problems.

8.3 Management Examples - Small Caravan Parks A number of the smaller towns in the New England - North West Region have caravan parks of a similar scale to Boggabri. Information was sought on the management arrangements for these parks as possible options for Boggabri. Quirindi Caravan Park Quirindi Caravan Park has 20 powered sites, 3 cabins and one onsite van. The Park has one permanent resident. The Park is owned by Council and leased to a private operator. The lessee is responsible for the day-to-day operation of the Park and all operating expenses except major maintenance, which is undertaken by Council. The Park is managed by a couple who reside on-site. The wife is primarily responsible for the Park operations, while the husband has outside employment. The permanent resident (a retiree) helps out with the grounds and maintenance in return for reduced rent. The couple also own a few houses in town that they operate in conjunction with the Park. The houses and cabin accommodation are the main income generators. There is not sufficient income from the Park sites alone to support the couple. The operator advised that they need more cabins for the Park to meet demand and become a viable operation. As their lease is relatively short, they are not prepared to invest in cabins. Ashford Caravan Park Ashford is located in Inverell Shire, close to the NSW-Queensland border. The caravan park has 24 powered sites, plus an amenities block and camp-kitchen. The park has one permanent resident, whose main function is to have a presence on site - a security role. The Park operates on an 'Honour Box' system. The presence of the permanent resident helps in encouraging visitors to use the 'Honour Box' as there is a perception that the resident will record vehicle number plates. Bookings and credit card payments can be made through the nearby Rural Transaction Centre (RTC) during business hours. Cleaning and maintenance is undertaken by Council works staff based in Ashford. Little Gem Caravan Park - Bellata The Little Gem Caravan Park has 12 powered sites, two of which have permanent occupants. The Park is operated in conjunction with an automotive / rural supplies and repair business. The operator lives in close proximity to the Park and checks it daily. The operator advised that the demand is primarily for cabins and that the Park would be far more profitable if they had cabins to offer. Elanbe Caravan Park - Boggabilla Elanbe Caravan Park at Boggabilla has 42 powered sites, 6 self contained units and 4 cabins. The Park is commercially operated with on-site management. Most of the Park income is generated from the units, cabins and permanent residents.

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Warialda Caravan Park The Warialda Caravan Park has 3 cabins and 34 sites of which 24 are powered tourist sites. The Park is owned and operated by Council. Council employs 2 staff to clean all Council premises (including the Caravan Park) in Warialda. The Park amenities are cleaned 7 days per week. One of the Council cleaners lives across the road from the Park and is responsible for taking bookings and collecting fees. When she is not available the other cleaner is 'on duty'. The telephone number for the Park is forwarded to the mobile of the cleaner who is on duty. The Park operates at a loss. Council is proposing to expand the Park and re-structure the operation to increase returns and potentially build the business to a trading position where the Park can be leased out. Glen Innes Glen Innes has five caravan parks, two of which are smaller parks - The Fossicker with 24 sites and 8 cabins and the Glenrest Tourist Park with 28 sites (12 long term / 24 tourist) and 10 cabins. Both parks are operated commercially, with the cabins being the main source of income. Many small caravan parks in the smaller rural towns that are owner operated or leased tend to be operated in conjunction with another business (eg hotel, service station etc) or by a couple with one partner having external employment. The most financially successful small parks are those with a high proportion of permanent resident and/or a number of cabins that achieve good occupancy rates.

8.4. Management Options for Boggabri Caravan Park While the current management arrangement for Boggabri Caravan Park is cost effective for Council, it is not conducive to building the Park's clientele nor to maintaining the Park to a high standards. The Park assets have, through age and low key management, deteriorated. A retainer arrangement is a disincentive to having guests stay at the Park as the retainer is paid regardless of occupancy rate, with low occupancy rates resulting in minimal demands on the Overseer. The management structure adopted for the Park will primarily depend on the level of development undertaken, which in turn will impact on profitability. Possible management options include: Joint management of the Pool & Caravan Park - Given the location adjacent to the Pool, it may

be more effective for the Pool Manager to oversee the Park operation. The Pool is open for 6 months of the year, with Pool staff available to take bookings, collect fees and clean and maintain the Park area. In winter, the Pool Manager works as part of Council's parks and gardens staff and could potentially continue to manage the Park. If the Park is expanded to include cabins and/or miners accommodation, then a casual cleaner would need to be hired to clean these facilities.

Local business takes on the Park Management - as an adjunct to their business, possibly

putting in place some form of profit sharing arrangement with Council, so that there is an incentive to build the business.

Onsite Caretaker - If the Park is expanded it may be viable to install an on-site caretaker /

manager. Lease - With the Park leased to a local business or individual, with the rent set to cover Council's

debt repayment and possibly the depreciation costs. Another option that Council could consider is the use of security code lock systems. This operates at Patonga Camping Ground, with a similar system also in place in the Formule 1 motels. At Patonga the Park is manned for a few hours each day. People arriving outside of these hours call the Overseer and are allocated a site. Payment is made over the phone by credit card, with the guest then being given a 4 digit security code to access the amenities. Formule 1 motels work on a similar basis, with credit cards being used to purchase and access rooms after hours.

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APPENDICES

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Appendix 1 PLANNING FRAMEWORK The following section summarises the legislative and regulatory framework which governs the management of the Boggabri Reserve and the development and operation of the Boggabri Caravan Park. Legislation The approval and operation of the Boggabri Reserve and Caravan Park must be in accordance with the following NSW Acts and supporting Regulations: Crown Lands Act, 1989 Local Government Act, 1993 Local Government (Manufactured Home Estates, Caravan Parks, Camping Grounds & Moveable

Dwellings) Regulation 2005 The Residential Parks Act 1998 & Residential Parks Regulation, 1999 The Holiday Park (Long Term Casual Occupants) Act 2002 & Regulations Environmental Planning & Assessment Act, 1979

Crown Lands Act 1989 Crown reserves in NSW are subject to the general land management objectives and provisions of the Crown Lands Act 1989, with the objective of this Act being to ensure that Crown land is managed for the benefit of the people of NSW. The objectives and principles of Crown Land management are listed in Sections 10 and 11 of the Act, with the principles being that:: Environmental protection principles be observed in relation to the management and administration

of Crown land. The natural resources of Crown land (including water, soil, flora, fauna and scenic quality) be

conserved where ever possible. Public use and enjoyment of appropriate Crown land be encouraged.

Where appropriate, Crown land should be used a managed in such a way that both the land and

its resources are sustained in perpetuity. Crown land be occupied, used, sold, leased, licensed or otherwise dealt with in the best interests

of the State consistent with the above principles. Local Government Act 1993 Council is bound by the provisions of the Local Government Act. The operation of caravan parks and camping grounds is subject to operational approval issued under Section 68 of the Act in accordance with the Local Government (Manufactured Home Estates, Caravan Parks, Camping Grounds & Moveable Dwellings) Regulation 2005. Local Government (Manufactured Home Estates, Caravan Parks, Camping Grounds & Moveable Dwellings) Regulation 2005 This Regulation sets the requirements and standards for the design, development and operation of manufactured home estates, caravan parks and camping grounds. A caravan park must comply with the provisions of this Regulation before Council can grant approval for the Park to operate. The provisions of these Regulations must be complied with in the upgrading and/or extension of Boggabri Caravan Park.

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The Residential Parks Act 1998 & Residential Parks Regulation The Residential Parks Act protects the interests of long term residents in caravan parks, with the Act requiring caravan park managers to enter into tenancy agreements with all long term residents. A long term resident is defined as a person whose principal place of residence is a dwelling on a site within a caravan park. The Act specifies the provisions that need to be included in the tenancy agreements and the rights and obligations of owners and residents. This Act applies to the long term residents in Boggabri Caravan Park. The Act requires that Residential Tenancy Agreements be entered into with any person staying more than 30 days in a Park. People can stay up to a maximum of 60 days without a Tenancy Agreement, however after 60 days, the Act deems that a Tenancy Agreement applies. In 1996 the long term residents in Boggabri Caravan Park were offered Tenancy Agreements, however none were prepared to enter into the Agreement. Since this time, Tenancy Agreements and other information required by legislation have not been given to the patrons of Boggabri Caravan Park. Any Park user who has been staying in the Park for more than 60 days is now covered by the standard Tenancy Agreement. The Holiday Park (Long Term Casual Occupants) Act 2002 & Regulations The Holiday Park (Long Term Casual Occupants) Act sets out the rights and obligations of owners of holiday and storage vans that occupy short term sites in caravan parks, including the provision for an occupation agreement between the van owner and the park owner. At present there are no Long Term Casual Occupants in Boggabri Caravan Park. Environmental Planning & Assessment Act, 1979 The Environmental Planning and Assessment Act, 1979 is the Act governing the planning and development consent process in NSW. Section 79 of the Act details the factors that Council must take into consideration in processing Development Applications. Statutory Requirements Narrabri Local Environmental Plan (LEP) Narrabri Shire LEP is the local planning instrument that zones land within the Shire for a range of different uses and activities. Boggabri Caravan Park and the adjoining Swimming Pool and reserve area are zoned 'Special Uses 5A - Community Uses' under the provisions of this LEP. The objective of this zone is to ‘identify the need for and provide for adequate and efficient utility services and community facilities’. With development consent, community uses (such as the Caravan Park and Pool) are permissible on the Reserve. State Environmental Planning Policy No. 21 – Caravan Parks SEPP 21 requires that sites within caravan parks be designated as short (tourist) or long term sites, and details the matters that Councils must take into consideration in assessing development applications for caravan parks. These matters include the suitability of the site and locality for a caravan park, demand for both tourist and long term residential sites and the facilities and services proposed in the park and available in the surrounding area for caravan park occupants. State Environmental Planning Policy (Infrastructure) 2007 The aim of SEPP (Infrastructure) is to facilitate the effective delivery of infrastructure across NSW. It streamlines and standardises the development consent process for Government infrastructure projects and for development on land owned by some Government Authorities. Under Section 65(2)(d) any development on Crown Reserves for the purposes of implementing a Plan of Management is permitted without development consent. In addition, under Section 65(3), Council can develop a range of

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facilities (including roads, amenity blocks, visitor centres) on reserves without requiring development consent. Policies & Guidelines Boggabri Caravan Park must also comply with the following policies: Crown Lands Caravan Park Policy 1990 The Crown Lands Caravan Park Policy sets the framework and directions for the management and administration of caravan parks and camping grounds on Crown land. The objectives of the Policy are: To develop a caravan park and camping ground system on Crown land which meets the needs of

the community and provides a range of facilities for short term use, long term use and camping. To manage caravan parks on Crown Land in an environmentally acceptable manner, to provide for

the protection of important scenic, natural and cultural resources in a manner consistent with the objectives and principles of the Crown Lands Act 1989.

To ensure that caravan parks and camping grounds on Crown Land are managed in a way that

provides appropriately for the recreational and social needs of the community. To encourage the entrepreneurial management of caravan parks on Crown land in order to provide

the community with an appropriate standard of facility and the Government with an optimum financial return for the land it provides.

The Policy requires that caravan parks on Crown Land are classified as either Tourist Parks or General Parks, with the Boggabri Caravan Park being a General Park. The Policy does not place any restrictions on the mix of long term, short term or camping sites provided in General Parks. Fire Protection Policy for Caravan Parks on Crown Reserves and Leasehold Lands 2005 This policy recognises the risk posed by fire to occupants of caravan parks and requires park managers to comply with statutory requirements relating to fire prevention, and to put in place appropriate provisions and fire protection systems.