Newsletter 12

RUAPEHU MOUNTAIN CLUBS ASSOCIATION (INC.)
Address: 33 Newbury Street,
PALMERSTON NORTH
Phone 06 358 3513
Fax 06 359 0300
Secretary Treasurer:
John Rockell 22 November,
1997 To Member Clubs
The last newsletter was sent to you after the April meeting of Council. Council met last on 12 October, just before the Annual General Meeting so this newsletter is aimed at bringing up to date those of you who did not manage to get to the AGM. Sewerage Scheme By far the most important problem facing clubs is the disposal of sewage from the ski field facilities area and Whakapapa village. In 1995 the scheme was being pursued vigorously by Ruapehu District Council with guidance from a Major Project Group which has representatives from the Council itself, and from RAL, the Grand Chateau, DoC, Skotel and from RMCA (Brian Anderson and Alan Thompson). Royds Consulting had produced a proposal for the scheme which consisted of pipelines from lodges to a main line which could pick up Whakapapa village effluent for piping out of Tongariro National Park to oxidation ponds and wetland disposal to the north-west of the park. Resource management consents were being sought. Construction was expected to take place in the 1997-98 summer. In September, 1995 Ruapehu erupted and skiing was interrupted. From June, 1996 there were further eruptions and the ski season was calamitous with a late August start. In July, 1996 RAL and clubs agreed it would not be possible to fund the scheme unless the situation changed. The Major Project group decided to defer further substantial work until there had been a year of volcanic quiescence. The mountain promptly quietened down. In April, 1997 RDC, without consulting end users, proposed to shelve the whole scheme, after billing the users for loan service charges on the amount already spent on the scheme. RDC believed it could not risk bearing the whole cost of the scheme in case a catastrophe rendered the ski area unusable and users were unable to pay their share of the expenditure on the scheme. Non-RDC members of the project group met in June and subsequently twice more and this led in September to a presentation and submission to RDC which set out reasons why RDC should continue to proceed with the sewerage scheme as an RDC responsibility. Brian Anderson told RDC that RMCA and clubs are still in favour of the scheme provided it remains affordable and supports RDC as the principal while RMCA has a direct input through the project group. RAL had compelling information to show how valuable the skiing on Ruapehu was to the whole district. Direct RAL revenue was of the order of $12 million to $14 million annually and there was a multiplier effect of eight times that for money spent in the district. RAL are, without doubt, the largest employer in the district. The Institute of Geological and Nuclear Science spoke of the relative unlikelihood of a major catastrophe compared with Auckland, Wellington or Taupo.
RDC responded by approving in principle continuation of the scheme but also asked for Ministerial assurance of a guarantee for the cost of the scheme should any catastrophe occur. At the time of the AGM no guarantee had been received from the Minister, nor was one likely to be received. Following the AGM, Chris Ryan, CEO of Ruapehu District Council and his chief engineer, Bruce Dobson along with others from DoC and RAL joined our members. Mr Ryan said the Council was impressed with what it had learned and he felt there were strong grounds for continuing with the scheme. His council would make a final decision in February, 1998. If RDC decides to pull out the scheme is most likely to be continued under the aegis of DoC. In discussion and however it might be continued, members expressed their concern at possible cost increases and made it clear that their support would be dependent on scheme costs being held down. It was suggested that at $5.5 million we have reached the top cost that clubs and RAL are prepared to pay. RMCA delegates will continue to be involved in decision making in the Major Projects Group. A number of clubs were understandably annoyed in February to receive a bill from DoC, with no explanation or details for their share of loan service charges. RMCA suggested holding back until supporting detail had been received. RMCA then asked for an explanation from DoC which said it was only acting for RDC and from which the information would have to come. An enquiry to RDC brought no reply at all. It was not until June that DoC sent, not to RMCA but to clubs, and in reasonable detail the makeup of the total charge and how it had been proportioned amongst clubs and other potential users of the sewerage scheme. RMCA accept that the charges are reasonable and clubs have been advised to pay. Probably the noteworthy aspect here is that if RDC and DoC wish to have a harmonious community then they must keep us all properly informed. In this case it would have saved months of delayed payments. Eruption Detection System RMCA President Ross Campbell was invited early in the year to join the EDS working group and has attended meetings since then. The old Early Warning System which concentrated on lahar hazard is getting well past its use by date. Not only is the equipment itself 17 years old, but the technology is well out of date. The bare minimum of maintenance is being done to keep the system going this year. The Institute of Geological and Nuclear Science has been contracted to devise a new Eruption Detection System for installation over the three years from 1997-98 to 1999-2000. The new system will measure the seismic amplitudes of movements within the mountain and establish whether a quake is volcanic or tectonic. Above a predetermined value of volcanic quake, it will measure any air blast it receives and if necessary, trigger a warning system. On an IGNS grading scale the 1995-96 eruptions were grade 3, which, according to IGNS might be expected on average each 45 – 50 years. (Iwikau village is outside the hazard area for a Grade 3 eruption.) The total cost of the new system is expected to be $466,000 over a 10 year period with the largest capital expenditure of $145,000 coming in the current year. In the current year the Iwikau clubs have a suggested amount of $16,100 to pay, with payments of $9,800 in 1998-99, $5,600 in 1999-2000 and thereafter $2,800. As proposed by DoC the total Iwikau club share of $60,000 equates to 14% of the total system cost, while RAL’s is 66% and Whakapapa Village’s is 20%. DoC’s total share has been suggested at $40,000 over the current 2 years.
While RMCA recognises the value of having a warning system it is not completely happy with its suggested share believing there are other organisations such as ECNZ and Tranzit Rail which will benefit as well. Also, there is a large number of visitors to the park who are not club or RAL skiers and for whom DoC should be accepting greater responsibility. There is more work to be done on the EDS before RMCA can be satisfied. RMCA will continue to monitor the EDS itself, and the allocation of costs. Ash that accompanies eruptions is a major irritant for clubs, damaging roofs and gutters and potentially contaminating water supplies. During the 1996 eruption, DoC asked RAL staff to disconnect club hut downpipes to avoid contamination of water in tanks. Unfortunately, in this process many downpipes were damaged. RMCA suggest that clearly marked water caps which can be easily removed would help avoid future problems. It is suggested that clubs have a schematic diagram, perhaps in formica, on the outside of their buildings showing the location of water caps, with a copy held by DoC at their information centre. A Suggested Downpipe and Rain Water Cap Design. Removable Rain Water Cap Roof Wall GutterAuto Trace Heating WireDownpipe Compliance with the Building Act
Newsletter 11 of 24 April carried an article about the requirements for monthly lodge inspections. In that newsletter clubs were told that RMCA Council had commended the Pinnacle Ski Club for initiating a scheme in which an IQP, Link Fire Services, had agreed to carry out the monthly inspections of lodges until July. Pinnacle has gone a step further and organised inspections for a full year by Link for ,at present count, 31 lodges. The inspections include all monthly inspections from August, 1997. One inspection in May, 1998 will include an inspection of fire extinguishers to meet Fire Service requirements. Each monthly inspection will cost a club $42 excluding GST except for May when the cost will depend 0n any earlier agreement the club had with Link and/or the cost of servicing fire equipment. Recently, one of our clubs suggested seeking a further reduction in the frequency of inspections and this proposal is being followed up with RDC. While investigating this possibility it has become clear that a number of clubs are failing to maintain their safety systems or to carry out the repairs which the IQP has reported as necessary. At the recent AGM, Mal McLennan of Snowline spoke in support of a reduction in the number of inspections saying that the Building Code required the frequency and type of inspections to be appropriate to the type and use of building. In the skiing environment where buildings were used intensively for only 4 months of the year 4 quarterly inspections should satisfy the minimum requirements. In the discussion which followed, several clubs voiced their satisfaction with the present system of monthly inspections and with the Pinnacle scheme and said that many clubs were used for more than 4 months by working parties and for summer activities. It was also pointed out that non compliance was a serious matter which could be expensive for both clubs and committees, and penalties were potentially severe. Nevertheless, some clubs could see advantage in being able to reduce the number of mandatory inspections for their lodges and suggested that clubs wishing to should still be able to continue with monthly inspections. RMCA will draft a new Compliance Schedule for Ruapehu District Council’s consideration in which it will propose 4 quarterly inspections of which those in May and November would have to be carried out by an IQP. If the proposal is not accepted RMCA will decide whether to seek a determination from the Building Industry Authority, which could supersede a contrary decision from RDC. In the meantime, clubs are reminded again that their lodges must be inspected monthly as required by their present compliance schedules and necessary maintenance and repairs must not be left undone. If your club is in any doubt about what is required phone or fax the RMCA Secretary Treasurer, John Rockell. Refuse Management DoC’s old rubbish collection truck and hopper has been replaced with a leased new compactor truck with a capacity of 70m3 which was the cheapest viable option. The expected annual cost of the service is $124,000, which is higher than before, but much of the additional cost results from tip fees of $35,000 pa which were not charged previously. Doc has installed plastic bins for the separate use of RAL and clubs, but the two bin system is being abused by both parties. RMCA will ask DoC to consider a combined bin collection, and RMCA will try to negotiate an apportionment between RAL and the clubs. RAL Accommodation Scheme RAL have reported the scheme is working well. It has used Aorangi and Alpine Sports Club for paying guests for which the clubs received about $45 (GST incl.) -the approximate charge those clubs make for non members – for dinner, bed and breakfast. There will be a tax consideration of which clubs will need to be aware. (See the item below.) DoC’s acceptance of this development appears to recognise the need for clubs to become more business aware and commercial in their approach and to confirm DoC’s desire to see club accommodation being more fully used. Taxation:
A recent Institute of Chartered Accountants course “Non Profit Organisations as Clients” was very useful and is recommended to club committees. It may be possible for CAs to get copies of the course notes (S547) from the Institute. The following information is not intended to be expert taxation advice. Clubs should not rely upon it, but obtain their own specialist taxation advice. The Tax Act contains a specific exemption for sporting bodies in Section CB 4(1)h, which reads as follows: “Any amount derived by any society or association, whether incorporated or not, which is, in the opinion of the Commissioner, established substantially or primarily for the purpose of promoting any amateur game or sport if that game or sport is conducted for the recreation or entertainment of the general public, and if no part of the funds of the society or association is used or available to be used for the private pecuniary profit of any proprietor, member, or shareholder of that society or association” As is normal with tax law, each word and definition must be fulfilled. • Clubs should ensure that their Constitution is specific about the objects of the club, and that these meet the requirement of primarily promoting sporting activities, with the ability to provide accommodation to further the sporting activities. • Ideally clubs should be registered as an Incorporated Society. • More than 50% of income received should be used for the promotion of any amateur game or sport. • The IRD should have been approached for tax exempt status (required before banks will stop deducting withholding tax on interest bearing accounts and deposits). There is very little applicable NZ tax law, but the Australian “Tweeds Head Bowls Club v Federal Commissioner of Taxation” case is applicable to clubs earning income from non members – it was decided in favour of the Club. With the new taxation penalties regime it is important that clubs get their taxation position clear and correct – including GST and FBT obligations. Committees of an incorporated society are being looked upon as having responsibilities analogous to the new obligations of Company Directors. In some cases the responsibilities of non-incorporated societies may be greater. The law keeps changing – keep up with it! The RMCA President, Council and Secretary/Treasurer wish you all a very good Christmas with lots of overseas skiing, good weather for summer working parties, and best wishes for an early, snowy, and volcano free new season.