Equestrian WA & State Equestrian Centre: Future Governance
Overview
The State Equestrian Centre was opened in 1985. It was built on land donated by the developers of Brigadoon Estate, the construction of SEC was funded by Federal Government (50%), State Government (25%) and private (25% EWA members). When completed the SEC was gifted to the City of Swan, the deed of gift requires that the SEC is leased to Equestrian WA. EWA has leased the SEC since 1985 with the current lease being extended to December 31st 2021.
In 2020 Equestrian Western Australia (EWA) with funding from the Department of Local Government, Sport and Cultural Industries (DLGSC) commissioned an Equestrian Western Australia and the State Equestrian Centre (SEC) Business Model Review. The goal of the report was to identify the financial viability of the EWA and the SEC and the effects of the viability of different business models.
Equestrian WA desired outcome for the State Equestrian Centre
The State Equestrian Centre has been the home of EWA for 35 years. It is an intricate part of equestrian sport in WA, the SEC was built for EWA, and over the years we have invested both monetarily and physically in ensuring its ongoing success with a strong focus on community participation and shared use.
EWA is strongly committed to the SEC management both at governance and operational level in the future and the continued operation of the SEC is paramount for the continued success of equestrian sport in WA.
EWA proposes the formation of a State Equestrian Centre Not for Profit incorporated entity to manage the SEC at governance and operational level. This would require the establishment of new incorporated body and governance model for the SEC.
Currently, EWA operates the SEC within EWA’s governance structure. The new independent SEC would require the separation of EWA and SEC at both a governance and operational level to establish two entirely separate entities. This will allow EWA to focus on its role as a State Sporting Association representing members and supporting equestrian clubs in WA and would enable the SEC to focus on the development and operations of the SEC in serving equestrian and local communities.
Why change management structure
State Equestrian Centre operations
EWA is no longer able to support the financial operational shortfall of the SEC and has been receiving financial assistance from DLGSC to maintain SEC operations since mid-2019. This means that no EWA member funds are currently supporting the SEC operations. While COVID-19 has negatively impacted the viability of the SEC in 2020, EWA recently received Lotterywest COVID Resilience funding that when combined with DLGSC operational support will enable the SEC to remain operational until December 2021.
The current estimated replacement value of the SEC is over $40million; the original build cost excluding land was $3.6million. As with any large aging sporting facility, the cost of maintenance and operational expenses is inevitably higher than the income that can be generated. The SEC is a highly used facility operating at full capacity on weekends with strong mid-week use; it is open 50 weeks of the year.
Asset management
The SEC is an essential part of the WA equestrian community, and EWA has strongly advocated during the past three years for funding required to both upgrade the facility and support operational costs.
Due to the age of the SEC, a significant investment of funds approximately $15 million is required to redevelop and provide urgent works to maintain the facility fit for purpose. EWA does not have the resources to invest in the SEC at the level that is required. The future redevelopment will require a combination of City of Swan, DLGSC and Federal Government funds.
EWA acknowledges the long-standing support of the Department of Sport and Recreation has made to EWA and the SEC and encourages DLGSC to support the COS and EWA in ensuring the required funding for operational and asset management. This is required if the SEC is to remain safe and suitable for use.
The August 2020 SEC Asset Management Plan identified that $440,914 p.a* is required to fully fund the operation and maintenance of the infrastructure, and facility assets of the SEC excluding renewal, new works and upgrades. While an additional $509,870 p.a* is required to fund the renewals, upgrades and new works identified to 2025. (*this requirement is above the income the SEC already generates through current operations.)
Equestrian WA preferred SEC governance model
The EWA Board has initially identified its preferred governance model as a State Equestrian Centre Not for Profit incorporated entity. The formation of a Not-for-Profit Governance entity for the SEC was identified for the following reason:
- Preference to separate the operations of EWA with its primary role as a State Sporting Association and the peak body of Equestrian Sport in WA and that of the SEC a sporting facility that is used by EWA members, non-EWA members and various community sporting associations.
- EWA members have traditionally subsidised the operations of the SEC from member’s funds, the current financial position of EWA has resulted in the association no longer being able to continue financial support for the SEC. EWA is financially secure without the drain of the SEC and will be able to better support member and clubs.
- The formation of a NFP governing Board would enable greater inclusion of key stakeholders and shared responsibilities.
- Greater involvement with the City of Swan, the SEC owners to secure the funding required to maintain the SEC.
- Continued support by DLGSC
EWA will continue to engage with members and SEC user during the next six months. This process started at the EWA AGM followed by a meeting of all SEC sublease holders, home-based clubs and the two eventing clubs that use the SEC.
We encourage you to keep informed as we progress and please contact us should you have any questions.
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