Teresa Behan, Deputy Director of Community Services, submitted a report on Monday to the CoW meeting of Council that gave an overview of the operational performance of the four waterfront “business” units: the Marina, the Campground, the Marie Dressler Dredger and the Harbour. The intent was “to enhance transparency for upcoming budget deliberations”. The report was for 2021 YTD and given their seasonal nature, this covers most of the year’s activity. Teresa notes that the Marina and Campground are funded by user fees (breakeven with any profit as a dividend to the Town), the dredger is funded by its users which includes the Harbour and external contracts and the Harbour is funded by the tax levy. I think that’s the first time I’ve heard that so clearly stated.
Given the impact of Covid-19, it was a difficult year yet in general, budget targets were met. But the details are worth looking at. Download Teresa’s full report from the link below but let’s look at highlights of both Operations and budget impacts.
Report Highlights
Opening of the Marina and Campground were delayed 5 weeks so 5 weeks revenue was lost.
Marina
- Approx. 95% of seasonals occupied their slips in 2021 – a strong increase from 2020
- Seasonal Revenue was $203,000
- Transient Revenue was $157,000 approx. $12,000 over budget target
- Fuel Sales were $300,000, approx. $100,000 over budget target
- Lift In/Out has met budget target of $35,000
- Launch ramp exceeded budget target of $7,000
- Reservations have exceeded budget target of $5,000
- Storage will exceed budget target of $40,000
- Received almost $6,000 in student wage grants
- Overall, will meet revenue target of $767,040 and will transfer $70,000 to reserves.
Campground (previously called the Trailer Park)
- All seasonals occupied their sites for 2021.
- Seasonal Revenue met budget target of $22,500
- Transient Trailer Revenue met and exceeded target of $270,000
- Transient Tent Revenue fell approximately $2,000 below budget target
- Received $2,950.44 in student wage grants
- Hosted 6406 transient occupancy stays
- Campground will meet revenue target of $331,000 and transfer $25,000 to reserves.
Marie Dressler Dredger
- Silting in (or filling in) of the harbour basin has increased dramatically due to the high lake level events in 2017 and 2019 and the deterioration of the breakwater.
- Shoreplan Engineering have been contracted to provide coastal and infrastructure design management for the repair and redesign of the harbour walls being cognizant of the silting issue in their plans.
- The harbour mouth/entrance must be a depth of approx. 12′ and the launch ramp exit must be a max. depth of 8′ to 10′
- The Coast Guard are unable to bring their rescue vessel into her home berth annually until the spring dredging is complete.
- In 2021 the dredge worked with heavy equipment to remove a large sand bar that had formed in the west harbour basin and was successful in moving 4600 cubic meters of sand to raise the grade of the west harbour beach
- The dredge moved additional dredgeate from the harbour entrance creating a safe navigational path between the lighthouses.
- The west basin has a shallow depth of 3′ to 4′ and the sand bar and filing in of the crescent shaped inner beach area will impact the user groups that paddle in that portion of the basin.
- The harbour Budget transfers $50,000 and the Marina Budget transfers $30,000 into the Dredging Revenue Account for services rendered.
- In 2021 a contract for services was fulfilled to Port Hope for $250,000.
- 2020 was the first year the dredge account had an excess of surplus over the maintenance and set up costs. Staff applied the remaining surplus to the outstanding unfinanced capital. In December 31st of 2020, $215,947.45 was left as unfinanced for the dredge, this amount relates to the original purchase of the dredge.
- An Asset Management Study is planned for the winter of 2021/2022.
Harbour
- Organized user groups were able to run programming for adults and children using a variety of equipment such as canoes, kayaks, paddle boards and dinghies.
- Day camps and after school programs were uninterrupted in 2021 as lab testing monitored E.coli levels – the improved E.coli counts are believed to be due to the extra dredging performed.
- Additional weekly lab testing was completed and mapped by staff at shoreline, 50′ from shore and 100′ from shore.
- The harbour pays $50,000 towards maintaining the depths for in water users. Received $11,300 in student wages
- Revenue targets were met, and expenditures were kept below proposed budget.
The provision by Town Staff of the above details is certainly a good thing and helps the public understand more about these operations and their financial management.
Links
Print Article:
This 4-page report from Director T. Behan is a good example of Staffs direction toward transparency and public engagement. It is not a final year-end report but it is extremely welcome step to whoever follows waterfront activities. There are still some numbers to come to complete the picture. It is hoped this will form part of an Annual Report on theses 4 entities, so questions will not remain. Thanks also to Manager J. Behan
The definition of an accounting reserve is “ profits that have been appropriated for a particular purpose”.
I assume then, that the fact the Marina and Campground have contributed to reserves means they were profitable in 2021.
Well done!
John King:
The budget documents claim a profit of $185K. This is highly suspect. The prior two years had substantial losses and the marina has never had a profit this large; $100K maybe. Also note that the 2021 YTD only includes 9.5 months of operations, not 12. I fully expect the marina’s final 2021 YTD “profit” to be significantly less. See my comment to JimT below.
Like Warren, I think John’s report is excellent. Even more than this I’d also include my ‘feeling’ about the report content. This report/content is probably the most positive, clear I’ve heard/read – ever! Congrats to Teresa and staff for putting this report together.
The word “revenue” occurs 10 times in John’s report yet there is no occurrence of “expense” or “profit” or “loss” . What were the expenses? What was the bottom line for the year?
Yes, what about the significant maintenance costs on the marina building; workfolk we’re there for weeks this summer; then the repaving of the marina parking lot? Perhaps these are in a detailed report?
Yes, my thoughts exactly, Ken.
For example: “Fuel Sales were $300,000, approx. $100,000 over budget,,,”.
That’s all well and good, but how much did it cost us to provide all that fuel? If it cost us $300K, then we did all that effort for nothing. If it cost more, we paid some of our own money to provide the fuel.
Let’s not be dazzled by the big numbers when they tell only ½ the story.
JimT,
Your comment is totally on target.
Re fuel sales: the gross margin (profit) in 2019-2021 and the 2022 proposed budget are: $29,646 (17.66%), $20,528 (13.15%), $33,776 (11.66%) and $55,000 (25.00%) respectively. This “profit” helps offset related wage, maintenance insurance costs and the non-recoverable HST (1.75%). Given the declining gm trend, I wonder why staff believe the gross margin will double to 25%
As I outlined in my open letter to Council,
https://cobourginternet.com/home/letters-to-the-editor/74-open-letter-to-cobourg-council-2022-budget
The 2022 budget presents Council with an unfair (unrealistic) challenge, in that the 2021 YTD com amounts are as of Oct 19 and do not present a full years operations for comparison.
Further, I am skeptical of the 2021 comparative numbers. Consider the marina total surplus or loss for 2019-2021 and 2022 budget:
$2, $0 $185,237 $0. This is after adjustments for reserve and parking “revenue”. The unadjusted surplus/loss is -$32,227, -$112,744, $185,237, $34,639
I am highly skeptical of the claimed $185,237 surplus for 2021, particularly after 2 loss years and the fact that the marina has never made this much profit.
The same sort of questionable data can be found throughout the proposed 2022 budget.
The 2022 proposed budget indicates that the 2021 budgeted mil rate base was $24,793,569 and the 2021 YTD (9.5 months) $24,746,491. In other words, the year’s budget has been spent in 9.5 months, leaving a further 2.5 months to go. I wonder how big the overspend will be!
How Council can hope to make sense of this budget and come to a reasoned evidence based evaluation is a mystery to me. Perhaps it will be… close your eyes, hold your nose to block the stink and vote….
Best practice indeed!
Why do we have seasonal trailer sites Have the same families occupied these for yrs. Obviously there is No income from seasonal compared to transient
any Trailer Pk owner will tell you this
Sandpiper:
The following is from 2019 which is non-covid, therefore a “normal” year. I believe the seasonal sites are “grandfathered” and are slowly being eliminated. There were 7 (down from 10) seasonal sites in 2019 generating $38.7K in revenue” an average of $5.5K per site. More than double what the marina gets per slip.
Transient sites (daily, weekly, monthly) generated $252,013. Tents generated $11,362
Excellent clear & important report John!
Nice to see profits from both the campground and the harbour. Is the cost of operating the Yacht Club and the marina building also covered? That would be very positive to see no added municipal expense for everything along the water front. Is this a considerable improvement from past years?
Be carful. As Ken Strauss pointed out the word ‘profit’ is not used in the report. There was more revenue than expected or estimated. This is not the same as profit. The federal government changed its estimate of the federal deficit by nearly $30 billion. This is not a profit of $30 billion. It means the ‘loss’ or deficit for the year will be $30 billion less than the $381.6 billion than was previously projected. There is no ‘profit’, just a smaller ‘loss’ than expected. The campground and harbour had more revenue than expected. They may still have an overall loss, or cost, to taxpayers. The harbour is an important part of Cobourg and if it should be operated as a business with a profit, to break even or run at a loss is a different thing entirely. It is good that ‘revenues’ are higher than projected. Plan for the worst and hope for the best.
So much for “Transparency” in Cobourg….
Kevin
Not sure what you mean by the sentence “The harbour is an important part of Cobourg and if it should be operated as a business ….”.
The waterfront adds signicantly to our shared quality-of-life just as well laid out and maintained streets and sidewalks do.
While the planning by consultants, Town staff time in organizing the execution of “the plan” and then contracting for the labour and materials needed to physically implement “the plan”, should be carried out in a business like manner, should we really expect that the use of a particular amenity, once complete, result in a profit? If so explain that when it comes to roads or sidewalks.
At one time there were several fire companies available to Cobourg building owners and to have their services available when your building as alight you had to have had a contract with one of them. Now fire services are available to all, from one well trained and equipped source, financed by taxes.
Keith, nobody suggested that the waterfront had to be operated at a profit. In the interest of transparency, a part of all of our Councilors’ election promises, our waterfront’s net cost (or profit) should be clearly reported to our residents.
BTW, I’m unclear of the relevance of your fire companies comment. Are you suggesting that various portions of our waterfront should be operated by several competing companies?
Net-net, the harbour is not needed…it’s a luxury, and it looks like we will pay dearly to have it…plain & simple.
Keith, I am not suggesting that the harbour be operated at a profit or as a business. The harbour, like many other things in Cobourg, comes at a cost. Somebody needs to know the actual costs of operating the harbour in order to make decisions. Parks are also an example of something that has a cost. Many citizens use the parks and likely do not mind some taxes being used to maintain them. Maybe Doug meant to write Maria instead of Harbour. The Marina will transfer $70,000 to reserves which might be a profit. However, in the report the Maria is operated by user fees to breakeven and it met the revenue target. Does this mean expenses were $70,000 less than budget? If so, why?
Doug:
The operating and capital expenses of the marina building are the marina’s responsibility. The operation of the CYC building, while Town owned, is the responsibility of the CYC.
As for the harbour, there are significant expenses that are the Town’s responsibility: repairs to the East Pier, breakwater, harbour walls, lighthouse, west headlands….etc… $10M+ over the next few years.