For Leisure & Community Policy Panel – 1/11/05

THREE RIVERS DISTRICT COUNCIL

WATERSMEET COMMUNITY HIRE

OUTLINE BUSINESS PLAN

October 2005

Contents

1.Introduction

2.Executive Summary

3.Service

4.Operational Requirements

4.1Staffing

4.2Volunteers and casual staff

4.3Support

4.4Catering

4.5Equipment

4.6Building

4.7Capital Expenditure

5.Marketing and Pricing

5.1Potential Usage and Income Targets

5.2Potential Hirers

5.3Marketing

5.4Pricing

6.Risks

6.1Risk & Performance Management

7.Action Plan

8.Conclusion

Appendices

AHire Income Analysis 2002-04...... 14

BProposed Hire Charges 2006-07...... 18

C Watersmeet Revenue Budget...... 19

1.Introduction

This report describes the basis on which Watersmeet can be successfully operated by Three Rivers District Council as a community hire venue from 2006/07 onwards as agreed by the TRDC Executive Committee on 15 August 2005 ‘subject to a further report relating to staffing, facilities, hire charges and detailed financial implications’. It includes projections for the levels of potential hire usage based on previous actuals, and recommendations for hire charges for 2006/07.

The operation described below aims to:

  • Provide a high quality hire venue for the benefit of the public
  • Encourage and service a variety of community, private and commercial use through tailored pricing, promotion and facilities
  • Adequately balance issues of risk and cost to the Council

2.Executive Summary

  • With no promotion of live events or films to accommodate, Watersmeet has the potential to exceed past usage as a hire venue.
  • Amateur drama productions, dance school, student and school showcases, fine art society lectures and community group meetings will be serviced by a core multi-skilled staff team, supported by volunteers and casual staff. Staff costs will be kept to a minimum, and will scale up as business is generated.
  • Hirers will run their own front of house, catering and box office operations, with venue staff ensuring safety and compliance with licence regulations.
  • Hire charges will be reduced to 2002/03 prices to stimulate bookings.
  • A successful and sustainable hire service can be built up at relatively low risk to the Council, within budget limits already established.

3.Service

Watersmeet will concentrate exclusively on developing and servicing hire events, and will only open to the public when such events are running.

Hirers will be offered full technical and event management support, but all aspects of marketing, ticket sales, catering and merchandise will be the responsibility of the hirer alone. The venue will not promote any events or films itself.

Hire charges will be kept low, in order to encourage the return of previous hirers and the development of new usage. It is proposed that charges for 2006/07 will be based on those used in 2002/03, a reduction of up to 50% on recent rates. Community use will continue to be encouraged, while taking account of the need to also raise commercial income in order to cover overheads and so underwrite concessionary charging. New initiatives to reduce costs for regular community usage will include ‘standby’ and ‘self-setup’ rates (see 5.4 below). Note that a hire-only Watersmeet will have to deduct VAT from all its income; these costs will have to be absorbed by the operation and not passed on to hirers, very few of whom will be VAT-registered.

Staff will be based in the building solely to manage hire bookings, prepare for and run booked events and maintain the building and equipment. There will therefore be no regular daytime box office/reception function. All advance sales will be the responsibility of hirers, with the box office counter made available for door sales by the hirer’s staff.

Since no events will be promoted by the venue itself, there will be no capture of live patron data for mailing lists, although a small mailing list will be maintained through ‘opt-in’ response cards distributed at events. A modest diary listing of forthcoming events could be published, but what marketing resources the venue will have will be focussed on promoting new hire business. Hirers will be given pre-printed (Databox) tickets, to ensure that licensed capacities are not exceeded.

Without an ongoing promotions programme, it will not be cost effective to maintain an in-house bar and catering operation, at least initially, as intermittent programming will lead to stock wastage and unacceptably high overheads. Hirers will be offered an empty bar and kiosk, giving them the opportunity (at their own risk) to generate their own catering income at events.

Venue staff alone will act as Designated Premises Supervisors (as described in the Licensing Act 2003), and will monitor the conduct of bar and event operations in order to ensure that licence conditions are upheld. Event caterers will also be identified should the hirer require them, with a cover charge or commission going to the venue.

Venue staff will act as front of house managers for booked events. All other front of house staff or volunteers will generally be provided by hirers. Venue managers will train the hirer’s staff in emergency procedures, to ensure that licence conditions are upheld during events. At the same time, the Venue Manager will seek to recruit and maintain a group of casual staff and volunteers to provide cover should the hirer require it, for an additional charge.

The Premises Licence requires that five trained attendants are required for a full house in the Auditorium (in addition to catering staff). Hire agreements will make it clear that the provision of adequate staff, trained to the satisfaction of the venue management and willing to accept their supervision where required, will be essential if a booked event is to proceed.

Previous hirers have repeatedly praised the quality of technical support offered at Watersmeet. A hire-only business will only succeed if such quality of support can be maintained. Core technical staffing will be provided for all events as required, while additional casual technicians will be available for a further charge. Use of technical equipment will be either included within the hire charge if equipment is retained, or possibly rented from a third party (see 4.5 below).

4.Operational Requirements

4.1Staffing

To deliver the above service, the staff team at Watersmeet will have to be multi-skilled and scaleable. The analysis of previous business in Appendix A shows that nearly all booked events will require a minimum of two venue staff, one acting as a technician, and one looking after front of house. Prudent risk management suggests that it would be unwise to admit the public at all without two fully trained employees on the premises. It will be difficult to find reliable casual staff for such duties, and risky to offer an event service which depends on casuals in order to operate. It is therefore proposed that the operation should begin with the following staff:

Venue Manager (Full-time, SO1/S02)

  • Responsible for all aspects of venue booking and operation
  • Development of new business after launch campaign
  • Experienced in event lighting, sound and stage management
  • Front of house supervision
  • Building management

Venue Assistant (Part-time core plus additional hours, Scale 6)

  • Experienced in event lighting, sound and stage management
  • Front of house supervision

Each of these staff will be required to cover both technical and front of house duties. Additional casual technicians/house managers will also be required. Cleaning will be contracted out, and scheduled around events. The Venue Manager and Venue Assistant will also be available to provide occasional technical assistance to The Centre and other leisure venues where required. As bookings develop, venue staffing will be scaled up, first by building the Venue Assistant up to a full-time post, then by adding a further part-time Venue Assistant with the same multi-skilled brief (See Appendix C for budget). In time the Venue Manager post could be upgraded, allowing them more time for promoting and developing bookings.

4.2Volunteers and casual staff

Although the provision of front of house assistants will be the responsibility of the hirer, the Venue Manager will also actively recruit and train a pool of casual and volunteer staff to be made available as required. The ability to recruit and retain such a pool will depend on the volume of business achieved, and will need to be closely monitored.

Volunteer recruitment will be encouraged by using an unpaid volunteer co-ordinator. As usage of the building develops, volunteers will also be able to fill a reception/ admin role, provided that adequate training and support are provided by the Venue Manager to ensure security and customer service. Reintroducing an advance box office service in the future would involve significant staff overheads, although these could be partly offset by charging hirers a box office commission (which generated £8,490 in 2002/03). Volunteers who identify more strongly with an individual community hirer may be willing to support the venue indirectly by volunteering as front of house assistants for the hirer, or by keeping their hire charge down through the ‘self setup’ option.

4.3Support

The Venue Manager will report to the Head of Leisure Services. While the Venue Manager will negotiate all bookings, administrative and accounting support will be required from the Leisure Admin team. As business develops, a part-time Administrator may be required in the building.

4.4Catering

Making Watersmeet ‘self-catering’ by providing hirers with an empty bar, kiosk and kitchen, will remove opportunities for secondary income to the venue, but will also remove the associated risks. Some initial capital outlay will be required in order to make the upstairs kitchen compliant with Food Hygiene legislation; offering hirers space to store and lay out food, and washing facilities. Hirer charges will include use of the kitchen; hirers without caterers will be offered contract caterers provided by the venue for a cover charge or commission. Vending catering will be operated by the venue.

4.5Equipment

Current lighting and sound equipment will be adequate for the building’s initial requirements. Additional capital equipment could be purchased where it would generate hire income (e.g. data projector).

An equipment hire company has approached TRDC with a possible offer to buy the existing lighting and sound equipment. This would then be stored on the premises and maintained by the purchaser’s staff, and offered to hirers (and others) for rental. This would relieve TRDC of ongoing maintenance costs, staff time, and possibly of replacement costs. A full cost benefit analysis would be required before a formal proposal could be considered.

4.6Building

The building is currently being brought back into commission for the demanding requirements of the 2005 pantomime, including essential repairs to the electrical installation required by licensing regulations. Little further work will be required to make it fit for purpose as a hire venue (but see 4.4 above). Further limited conversion of the two largest dressing rooms would make them available for use as small meeting rooms. While further capital replacement of plant and decorative works will be required in due course, it is not anticipated that significant building or plant expenditure will be needed in the first three years of the operation.

4.7Capital Expenditure

The current TRDC capital budget includes the following capital allocations for Watersmeet:

2006/07 / £100,000
2007/08 / £80,000

5.Marketing and Pricing

5.1Potential Usage and Income Targets

Appendix A shows that without a promotions programme there is capacity for growing the hire business at Watersmeet beyond previous levels. The practical operating limit of the building is around 75% usage (allowing time for setups and maintenance). Promotions events were generally pre-booked into the evening and weekend slots that would have otherwise been attractive to hirers:

Without those promoted events, many more premium booking slots will be available to hirers. Of course capacity alone is not enough, and any growth in hire business would require additional staff, as well as additional hirers. Long beyond that point can be reached, hire business will have to be restored to previous levels. Appendix A also shows that 63% of previous hire income came from just 14 regular bookers:

Key Hirers 2002-04 / Number of bookers / Income
Amateur Drama / 3 / £ 32,908
NADFAS / 3 / £ 5,948
TRMS / 1 / £ 2,625
Dance Schools / 7 / £ 24,934
TOTAL / 14 / £ 66,415

Since Watersmeet Trust Limited (WTL) ceased trading in January 2005, all of these hirers have found other venues. Although initial contact with hirers is promising, it will take time, and commitment to the medium term future of the venue, to win them back. Even after they are persuaded, most of their events operate on lead times of up to a year (more in some cases). It will therefore take time to bring hire volumes and income up to previous levels, let alone beyond.

Note also that hire income at Watersmeet can no longer be treated as VAT-exempt. Appendix A shows that hire income in 2003/04 suffered due to uncertainty over the venue’s future. If 2002/03 performance is used as a baseline, and VAT is deducted from the hire income achieved in that year, the baseline target for the new operation will be £47,000 p.a. + VAT.

The projections for future hire income and occupancy targets are therefore as follows (see also 6.1 below):

Financial year / 06/07 / 07/08 / 08/09 / 09/10 / 10/11
Hire Income (net of VAT) / £18,800 / £32,900 / £47,000 / £61,100 / £75,200
Income as % of baseline / 40% / 70% / 100% / 130% / 160%
Target occupancy (sessions) / 75 / 127 / 176 / 222 / 265
Occupancy as % of capacity * / 9% / 16% / 22% / 27% / 32%
Income / booked session (net) / £252 / £259 / £267 / £275 / £283

* Capacity = 3 sessions x 363 days x 75% = 817

5.2Potential Hirers

Appendix A describes the categories of hirers who were regular bookers of Watersmeet. Any strategy for bringing hire business back to previous levels, and of exceeding it, should concentrate on the following markets:

a) Key past bookers

Amateur Drama

An initial meeting with representatives of the three regular amateur operatic companies who used Watersmeet has demonstrated enthusiasm for returning to the venue, but with the following issues:

  • Continuity – having lost audiences through the move to other venues, they are reluctant to risk losing them again for what could be only a temporary respite for the venue. They are looking for the longest possible commitment from TRDC.
  • Self catering - They strongly support the ‘self-catering’ option for box office and catering services.
  • Technical support – they want to see the quality of technical support previously provided by the venue maintained.
  • Other events – they are interested in discussing the potential for other events promoted/sponsored by themselves, and for using the building for rehearsal etc hire.

NADFAS

The three Fine Arts Societies who previously used Watersmeet are interested in coming back for lectures and study days. Issues will include:

  • Parking - They were the most important daytime hirers of the building, but only because of agreements for the use of Council staff car parks.
  • Costs – Some of their shorter bookings brought little revenue with relatively high set-up costs. They may benefit from ‘self-setup’ options.
  • Potential - There may be potential for bringing other similar groups in future. Current NADFAS hirers could assist with networking.

Dance Schools

A group of around seven commercially run dance schools were regular bookers of Watersmeet, at commercial rates, for weekend showcase events:

  • Income – Their events brought in high income at premium rates, as well as additional income through staff and equipment charges.
  • Capacity for growth – The previous promotion programme severely limited the availability of weekend evenings. Each new booking could provide 5% of annual target income.
  • Lack of competition – Existing bookers came from a wide area, suggesting a lack of available competitor venues.

Little research has been done into the potential of this market, but a Google search for the twenty dance schools nearest to Watersmeet found only one that was among the venue’s previous bookers.

b) Potential growth markets

Other Not-For-Profit Performances

Past bookers were limited to occasional fundraising events for local charities, often at special discounts below community rates, and an annual showcase for Watford Festival. This could be an important market for community benefit, but marginal costs will need to be closely watched. This sector could also benefit from ‘self-setup’ rates, using volunteers to reduce charges. Potential users could include:

  • Amateur drama productions
  • Youth theatre showcases
  • Student drama productions
  • School performances and showcases
  • TRDC Arts Development showcases

Commercial Productions

The staging of commercial productions on a hire basis is a key element of the programme of many other local authority venues similar to Watersmeet. The venue will be most attractive to hirers who can bring in their own audiences through direct or network marketing. Niche markets such as Indian-language drama have proved successful and lucrative at Watersmeet, as they do not rely on promotion through a venue brochure.

Hire agreements will reserve the right to refuse unacceptable hires, which might bring the Council into disrepute. The Premises Licence already prohibits the use of the venue for ‘adult entertainment’.

Dance & Theatre Schools

As above, the potential for growth makes this a key target market, which could extend to groups such as commercial youth theatre schools.

c) Other markets

Corporate Hire

Despite considerable effort, corporate hire has only ever been an occasional source of income to the venue, due to daytime parking issues and the quality of its facilities. While some work can be done to explore this area again, it is not proposed as a priority target market.

Private Hire

An empty bar and catering operation may provide private hirers with more flexibility than was available in the past. In the interests of security, adult birthday party hire will be restricted to 25-year olds and over only. There are already enquiries for Asian wedding hire, despite the closure of the venue.