REBUILDING THE SPORT – SUMMARY

Dear Members

REBUILDING THE SPORT – SUMMARY

 As we approach the final  week of Member Clubs considering  the motion put by the SKC at the recent AGM, I write to provide any further clarity required so that our People can make  a fully informed decision, and accordingly instruct their Club Committees.

As discussed at the SKC, our Members have told us they want to help the Board rebuild this fine sport. They want affordability, good racing, a more liberal approach to rules and competition, but more importantly – an improved culture to permeate the Sport.

Over the past fortnight, I have had occasion to talk to many people, indeed the entire Board has been fielding enquiries from people within the Club rank and file, and other stakeholders. We have made ourselves available at any time to talk with you all, and it fills me with a great trust in the People who really want the Sport to be the best that it can be by asking all the right questions so as to be properly informed. This is what the process was always meant to be – a transparent and objective way to give the Karting community within NSW a real voice and for people to shape their own future. Our assessment is that there is indeed a bright future to be had, one that is not without hard work, a required patience and needing a collaborative effort, but a bright one no less.

I again reiterate that the Board is solely focused on what our Members and the  grassroots Karter desires, and that is to be able to race their equipment economically and to have fun doing so. We want to rebuild and improve the culture so that it has real community spirit, one which is inclusive, fair and embraces all of the needs of the Karter, their Families and Friends and indeed the whole Sport, including industry.

EXTERNAL ENVIRONMENT

The average Karter is not interested in politics. Nor frankly is the Board of KNSW. We acknowledge that KA and recently CAMS have made public statements arbitrarily responding to what KNSW has been asked to do by its Members. We appreciate that both have publicly declared their positions and alignment, but we choose not to respond nor propagate public politics. Neither KA’s nor CAMS’ public statements have any material effect on NSW running independently.

We have faith in our People to make their own interpretations and we will merely respect our Members’ judgements, and leave it at that. We are focused on the Karter in NSW and what is right and proper for them.

THE PLAN

Many have asked us about our ‘business plan’. I divide this into two areas. One aspect covers the normal hygiene factors of administration, finances and the mechanisms to do so. The other is what will technical aspects, rules, policies and regulations be?

FINANCES

Firstly let me address our financial position. We have good cash reserves held in interest bearing accounts that were built up by the hard work of previous administrations which we thank them for. We have a separate operating account which attends to the running and administration of the Sport in NSW. All of this has been reported in our annual financial statements released prior to the AGM. So we are not ‘broke’ as has been suggested by certain quarters. We also have a half share in the Penrith property where a recent valuation suggests the equity held well exceeds the outstanding debt of its purchase. We have performed a cash flow analysis across the year or two ahead, and have done sensitivity analyses by varying member numbers in scenarios of potential vote outcomes.

When the vote comes in the Board will be able to sit and examine the results – and project forward any number of possible scenarios and accordingly be able to come forward to the SKC and Members to show what that is. The Board reiterates it has a fiduciary responsibility under the law to trade solvently. As with any business, we will continue to make appropriate decisions to maintain that solvency, ensure our ability to pay our bills and administrate the Sport for the good of the Membership. We are compelled by governance and law to trade responsibly, and so this is not an arbitrary thing that we do. It does rely on scale and the member numbers, but clearly a unanimous vote whereupon we can count on the mandate of all our Clubs is clearly the best position to be in. In this position of strength, we will be able to commence flowing savings onto Karters and Clubs within the first year. I have already written about licences enjoying an 8.5% reduction in cost in 2019 alone if we get confidence that all Clubs will band together.

Notwithstanding, we will no longer be required to flow significant amounts of money to KA. This instead will be used to pay for our insurance, build a small buffer of working capital, and the balance we will return to Clubs and Karters through discounting licences and permits. We also hold cash reserves to cover the outstanding value of the TDF Loans held by some of our Clubs. We will review Safety Grant obligations separately on behalf of each those Clubs with them.

The formula for financial stability going forward is relatively simple. Divert the funds going to KA to pay for insurance and build a small working buffer, provide value to members by discounting in a sensible way, grow participation numbers by building community, and then continue to return savings to Members based on this improving scale. All businesses have to continually look at their prevailing circumstances, and ‘business plans’ are designed to address a variation of the inputs to that business and until that becomes clear, we have to rely on sound and representative modelling. An individual Club cannot drive this sort of scale on its own, particularly in a climate of falling participation, but all of our Clubs working together can and will deliver wide ranging savings and discounts across time to themselves.

LICENCES & PERMITS

I have written previously about licencing and permits. An independent KNSW will continue to govern and issue both. To the best of my knowledge given recent enquiries to the Department of Sport and Recreation, and despite some representations made to the contrary, KNSW remains the SSO for the Sport within NSW and the only body within NSW to have the right under Legislation to issue permits. I am informed no other body currently has that authority. Policy and Legislation is subject to constant review by Government, but the road to changing legislation is usually a lengthy one, and we will continue to work closely and talk with our government representatives. We do not anticipate any changes to these circumstances in the near term.

COMPETITION

We are aware that some of our Members wish to compete or officiate at National events. We would neither prevent this nor seek to put them in a difficult position. We encourage a pathway for folk who want to go on to larger things in the Sport. That’s healthy. We are prepared to sit at the table with any federally constituted karting body or other state associations to discuss licencing cross-over requirements.

The Board of KNSW would be open to discussing a framework and potential arrangement with any federally constituted karting body (including AKA Inc. or AKA Ltd), should they request to run an AKC round or similar within NSW and at any of our Members’ Club circuits.

Nothing is off the table, but we can absolutely assure our NSW members that these possibilities have a complex and perhaps difficult road ahead, and for the KNSW Board – this carries a precondition of open and transparent dealings. However, we want our Members to know the Board of KNSW remains forever open minded to the needs of our People, and we are always ready – and have been over the last 12 months – to sit at the table with any federally constituted karting body and negotiate the new order of the Sport going ahead.

TECHNICAL REGULATIONS

Once the outcome of the vote on the motion is known, and assuming a mandate is achieved, the Board would immediately look to stand up a number of committees with the remit to assess and recommend the changes needed for the following:

You the Karter can be involved! Representatives will be sought from within the Club ranks via an Expression of Interest process, and quickly mobilised  and tasked to develop a draft proposal for tyres, regulations by class / category, Timing System options and Officials functioning.

These Committee outcomes will then be circulated for review and input by all Clubs, and ultimately presented to the Board for approval, again within the weeks that follow. The Board Welfare Directors and various current Officials will be asked to lead these committees in an open and transparent way. The Karter will have a real voice in what all this looks like.

The Board is confident parity can be achieved across classes that will permit a mix of new and old karting equipment. The Board believes we can have a suitable Rule Book for the beginning of the 2019 Race Calendar that will enable older and modern karting equipment to compete in a sensible and interim way and until a new manual can be drafted from scratch.

INDUSTRY

This process would allow the Board of KNSW to then engage Industry. We would work hard to convene a Forum for all potential Suppliers across tyres, technical and timing system categories to come and meet with the Membership of KNSW before the Christmas break, putting the requirements and outcomes of the Committees to them in an open way, while also listening to what the industry at large has to offer by way of product and of their strategies to help rebuild the Sport here in NSW.

All facets of equipment supply would be contestable within the supplier selection framework that we currently have. With tyres – we would go to market based on the Committee’s recommendations and look to shore up an appropriate contract to cover the supply of suitable tyres for the 2019 competition year. The Board believes that this could be done by the beginning of the competition in January. We would then embark on a more thorough process across 2019 to better match tyres to class and category performance and parity needs with an open and transparent testing program, and then go back out to market to secure contracts for 2020 and beyond.

SPIRIT OF COMPETITION

Has the Board done a preliminary survey of some aspects of the market with tyres and timing systems? Yes, we know alternatives and options are available out there, and our firm belief is that at a dollar rate that is more cost effective than is currently the case. However, I emphasise that no decisions have been made in respect any type of product. We want to ask what you want, and then we’ll engage industry to achieve that end. Again the average Karter will be involved.

With engines, the sensible use of restrictors and weight classing can achieve a quick and simple levelling of new and old engines that will open up bigger fields in each class / category and improve the fun factor of competition at the grassroots. The Board needs your full support mandate to move in this direction to rebuild the technicalities, improve parity – make it better for the People in the Sport now and also attract our former friends and competitors back to the sport.

FINAL WORDS

The Board reiterates that should a majority and mandate be achieved, Karting NSW will need to provide the requisite notice to withdraw as a Member of the Australian Karting Association Ltd (trading as Karting Australia) and all NSW Clubs will similarly become disaffiliated. KNSW will still remain a Member of AKA Inc.

I thank the Board of Directors and Office Staff within Karting NSW for their hard work and dedication in recent months, as it has been very hard work for all.

This is a pivotal time for the Sport. It will set the course for many years to come. I encourage all Members to consider whether it’s ‘more of the same’ or ‘time to change and have a go’. Perhaps think beyond yourselves, but for your fellow Karter and the Karting Community across the entire State. You have the Board’s best wishes in your deliberations.

Yours in Karting

Dave Filipetto

Chairman, Karting NSW

17th September 2018