Tauranga City Council: Changes to Bay Venues' business model to ensure sustainability

Tauranga City Council commission chairwoman Anne Tolley. Photo / File

Tauranga City Council commissioners have adopted a range of recommended changes to Bay Venues' business model.

A statement from the council said the changes were designed to ensure Bay Venues Limited's facility management activities were sustainable, community and commercially focused, and would continue to deliver significant benefits for the city.

Bay Venues is a Council-controlled organisation (a company owned by the council) which operates a number of facilities and activities on the Council's behalf.

These range from non-council funded, commercially viable activities and facilities (such as Mount Hotpools and Trustpower Baypark), to council-funded, community wellbeing-focused assets such as halls, community centres, indoor sports facilities and swimming pools.

At today's council meeting, the commission received a strategic review of the company's ownership and business model, produced by McGredy Winder last year, together with a supporting options analysis and benchmarking report.

Commission chairwoman Anne Tolley said the review identified a number of issues which needed to be addressed.

The issues included a complex operating and financial structure increasing operating costs as facilities age and usage approaches capacity, balancing of commercial objectives and community outcomes, and constraints on new investment.

"In summary, the review indicates that Bay Venues' current business model, with the current level of council contribution, is not sustainable," she said.

"However, benchmarked against other comparable council sport and recreation facility networks, its clear Bay Venues is providing reasonable value and that gives us an opportunity to make some relatively minor changes which will enhance both the company's operational and financial performance and the overall level of service delivery to the community."

Key changes will include:
• Restructuring and simplifying the organisation's financing and funding model and providing additional rates-funding to cover the real cost of non-commercial activities.
• Developing a clearer statement of intent and performance indicators focused on delivering desired community outcomes.
• Development of a more integrated governance model.
• Funding the organisation so that it can move towards paying the Living Wage for all staff.

Tolley said the current board of directors had done a good job in strengthening Bay Venues' commercial performance and it was now timely to broaden the focus on delivering non-commercial services and activities contributing to community wellbeing.

"With four members of the current board due to retire at the end of June, we will be seeking expressions of interest from appropriately qualified and experienced people to form a new Board from 1 July 2021 and would welcome applications from the existing board."

Other focuses for the new board, working in close collaboration with council staff, will be to reposition Bay Venues as an integral part of the council's operations, investigate the viability of moving community halls and community centres back under direct council management, and look for opportunities to improve performance through shared service delivery models with the council.