Tauranga City Council's Bay Venues survives after 'damning' review - critic says good compromise reaches

Tauranga City Council commission chairwoman Anne Tolley says there a key things to consider in the reshaping of Bay Venues. Photo / File

Bay Venues will stay in business despite its model being found unsustainable and lacking strategic direction by independent reviewers in what one critic called a "damning" report.

The fate of Tauranga City Council's largest council-controlled operation was decided by the council's commission yesterday, as it considered options that included bringing its operations back in-house and selling off its commercially viable parts.

Bay Venues was established in 2013 to operate 24 facilities and activities on the council's behalf such as the non-council funded Mount Hotpools and Trustpower Baypark, and council-funded halls, community centres, indoor sporting facilities and swimming pools.

It employs 325 people and is expected to receive close to $10 million in ratepayer funding in the 2020-21 financial year.

A series of reviews, including one by consultancy McGredy Winder last year that has recently been made public, found the organisation lacked strategic direction and was not sustainable.

During the public forum at yesterday's meeting, business owner Keegan Miller told commissioners the McGredy Winder report was "damning".

He backed disestablishing the organisation, claiming it was "blindingly obvious Bay Venues had failed".

Miller said he had a vested interest due to his business operating in the same audiovisual circles as Bay Venues but felt the issue was larger than his alone.

Mount Maunganui Beachside Holiday Park is one of the facilities run by Bay Venues. Photo / File

He was joined by several others in the public gallery who shared his concern.

"The entire Bay Venues network ... actively use predatory pricing and offering discounts that means the private sector cannot compete," Miller claimed.

"Along with funding the community network of pools and leisure centres, the ratepayer is also funding an audiovisual centre. In other words, these commercial ratepayers behind me that have joined me today are funding their competition."

Commission chairwoman Anne Tolley acknowledged Miller's concerns, saying Bay Venues had not been transparent enough regarding its debt and subsidies from the council. This was an element that needed attention in the future reshaping of the organisation, she said.

Commissioner Stephen Selwood said the lack of strategic direction highlighted in the report was a clear problem that predated the commission.

He was reluctant, however, to see the council swallow Bay Venues as a remedy, as the reviewers recommended.

"There's a danger that if we bring this service into council, it gets lost in the melee of other services and activities the council provides and a lack of transparency is a result of that."

The commissioners voted to keep Bay Venues as a separate organisation and to have it operate with what council staff called an "enhanced status quo" in their recommendation. It would include clear performance indicators.

They also agreed to have a report done by September that would include "investigation and options regarding avoidance of competition within the private sector by Bay Venues Limited", among other points.

The "required additional rates" funding for ongoing sustainability of Bay Venues would be confirmed by council staff after a review of council funding. It would also "reorganise BVL's finance structure and funding model to be more transparent, simple and easy to understand".

Miller said after the meeting the commissioners' decision was a "good compromise".

"It seems like everything I've said has been heard. We do have acknowledgement there is an issue and it's being looked into further. That's a positive.

"It keeps people employed but it also allows council to look at moving it forward."

Four members of the Bay Venues' board are due to retire in June so the council will be seeking expressions of interest to form a new board from July 1.

The board will be expected 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 council.

Other key changes to the model included restructuring Bay Venues' financial and funding model; developing a clearer statement of intent; developing a more integrated governance model and funding the organisation so it can move towards paying the living wage for all staff.

Bay Venues was excluded from a council decision in 2018 to pay its staff a living wage at minimum.

Asked for comment on the decision, Bay Venues chief executive Justine Brennan reiterated comments provided to NZME by the board last week supporting the recommendation of council staff and looking forward to "the opportunity to work with council to enhance the ... model".