Surf lifesaving: Life savers 'in tough times'

Sources say a SLSNZ restructure has been a costly mistake. Photo / Alan Gibson

Surf Life Saving New Zealand - a non-profit body known as one of the country's most financially robust - is facing accusations that a landmark restructuring has been a costly failure; causing financial difficulties.

Project Groundswell started two-and-a-half years ago to coincide with surf lifesaving's centenary; building a structure to support the organisation long into its next century. It was touted as saving up to $1 million a year in efficiencies and administration.

Instead there are tales emerging that the restructuring has been enormously, and perhaps even unsustainably, expensive. There are reports that SLSNZ, previously a financially healthy body, has had to eat into its reserves by $1m or even $2m to pay for Project Groundswell and its aftermath. "They have lost our reserves," said one surf insider. "One big unexpected bill and we [SLSNZ] could technically be insolvent."

SLSNZ Board chairman Graeme Cullen, when asked if the organisation faced insolvency, said: "We are in very tough times. The board is acutely aware of that and is working on it."

Asked if SLSNZ had any reserves left, he said: "That is one of those difficult questions to answer. We have made a call on our reserves, but we have invested longer-term as well and we are in a position where we can free those investments up."

According to its website, SLSNZ's income is $6m a year derived from sponsorship, gaming machine grants and The New Zealand Lottery Grants Board.

The organisation's total annual income is approximately $13m.

SLSNZ does not charge a national membership levy, instead providing programmes and distributing over $2m each year to clubs.

There is no suggestion that key services, like lifeguards on beaches, are in danger because of the strong volunteer component in surf clubs which make up the SLSNZ. But surf lifesaving sources are worried about the sustainability of the current structure, the financial health of a previously robust organisation and transparency around the answer to questions like: how much has been lost and what happens now?

"What they've done is tried to centralise but all that's happened is that they have ended up building a vast bureaucracy for themselves," said another surf life saving source. "It's a mess. A hell of a lot of people in surf were against this change and now everyone is thinking: 'I'd hate to think what Project Groundswell cost'. Everyone thinks there is a lot we are not being told and that they are glossing over things."

Project Groundswell took SLSNZ's 72 clubs in nine regions down to just four regions which have a much more direct reporting line to the national body. However, several sources pointed to a burgeoning increase in staff, as a result of the restructuring, which has helped blow the budgets.

Two CEOs have left SLSNZ during Project Groundswell's implementation - first Geoff Barry in 2009 and then, just last week, former board member turned CEO, Grant Florence.

"That's what we don't understand," said one source from inside SLSNZ. "The system we had wasn't broken - so why did they feel they had to fix it?"

There is no suggestion either CEO departed because of Project Groundswell but, in a memo without signature circulated on Tuesday, the board of SLSNZ said an interim CEO was to be appointed by the end of the week.

The memo also said: "The Board are satisfied following independent verification of the organisation's financial position that whilst cashflow is tight in the short term, the organisation remains stable and there is a healthy budget surplus forecast for the 2011-12 year. In planning for next year, and after listening to our membership we can confirm there will be no reduction in programmes and services planned for the upcoming year."

"You can read between the lines there," said one surf source. "They are trying to tell us everything is all right but the only way you can read that memo is that they are trying to get a rescue package together."

It is also understood that a consultant has been appointed to help address matters. '

Cullen said: "Plainly we have had some bad financial news. Our financial year ends this month so there is still some uncertainty as to what the position will be.

"The question whether or not it was Project Groundswell that is at the heart of the matter or whether it is a separate consideration - we have had some communication issues in the organisation in the last few months and the Board has acted to improve that."

After making the above comments to the Herald on Sunday verbally, Cullen also responded with a statement by email saying: "There was always going to be a settling in period [for Groundswell] and we were always very clear that we believed it would be up to three years from full implementation before we could see financial benefits come to fruition.

"...the full implementation of Groundswell combined with our centenary year meant the organisation was always going to be stretched with high workloads. This combined with the recession and Christchurch earthquakes has seen a need to release cash reserves which isn't unusual."