The Bay Pavilions losses get worse
By Phil Herrick
The financial losses at the new Bay Pavilions Arts and Aquatic Centre are getting worse according to the latest report that will be tabled at the Eurobodalla Shire Council’s monthly meeting next Tuesday.
On current trends this one facility in Batemans Bay will consume 10% of the General Rates raised in the year. General Rates are used to fund essential community infrastructure like roads, footpaths, parks, halls, pools, libraries and a myriad of other services across the shire.
A number of identified community needs worth $2.6 million have already been chopped from this year’s budget as council struggles to deal with the situation. If the financial state at the Pavilions worsens, further cuts may be needed or rates increased to cover the shortfall – both risky moves in an election year.
The council hopes to see revenues of $3.95 million for the full year to June 30 at the Pavilions. For the first half year $1.7 million was received, $308,000 below what would be expected. If that trend continues, the revenue shortfall for the year will be over $600,000.
At the same time council staff expenses have blown out to $89,750 for the first six months. If the trend also continues it will see staff expenses 50% over budget by year’s end.
Council is already budgeting an operating loss at the Pavilions of $5.1 million for the full year.
That includes depreciation of $2.5 million. The budgeted cash loss is $2.6 million. The cash losses will be paid by General Fund ratepayers.
If the shortfall reaches the $600,000 indicated by current trends, the cash loss will surge to $3.2 million for the year – 10% of the $32 million General Fund income projected in council’s Operating Plan.
Last year council received advice from consultants on how to stem the losses. Steps included renegotiating the contract with the Pavilions operator, improved marketing and finding other business partners to locate at the Pavilions to generate revenues.
Consultants told council last October an acceptable operating loss level should be determined for this community facility. Losses over this number would be unacceptable and be the target for savings and new revenues.
In other words, council was advised to clearly define a target, implement a strong business plan to achieve it and move the Bay Pavilions onto a sustainable footing.
To date, council has not provided the community with an acceptable loss figure or business plan, telling the Moruya Mail last year the cost to operate the Bay Pavilions is part of the wider budget and they will reduce costs where possible.