Accountable but unelected. The financial crisis at the council’s venues company

Wellington.Scoop
When the CEO of Positively Wellington Venues, Glenys Coughlan, appeared before the city council’s performance subcommittee on Monday, she had the chance to tell councillors about the deteriorating finances of the organisation that she is running. Yet she did not.

Instead, although it was “not a criticism” of Council, she talked about a
“loss of bookings because of the uncertainty around Town Hall”. Yet four days earlier she had told her Board in an email that her organisation faced a loss of $240,000, and her chief financial officer had resigned. The DomPost published the email yesterday.

Aside from the question of the professionalism of using an email to inform her board of the expected loss, Coughlan had not, apparently, called an emergency board meeting when she learnt about the pending loss and the resignation. Nor had she alerted the Council CEO or Mayor Celia Wade-Brown.

Instead, she fronted the subcommittee on Monday with slides and numbers which apparently did not reflect the emergency faced by PWV. An emergehcy which four days earlier she had described in her email as “a significant deterioration in our performance,” so serious that she had offered her resignation.

The subcommittee which met on Monday is charged with monitoring the performance of the eight Council Controlled Organisations which have been established by the City Council. It’s also the platform for the Council to review the Quarterly Reports which it requires from the CEOs of those organisations. The committee is chaired by Alan Isaac, a non-elected member. The other members are the Mayor, and Councillors Jo Coughlan, Simon Marsh and Iona Pannett.

They would have expected to be told about any financial problem. But no. And they weren’t told about the resignation of the chief financial officer. So much for their ability to be an effective monitor.

The need for council controlled organisations has always been debated. There are considerable costs: board fees, salaries for chief executives and staff, rents and so on. The fact that decisions are made by unelected boards has often been questioned. And as for accountability: though the city council has a subcommittee to supervise the performance of the CCOs – reviewing quarterly reports, annual reports, business plans, strategic plans and statements of corporate intent – we’ve learnt this week that the oversight doesn’t always work.

Last year the mayor of Porirua Nick Leggett said that Wellington councillors had concerns about the transparency of council-controlled organisations and their limited ability to control them effectively. Wellington’s councillors, however, seldom tell us what they’re thinking about such issues. We do know, however, that they’ve made three attempts to abolish the council’s waterfront company and to bring back control of the waterfront into the council. But each attempt has failed, though the responsibilities of the company (see below) hardly seem to justify continuing its existence.

As for the expensive and loss-making activities of Positively Wellington Venues, when it says that it provides live entertainment and performing arts experiences it seems to be deluding itself that it’s an entrepreneurial entertainment organisation, rather than the entity which organises the council-owned halls and theatres.

It’s time for another debate about the financial desirability of bringing most of these assets back into direct city council management.
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Basin Reserve Trust
Manages, develops and promotes the Basin Reserve for recreation, leisure and cricket games,
preserves the heritage value of the Basin Reserve and its assets,
organises fundraising to help promote and further develop the Basin Reserve
It was set up as a Council Controlled Organisation in 2002, then as a trust in 2005

Capacity
Manages all Wellington and Hutt City Council drainage and water services.
Provides water services to customers in Wellington and Hutt City
maintains the water, wastewater and stormwater infrastructure for the two Councils
is jointly owned by Wellington and Hutt City councils
was established in April 2004

Positively Wellington Tourism
Markets Wellington as New Zealand’s ultimate urban destination.
promotes Wellington as a domestic and international visitor destination
markets Wellington as a convention and conference destination
provides visitor information services
supports retail growth initiatives
facilitates new tourism and event products and services

Positively Wellington Venues
Manages Wellington’s premiere events and performance venues “where grow business meets show business”, including the Michael Fowler Centre, Town Hall, St James Theatre, Opera House and TSB Events Centre.
provides live entertainment and performing arts experiences
hosts special government, education, business and industry occasions
supports business and industry networking and development opportunities through conferences and exhibitions
provides facilities for regional, national and international sports teams to compete
enables civic and community performances and celebrations

Wellington Cable Car Ltd
Maintains the cable cars and associated facilities, to NZ Transport Agency standards
manages the contract for operation of the Cable Car
manages contracts for maintenance of the trolley bus overhead wires
ensures the trolley bus wire system is in good, safe, working order
The company was formed after 1991 legislation stopped local authorities running passenger transport services.

Wellington Museums Trust
Provides seven educational and cultural facilities: Capital E, the Museum of Wellington City and Sea, the City Gallery, Colonial Cottage Museum, the Cable Car Museum, Carter Observatory, and the New Zealand Cricket Museum. The Trust:
manages Trust facilities
acquires museum collections
sets up exhibition programmes and educational policies for Trust facilities
ensures Trust facilities compliment those provided by Te Papa, the Museum of NZ
cooperates with related facilities in the Wellington region

Wellington Regional Stadium Trust
Owns, operates and maintains the Westpac Stadium. This Trust is not a Council Controlled Organisation, but is a charitable trust jointly settled by Wellington City Council and Greater Wellington Regional Council. The Trust:
operates and manages the Westpac Stadium
originally established by Greater Wellington and this Council to develop and build the Westpac Stadium
provides high quality facilities for use by rugby, cricket and other sports, musical, cultural and sponsored events
administers the stadium and Trust assets
is a charitable trust and is not a Council Controlled Organisation

Wellington Waterfront Ltd
Implements the Waterfront Development Project, manages daily activity on the waterfront, and runs Chaffers Marina.
manages the day-to-day operations of the waterfront, including property management, cleaning, security and general maintenance
promotes and restores heritage buildings
supports commercial development
manages the Queens Wharf Events Centre and stages public events and conferences
provides information about waterfront development to the public

Wellington Zoo Trust
Manages the Zoo, runs an education centre to educate the community on zoology and conservation, and supports conservation initiatives.
Established as a charitable trust in 2003

The death of democracy? Or democratically controlled?

 

6 comments:

  1. Michael Gibson, 12. April 2013, 17:08

    I think that an explanation is also required about the relationship (past & present) of Jo Coughlan (who is on the relevant Council Committee) & Glenys Coughlan who reports to the Committee (or, seemingly, doesn’t report to the Committee when the fancy takes her).
    I plan to ask the Committee Chairman, Alan Isaac, about this & will report when he answers,

     
  2. Hel, 12. April 2013, 21:26

    Most of those organisations do a great job and it is unfortunate that the actions of these Venues people undermine the other entities. Oversight is always difficult when information is withheld whether it is a cco or under council in-house management. Was it not just last week that there were reports of councillors not knowing what was happening under their very noses under direct council management.

     
  3. Elaine Hampton, 12. April 2013, 22:27

    Where are the explicit reporting lines, working protocols, audit oversight, and professional accountability ?
    What is the relationship between the Coughlans?
    Can the committee read a balence sheet?
    Looks like an excellent time to bring this back under Council control

     
  4. Michael Gibson, 22. April 2013, 17:36

    Alan Isaac still to answer! This might mean that the Coughlans are totally unrelated!!!

     
  5. lindsay, 5. May 2013, 18:29

    Any answer from Alan Isaac?

     
  6. Michael Gibson, 6. May 2013, 12:12

    Alan Isaac has failed to reply in any way – not even an acknowledgment of my query.
    I wonder why he is keeping so quiet?

     

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