Wellington Scoop
Network

Merging and saving $500,000 – but how?

by Lindsay Shelton
The Wellington City Council is talking about saving $500,000 from merging two council-controlled organisations and bringing two other council companies in-house. But the mayor says no jobs will be lost – and that’s hard to understand. $500,000 won’t be saved only by dismissing three boards of trustees.

The plan, announced by the council on Saturday, will merge Positively Wellington Tourism and Positively Wellington Venues. Each of them has a highly-paid chief executive. But the single merged entity will only need one boss. Is this a clue to how some of the money will be saved?

Glenys Coughlan is being paid $260,000 a year as chief executive at Positively Wellington Venues – more than twice as much as the council was paying when the same work was being done in-house by a council business unit.

Her salary can be found in her organisation’s annual report. It’s more difficult to discover the salary of David Perks, chief executive of Positively Wellington Tourism. Its annual report shows only that it spent a total of $385,000 on “key management – personnel includes the chief executive and senior management.” So you have to guess that he’s paid a similar amount to Ms Coughlan.

If one of the chief executives departs, that could result in half the savings that the council is expecting. Plus a further saving on one set of support staff. Not forgetting duplicated websites, and offices.

Each of the two separate organisations currently spends about $90,000 paying board members. When one board departs, that’ll be a further saving, but still not enough to reach the $500,000 that has been signalled by the mayor.

Here’s what Mayor Wade-Brown said on Saturday when the merger plan was announced:

A merger of Tourism and Venues would lead to a stronger approach to marketing Wellington as an international and national destination for business, culture, events and the environment, leveraging off their respective skills. PWV manages a number of Council-owned venues including the Town Hall and Michael Fowler Centre, the TSB Arena, Shed 6, the St James Theatre and the Opera House. PWT markets the city and region nationally and internationally. It also runs the city’s iSite visitor information centre, Business Events Wellington and contributes to the City’s Destination Wellington business attraction initiative. The two organisations work closely together now, and bringing them together can enable greater resources to be focused on delivering better results for the city.

The mayor was not happy when the DomPost wrote a headline about job losses resulting from the merger. On Twitter, she said:

Slimming CCOs [is] about fewer directors not job losses – article fine – headline on other planet http://www.stuff.co.nz/s/TTaj http://i.stuff.co.nz/dominion-post/news/9488208/Jobs-on-line-as-council-looks-to-raise-efficiency …

So there are still questions to be answered, but in the words of the mayor: “It is too early to discuss details of the new organisation.” She may not want to discuss the details, but there’s no doubt that they’ve already been talked about, behind closed doors. And on Saturday she offered an enticing clue about the future merger:

The merger would strengthen the ability of the city and region to enter into local and international partnerships and encourage investment. It would also align more effectively with the Council’s own internal reorganisation, earlier this year, of its economic, events, arts and international units.

As well as the merger, the council intends (at last) to abolish Wellington Waterfront Ltd and to bring its work in-house. It’s planning to do the same with Wellington Cable Car Ltd. These changes will also help save some of the $500,000. Two boards of trustees will be abolished. But also two more chief executives will be left without any organisations to run. If no jobs are to be lost, will they be asked to accept lower-paying positions?

This will be the council’s fourth attempt to abolish Wellington Waterfront Ltd. This time, it seems success is more likely. Even the Employers’ Chamber of Commerce agrees. After being briefed before the announcement was made, the Chamber says the move “makes sense.” And also: “There never seemed to be a good reason” why it was out there on its own. The Chamber is also supporting the merger. “Bold but sensible,” it says. From an organisation that has forever been criticising the council, this is praise indeed.

6 comments:

  1. Neil, 10. December 2013, 19:30

    Gee a quarter of a mil to delegate the organisation of a few venues? Sounds more like a 110k job to me. What qualifications do you need?

     
  2. Traveller, 10. December 2013, 20:39

    Is the council really trying to become business-like? Not if it’s going to retain four chief executives when only one is needed. Not if it wants to merge two organisations without reducing staff numbers.

     
  3. Alana, 11. December 2013, 22:58

    Why merge CCOs? Why not bring them back into council management by people who know how to run city assets well – like the management to the Botanic Garden? The directors failed to “add value” and instead seem to have run them for the benefit of corporate interests, not rate payers and residents.

     
  4. Polly, 12. December 2013, 8:34

    I agree, as I am not sure where the savings are coming from. The CEO of WWLtd is moving his “skills” back into the council. But in the report on Page 57 it says that the limited liability companies of WCCL and WWLtd will remain in existence as the assets of the companies would remain within the company structures and this necessitates the appointment of Directors to these companies for administrative and compliance matters. It is recommended that the Chief Executive be delegated the authority to make the appointments. Along with PWTourism and PWVenues, one has to question what savings will be made.

     
  5. CC, 12. December 2013, 14:29

    Simple Polly, the Council are saving the sinecures of the trough feeders. All this at a time when there is a hue and cry over paying the hard workers on the bottom of the food chain a pittance more, so they have a living wage.

     
  6. Rosamund, 13. December 2013, 10:30

    There has never been a merger that has “saved” money, as many articles in academic journals and even the “Economist” attest.

    Will we be asked, via the Annual Plan consultation process, about the new “delegations” given to the CEO?