Council 'lacks financial discipline'
The man charged with overseeing Christchurch City Council's finances says the organisation lacks financial discipline and should not be in the events business.
Cr Raf Manji, who chairs the council's finance committee, is concerned the council has been committing money to projects and events without first doing a thorough commercial analysis.
"The problem that I'm observing on a regular basis is a lack of financial discipline everywhere," Manji said.
His comments came as the World Buskers Festival Trust asked the council for more money.
The council bought the festival in 2009 and provides $230,000 in funding support. It proposes cutting that figure by 15 per cent in the next financial year, but the trust that runs the festival wants its funding kept at current levels and a one-off $100,000 grant so that it can put a new management team in place and start moving the festival back into the central city.
At this week's council meeting, Manji asked why the council was considering such a move when it had yet to receive a full financial report on this year's festival.
That festival cost $2.4 million to run and was expected to either break even or record a loss of about $20,000. "I just don't see how a street theatre festival can be costing $2.4 million a year to run," Manji said. "That sounds like an exceptional sum of money for buskers who generally stand outside and play music or do tricks."
Council marketing and events manager Richard Stokes said before the quakes the festival had cost about $900,000 to stage but the costs had ballooned in recent years because of the expenses involved in setting up temporary infrastructure in North Hagley Park.
Stokes said while the festival might post a small loss this year, it typically returned a small surplus and was the strongest performing festival in terms of sponsorship.
He told councillors if the trust did not get the money it was seeking soon, it could put next year's festival in a precarious situation.
Manji said he could not make a decision without first seeing the financial report from this year's festival and suggested a decision should be deferred until the April 8 meeting of his finance committee.
"I don't think we should be in the events business at all," he said. "We don't make any money out of it. I don't have a problem providing grants to festivals but I've certainly got a problem with this."
Mayor Lianne Dalziel said the problem lay with the council being asked to make a substantial financial decision without having all the facts in front of it.
"We all know the satisfaction survey shows that this [festival] is something that people love to be involved in on every level, but we have to be fiscally responsible at the same time," she said.
In addition to owning the World Buskers Festival, the council owns the Ellerslie International Flower Show, which last year ran at a $325,000 loss.
The council is mid-way through a review of this year's event, the outcome of which is likely to determine whether it holds on to the show or sells it.
FESTIVAL SPENDING SET TO TOP $9.5M
The city council is proposing to spend more than $9.5 million on festivals and events in the coming financial year.
It owns but contracts out the management of the Ellerslie International Flower Show, which it bought in 2007 for $3m. The first two shows recorded a surplus but the last couple ran at a loss.
Two years after buying Ellerslie, the council bought the World Buskers Festival for an undisclosed sum amid concern it could leave Christchurch. It is regarded as Christchurch's most popular festival and normally returns a small surplus, although it may end up in the red this year.
The council also organises IceFest, a biennial celebration of the country's Antarctica links.
The first IceFest, held in 2012, cost about $2m to run but some of that funding was provided by the Government through its Major Events Development Fund. The next IceFest is due to be held later this year.
The other major festivals the council organises are New Zealand Cup and Show Week and SummerTimes.