Wyndham councillors are divided over the $2.9 million start-up costs to be given to the company the council established to manage Wyndham’s three major leisure centres.
Western Leisure Services (WLS), formed by the council in April last year, expects to run at a loss potentially until its sixth year of operation.
In a report presented to councillors last week, it was revealed the company, which will administer the redeveloped Wyndham Leisure and Events Centre and Werribee Sports and Fitness Centre, along with the Werribee Olympic Outdoor Pool, will require ongoing council funding until it establishes a positive cashflow.
As part of the formation of Western Leisure Services, the council purchased 500,000 $1 shares to enable initial costs to be met and has now approved a further $1.4 million in funding to cover the period from December last year to March this year – a decision that divided councillors.
According to the report, this funding will pay for development of policies and procedures, creation of occupational health and safety and risk mitigation systems, recruitment of operational staff to work in the centres, marketing and promotions, and IT equipment and maintenance.
Councillors were told WLS would require further start-up funds for April to June this year to provide for marketing, pre-opening membership sales, frontline staff and training.
Chaffey ward councillor Gautam Gupta criticised the allocation of more funding to WLS.
“We’re providing ongoing funding to something that’s going to continue to operate at a loss,” he said. “Where’s it going to stop?”
But his fellow Chaffey ward councillor, Michele Wharrie, said it was the best model to manage the three facilities.
“No matter what the model, we were always going to have to train staff, purchase equipment and get these centres up and running,” she said.
Council chief executive officer Kerry Thompson defended the council’s decision to form WLS last year.
“Under any new management model, council would be facing start-up costs,” she said.
“Western Leisure Services have advised council of the expected costs for the period April to June, 2015, which is the period when 200 staff will be hired, ready to open the centres in mid-2015.
“Officers are assessing these costs now and they are expected to be approximately $900,000.”
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