Wyndham council has formally approved the contract for its subsidiary leisure services company, despite five councillors raising their concerns.
At Monday night’s meeting, councillors Gautam Gupta, Heather Marcus and Intaj Khan voiced concerns about a council projection that Western Leisure Services (WLS) will not turn a profit until at least year three or four of operation.
They also repeatedly questioned why the WLS business plan could not be made public.
The council established WLS last year to manage Wyndham’s three major leisure centres – AquaPulse (excluding the adjoining Encore Events Centre), Eagle Stadium and Werribee Outdoor Pool leisure facilities.
A report tabled on Monday revealed that annual operating losses were expected for the first two to three years, with a surplus expected from years three to four onwards.
The council has already budgeted $1.33 million to cover the expected operating loss for the 2015-16 financial year. This would be in addition to $2.9 million in start-up costs previously reported by Star Weekly.
Councillors Gupta, Marcus and Khan all voted against the management services agreement, while councillors Glenn Goodfellow and Marie Brittan voted in favour of the contract despite raising concerns about WLS.
Councillors Gupta and Marcus were both unhappy that the council will fund any operating shortfalls until WLS turns a profit. They recommended that council make the WLS business plan public for transparency purposes.
“To me, there’s too much fat; it doesn’t add up and I have grave concerns,” Cr Marcus said.
Cr Khan said there was no guarantee that WLS would turn a profit.
Cr Goodfellow admitted there were some aspects of the agreement that did concern him, including the initial projected operating losses, but he said that overall it was worth supporting.
“Am I concerned about the amount? I’d be lying if I said I wasn’t,” he said. “There are concerns, but I’m heartened by the fact that this entity has to report back to this council every three months.”
Cr Marie Brittan also backed the WLS but said she dreaded the thought that the council, having built and renovated state-of-the-art facilities, would have no say in how they were run.
Meanwhile, Cr Bob Fairclough said he was convinced WLS was in good hands.
“We’re already starting to see some positive outcomes,” he said. “We’ve exceeded the target of learn-to-swim memberships. General memberships are also increasing at a rapid rate.”
