Mayor uneasy about Great South funding request
“In my view, we should just give them what we gave them last year and no more.”
An Invercargill City Council debate over Great South’s funding levels has played out in public despite council staff expressing unease about it.
And when the discussion was opened up Mayor Nobby Clark then went about expressing his own unease that Great South was asking for more money.
Great South - Southland’s regional development agency - has advised the council its “core costs” will increase for 2024-2025.
As a result, additional funding has been sought from the Invercargill council, which is a 48% shareholder in Great South.
Great South’s core costs are expected to increase from $1.77m in 2023/2024 to $1.981m in 2024/2025.
Under the current formula, the Invercargill council’s share of that core cost would increase from $912k to $1.02m - an increase of $108k.
On top of that the Invercargill council currently provides $775,000 for “contract funding” to Great South.
That money is in place to carry out work in areas such as economic development, business development, tourism development, and events development.
It was proposed that the council’s contribution rises from $775,000 to $920,000.
The matter was set down to be discussed in a public excluded part of Tuesday’s full council meeting. That was before councillors voted in favour of bringing the matter in front of the public.
Following the meeting, Invercargill City Council chief executive Michael Day released a statement to The Tribune reiterating that council staff had advised councillors that the report be received in the public excluded session.
“The reasons given were regarding commercial sensitivities around previous investments, and to protect the privacy of staff members at Great South.
“Our relationship with Great South and its other shareholders is valued and we recognise the importance of all shareholders working closely together to support Great South to succeed in the important work they do for our city and region,” Day said.
He said the report was a formal and legal process and Great South’s Statement of Intent and Letter of Expectation is complex. It included sensitivity around financial details, personnel, and alignment with the interests and funding of other shareholders.
Deputy Mayor Tom Campbell moved the motion asking that the matter be discussed in public on the basis he did not believe there was anything of a commercial nature that should halt it.
Mayor Nobby Clark said the public did not know what goes on at Great South and he felt the more transparency in place the better.
“If we really want to be transparent, we should err on the side of being transparent.”
When the discussion was finally opened up Clark indicated he was not comfortable with a funding increase.
He said the Invercargill council itself has had to cut back on services to keep rates down.
“It doesn’t sit well with me that Great South is asking for a nearly 12% increase, given today’s economic environment.”
He then went on to list various tasks Great South had done and he questioned if some of those provided value.
“They have probably been funded for 10-15 years to do work on housing, for argument sakes, and from where I sit we have got no housing outcomes. All they do is collect data and do reports for us.”
“In my view, we should just give them what we gave them last year and no more.”
Day pointed out that if you look at Great South’s annual reports and statement of intents in recent years there was a funding aspect in relation to Space Ops, to the tune of close to $500k.
Day said that $500k has contributed to Great South’s ability to fund certain projects and offset certain staffing costs.
However, there is a strategy to maintain that investment through Space Ops and that funding gap equates to a good portion of the close to 12% increase being asked for.
“I wanted to highlight that to give perspective in relation to the financial position you see before you.”
It has also been estimated $220,000 a year is needed for Great South’s Beyond 2025 work. If the Invercargill council funded its share that would be an additional $110,000.
Great South also estimates $150,000 a year is needed for work around a regional data centre, which the council’s share would be $75,000.
When it was put to the vote it was agreed to increase both the core funding and contracting funding as requested but the council did not commit to the outlined Beyond 2025 funding laid out.
It meant the council has agreed to increase its overall funding of Great South by close to $260,000.
We were not happy about the oat milk (?) Factory being moved north.but here we are a few weeks later throwing more cash in their direction.never mind .it can all be covered by a rates increase.am I the only one who finds this odd.
These organisations become a black hole when it comes to funding mainly because no one understands how to make the funding accountable. There are many ways to put in outcome targets that get reported against and if any one target isn't being met look at why. The council hasn't even asked to see as part of the funding a city I Site. Gore has one and drove through Balclutha this week and their one stares you in the eye from the new building on the main street. That should be a core function of the local RTO.
The council should also state as a policy what percentage of the funding can be spent on wages and salaries.
The biggest drawcard to bringing visitors into Invercargill over the last few years has undoubtably been the Transport Musuem. Prior to that it was E Hayes. Our visitor strategy should start there and work out rather than try and reinvent anything new