Directors appointed to the board of Tauranga City Council's new merged trading organisation will be paid up to $32,000 a year in directors' fees, with the chairman earning $50,000 to $60,000.
Councillors yesterday backed the new fees payable to the five to seven directors who will control the destiny of the council's merged aquatics and Baypark operations.
It means an extra $159,000 will need to be found to fund the higher level of payments to directors, including $25,000 to the independent chairman of the small council holding company.
Total fees currently paid to the five independent directors of Tauranga City Venues and Tauranga City Aquatics (TCAL) was $76,000 a year. However this was artificially low because TCAL only had one independent director left on its board. The other three were councillors who received no fees.
If the number of independent directors on TCAL was boosted back to where it used to be, the difference between the status quo and the new merged organisation would be an increase of about $119,000 a year.
The merger takes place on July 1 next year, with the directors' fees paid from rates and revenue.
The increase was opposed by Councillor Murray Guy who failed to win any support to not increase the size of the fees.
Councillor David Stewart argued that the council had to get the best people it could. "There is a lot of money to be made with the right people."
Councillor Bill Faulkner called for the removal of the public service sentiment. "They are businesses and need to be run as such."
Councillor Rick Curach said the businesses were already going concerns and he was not sure what additional changes would be introduced by the new board. "I would prefer lower fees. The remuneration of the chair is quite extreme."
The council's interim chief executive Leigh Auton said the amalgamated organisation was aiming to achieve annual savings of $1.8 million within the first three years.
The council also agreed to a one-off payment from rates of $225,000 to fund the merger, including legal advice of $50,000, tax advice of $20,000 and redundancy costs of $145,000.
Business services group manager Dean Riley said while it had been made clear that jobs would be retained, there was a possibility that up to five positions could be affected by the merger.
Mr Riley said the council-controlled organisation (CCO) would control assets worth about $150 million and employ 200 plus staff. He admitted to councillor Guy there was the possibility of another grant from rates to make the new organisation more viable.
The council insisted that at least one of the directors on the merged CCO needed to have local authority experience to avoid the situation that occurred in the past when there was a lack of appreciation among directors of the political fallout from their actions.
Membership of the holding company Tauranga City Investments (TCIL) that sits between the new CCO and the council will comprise two elected representatives and an independent director. Councillor Stewart called for the council representatives to be the mayor or his nominee and the chief executive or his nominee. The independent chair of TCIL will receive $25,000 a year.
The new directors will be selected by an appointment panel. Mayor Stuart Crosby and Mr Auton have been delegated the authority to establish the panel. The panel's recommendations will go to the council. The council will appoint the chairperson of both the merged CCO and TCIL.
