Restructuring cost more than $1m


Tauranga City Council paid out nearly $1 million in redundancies for a restructuring that achieved a reduction of fewer than five positions.

The restructuring, which cleaned out nearly all the top-tier managers, was described as "difficult and messy" years by city councillor Terry Molloy.

A full breakdown of the costs and gains from restructuring was spelt out to a meeting of the council yesterday.

It showed that the $4.1 million gains from disestablishing 38.3 full-time equivalent jobs narrowly outweighed the $3.8 million costs of creating 33.7 jobs.

Any gains from restructuring looked like being wiped out by the 10 jobs created from new "post-review" positions and "reinstated" positions. However, the council opted to treat the transfer of seven staff to its restructured commercially focused company as a reduction, along with the dropping of two staff from those employed to electronically scan data.

The net result was the loss of three jobs compared to the 522 fulltime equivalent positions in the organisation a year ago.

Taking into account the $1 million, which the council says restructuring has reduced the "market movement" in salaries, the budget for salaries dropped by $1.4 million.

The overall cost of restructuring was $1.35 million which included redundancies of $934,000.

The council's new CEO Garry Poole said restructuring had refreshed the organisation and brought in new faces.

Councillor Murray Guy voted against the council approving the costs of the restructuring, saying they had only achieved some of the savings envisaged by former CEO, the late Ken Paterson. "I am not that interested in new faces, I was interested in new attitudes," he said.

Mr Guy said afterwards that about half of the new jobs created by the restructuring were filled by existing staff.

Mr Molloy said the council had been through two of the most difficult years for a long time during which it had worked with four chief executives, including Christine Jones when she served as acting CEO after the death of Mr Paterson.

He said restructuring had delivered an organisation that was fit for purpose and the key to the future.

Councillor Larry Baldock said it had been a huge task during a time when the council had taken some big hits such as the Rena disaster.

"July 1 will be a new day for this organisation."

Mayor Stuart Crosby said the restructuring had been challenging.

"New faces will bring new attitudes and that is why they were appointed."

Councillor Catherine Stewart said she was disappointed with the result of the restructuring and the circumstances that had occurred since Mr Paterson's death.

Councillor Wayne Moultrie said a person would have to be churlish not to accept that the restructuring was a real positive for the community.

- Bay of Plenty Times

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