''If we came out of every festival with a zero balance, then we would not be able to continue to run the festival.''
Mr Beech said the festival was weather dependent and needed substantial savings as an emergency back-up.
Added to that was the fact that the festival was run by a charitable trust and its volunteer trustees, who put in huge hours, were liable for shortfalls.
''We work really hard to make the festival break even and if it makes a profit, then that is good.''
He said it was one of New Zealand's premier garden and art festivals and this year's council grant of $20,000 was valuable as bridging finance so it did not have to draw down the bank balance too much. Mr Beech said a lot of the sponsorship and grants only come through on the year the festival was held, with the next festival being 2014.
A healthy bank balance was vital to tide them over.
Although the council's money was not tagged, he said it could be argued that some of the money was spent on free events. Last November's festival, the ninth, made a profit of $20,000.
Tauranga Arts Festival director Jo Bond said the organisation could not operate if it did not have enough in the bank to provide a cash flow during the alternative year when there was no festival.
There were still salaries, planning and office expenses and, like the Garden and Artfest, there were potential financial liabilities on trustees.
She said a good bank balance showed the organisation was fiscally responsible and this was important to a lot of funders. ''They see it as a positive,'' she said.
It was the city's biggest festival lasting 10 days with more than 80 performances. Grants and sponsorship were vital in keeping ticket prices affordable, including children's and school shows which were subsidised heavily. The $160,000 had slowly accumulated during 14 years and s even festivals, with some festivals making money and some losing.