Tauranga would lose two of its biggest festivals if they did not have healthy bank balances to tide them over between events.
The directors of the flagship Garden and Artfest and Tauranga Arts Festival have defended city ratepayers helping to fund their events, even though they had substantial savings.
They were responding to Tauranga councillor Rick Curach who opposed the grants on the basis that the festivals were on a sound financial footing. He said that all the council was doing was putting ratepayers' money into the festival bank accounts.
The Garden and Artfest, which had $205,000 in the bank by the end of last November's festival, was granted $20,000 at a tense council meeting this week. The Arts Festival, which had savings of $160,000 was given $25,000.
Garden and Artfest director John Beech told the Bay of Plenty Times Weekend the money did not just sit there gathering interest. By the time sponsorship and grants started coming in for next year's event, their bank balance would have dropped by at least half because of administration and planning costs.
''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.