Tauranga City pays consultants $490,000

Tauranga City paid consultants nearly $500,000 to help restructure the council and its two trading companies.

The financial impact on ratepayers was expected to climb significantly higher once all the bills were in and redundancy, recruitment and legal costs added.

The Bay of Plenty Times has obtained figures under the Official Information Act that show nearly three-quarters of the $490,000 was spent on advice to restructure the council.

By the time GST was added to the $363,000, the cost would amount to nearly 30 per cent of the estimated $1.5 million the council expected to save in the first year.

A further $127,000 was paid to public sector consultants Morrison Low to review the two financially troubled trading companies, Tauranga City Aquatics Ltd and Tauranga City Venues Ltd.

The review resulted in the two companies being rolled into a single structure, with the appointment of new directors to be announced later this month.

The restructuring of the council saw an unspecified number of jobs lost and 29 new positions created, resulting in a net loss of 30 full-time positions.

It has injected uncertainty into the futures of some key staff whose jobs have been disestablished, forcing them to reapply for new positions.

Three firms were brought in to help with the restructuring, starting with Morrison Low being paid $80,000 when former council chief executive Ken Paterson led the project prior to his sudden death last year.

Interim chief executive Leigh Auton, hired on a fixed-term contract to continue the restructuring, paid a further $65,000 to Morrison Low, meaning the company has received $272,000 for its role in restructuring the council and trading companies.

Multi-national management consultants GHD has so far billed the council $203,000.

A further $15,000 was paid to Progressive Management, bringing the total bill for the reorganisation to $363,000 or $417,000 including GST.

Once GST was added to the review of the companies, the total bill to the end of January was $560,000.

Mayor Stuart Crosby agreed it was a lot of money but it was a huge task independent consultants needed to carry out.

"At the end of the day, there will be significant ongoing savings."

Mr Auton said the work was carried out within the normal range of costs.