Napier City Council spent more than $16,000 on redundancy payments to drivers when it terminated its contract with the company running its ill-fated Art Deco bus service.

The council confirmed this week it had sold its two Art Deco buses to a Napier business for $50,000 after quitting the failed tourist venture which cost ratepayers more than $1.1 million.

Asked yesterday about the cost of quitting the operating contract with Nimon & Sons, which ran the service, the council said early termination of the two-year contract had cost it $16,800.

Nimon general manager Pete Patterson said all that money had gone to 10 bus drivers plus other "fill-in" workers who had been employed on the seven-day-a-week, two-bus service.


Nimon had not sought any compensation for the early termination of the contract "but we did point out to the council that we did have some staff who now no longer had jobs," Mr Patterson said.

"To their credit, Napier City Council said, yes, we feel for the staff, what should we pay each one? So we gave them a list of the drivers and what we thought they were due, and Napier City Council did not argue the toss. All of that money ... went to the staff."

Mr Patterson said some of the drivers had been able to remain doing part-time work for the company, but roles were limited.

"We're a school bus company with tours so we have only limited positions for full-timers. The Deco City bus contract required full-timers to keep it running seven days a week."

Asked why the company didn't seek compensation, Mr Patterson said: "We could have pushed the issue but it wouldn't have made us any friends in council. Ratepayers would turn around and say - quite rightly - Nimon & Sons are skimming it off the top by trying to get more money than they're due.

"We don't want bad blood between us and any council, nor with the ratepayers ... "

While the $1 million-plus loss on the venture and the low sale price for the buses had outraged ratepayers, Napier Mayor Bill Dalton said yesterday it made no sense for the council to keep the buses if it was not going to run them as a tourist service.

"To keep them running at a loss of $300,000 or $400,000 a year would have had an ongoing impact on rates ... "


Mr Dalton said while he understood the anger and frustration of ratepayers "it needs to be put into context of other things that the council have done that have worked tremendously well".

"Our critics are climbing all over us on the loss of something a little over $1 million but when the Hastings District Council spent $13.5 million on a building [the Opera House] that had to be closed because it was unsuitable, hardly a murmur was raised.

"It's because we have got one or two extremely vocal critics who are stirring the thing up."

Mr Dalton said the development of the Parklands subdivision and the Awatoto wastewater treatment plant were two examples of projects in which prudent council management had "resulted in savings of many millions of dollars".

Buses 'unsuitable' for streets

Napier City Council spent just over $1 million buying and then repairing its two Art Deco buses — so did the new owner who bought them for $50,000 get a bargain?

Not according to the company that was contracted to run the council's tourist bus service.

Nimon & Sons general manager Pete Patterson said he was "not even a little" interested in making a bid when the buses were put up for tender.

From a reliability perspective "they were totally unsuitable for running around urban streets as far as we were concerned," he said.

The council initially spent $837,000 on the two buses, which were built in California. It then spent a further $165,000 on repairs carried out by Tauranga-based Kiwi Bus Builders.

"Even after they came back from Kiwi Bus after their makeover there were still reliability issues that needed to be ironed out," Mr Patterson said.

"We may find that they are perfectly reliable for the next 10, years but I doubt it.

"I certainly wouldn't put any of my money towards them.

It remains to be seen how it pans out for the new owner."