Napier City Council has decided to absorb $14,000 worth of Basketball Hawke's Bay debt.
At its city services committee meeting held yesterday, councillors voted unanimously to write off what the code owes it in hall hirage fees. This decision is dependent on Hastings District Council voting the same way at its meeting to be held today.
On Tuesday it was reported that Basketball HB is facing a funding crisis with the body's board chairman asking both Napier council and its Hastings counterpart to forgive almost $30,000 worth of debt.
Napier council's director of corporate services Adele Henderson offered a reason as to why the organisation found itself in this position in her report to council.
"Basketball HB had through the support of funding agencies received financial support in 2015 to meet their local operational requirements, staffing, court hireage, coaching etcetera," she said. "In particular, officers understand it received grant funding specifically to meet court hire costs.
"However, officers were advised that some of this funding was redirected to meet other activities like supporting travelling age grade rep teams when separate funding applications were either unsuccessful or not applied for in time."
She went on to recommend that instead of a grant it provide a one-off writeoff of the current debt.
Mayor Bill Dalton said Basketball HB was an organisation that looks after about 4000 kids in sport.
"They have done a good job over the years until they became, I would suggest, got out of their depth," he said. "I don't want to be a part of a council that says righto guys pack up your bongoes and go. I want to be part of a council that gives them another go and our way of doing that is to write off this debt. So I support the council writing off this particular debt."
Hastings council's acting chief financial officer Bruce Allan has recommended that council decline Basketball HB's request for funding.
"While the reason for the approach from Basketball HB is understood, a payment of a grant in these circumstances is not normal practice for council and would contain an element of precedent setting as other sporting and cultural activities may believe it appropriate to seek council support when they enter into some financial difficulty," he said.
"A potential consequence of declining this request from Basketball HB is that the organisation will not be able to pay the debts that it has due and will therefore not be able to demonstrate that the 2015 funding that it received was used for the purposes for which it was granted, putting any 2016 funding seriously at risk.
"It is understood that if this was the outcome, then unless Basketball HB could find the funds from another source, they have not indicated that this is possible, then the organisation is likely to cease trading."
He did note that if councillors move ahead with this recommendation it could place basketball programmes at risk.
"Although in Hastings, sports centre management has indicated that in similar circumstance in the past they have run basketball programmes to ensure the survival of the sport," he said.
In addition to the $30,000 owed to the councils, the not-for-profit organisation also owes Pettigrew Green Arena $23,506 for court hirage.
The arena, not willing to write off the debt, instead extended payment terms.