Canada's Brett Rheeder at Crankworx 2018. Photo / File
Rotorua mountain biking festival Crankworx may be in line to receive an additional $1.6 million over the next seven years.
The funding is now reliant on the approval of a full meeting of the Rotorua Lakes Council, after the council's Strategy, Policy and Finance committee recommended the funding at a meeting on Thursday morning.
Council officers recommended an additional boost of $100,000 for 2020/21, and a commitment of $250,000 each year for the six years following.
The first year's funding would come out of a $29 million fund to stimulate and support the Covid-19 economic recovery, set up as part of the council's 2020/21 annual plan.
Following years' funding would be part of the 2022-2027 Long-Term Plan, and all of the council's ongoing funding would be conditional on Mountain Bike Events (MBE) - which ran Crankworx - continuing to receive funding from the Ministry of Business, Innovation and Employment (MBIE) via its Major Events Fund.
A report for the committee meeting stated the council had invested a maximum of $150,000 per year in previous years.
The report also said the direct economic impact from Crankworx on Rotorua was an average of $4.31m annually and a cumulative impact of $25.8m since it began in 2015.
Total council investment to date had been $842,152, a Rotorua Lakes Council spokeswoman told the Rotorua Daily Post after the committee meeting.
She said that was made up of $525,000 from the council, and a working capital/underwrite figure of $167,152, and $150,000 from Rotorua Economic Development.
The committee heard a presentation by consultant Sharon Van Gulik, who was commissioned by MBE to perform an independent review into the performance of Crankworx.
Van Gulik said Crankworx delivered "exceptional results" that were "sector-leading and best practice".
She said it had achieved "incredible growth" and met all MBIE's Major Events Fund priorities, including being internationally significant, creating social connection, reflecting and celebrating New Zealand culture and building national pride.
"Not many deliver on all of these, Crankworx Rotorua does."
Crankworx was "knocking it out of the park" in international reach, and the event did well to encourage visitors to "stay and play", she said.
Van Gulik said the event was also performing well considering "underinvestment" but said there was already "significant stress" on the event as it relied heavily on volunteer work and "goodwill".
"It is not sustainable without increased public investment ... with Covid, [public investment] is even more essential."
She said there would likely be "extraordinary demand" as a result of Covid-19 because it could be "one of the few things people can do".
"Crankworx is critical to Rotorua's economic development ... and your growth and aspirations going forward."
Council strategy manager Jean-Paul Gaston and Rotorua Economic Development interim chief executive Andrew Wilson also spoke to the committee in support of the report's recommendation.
Deputy mayor Dave Donaldson sat in the public gallery during discussion and voting, having declared a "non-financial conflict of interest" in the matter.
Donaldson was an MBE director until May this year.
Councillor Tania Tapsell said she had been a critic of Crankworx at previous meetings.
"But every single year that I walk through those gates ... and I saw the proud locals, I saw the committed volunteers and I saw the excited visitors, and I actually felt very sorry for ever criticising or having any doubts about this event."
Councillor Reynold Macpherson asked council chief financial officer Thomas Colle if he was "aware of the justification" for the $100,000 for the 2020/21 year.
Colle said he would "refer [councillors] to [Van Gulik's] presentation ... and the presentation you've just had which provides you with more than adequate justification, I would have thought, for the rationale for the increase in funding".
Macpherson thanked him, adding "that doesn't add anything".
He suggested amending the recommendation to separate the funding for the 2020/21 year from the funding for future years.
The first part of the motion called for funding to Crankworx "in a context where [the] council's revenues are reducing ... and there's no absolute surety at all that MBIE is going to come through and support major events".
"The second part of the motion calls for a subsidy to be allocated outside of long-term planning processes and criteria, which [the] council uses to adjudicate competing priorities fairly and wisely."
Macpherson's rationale for the amendment was not accepted by mayor Steve Chadwick, who had the ability to decide as the mover of the recommendation under the council's standing orders.
"We did put aside that $29 million which was about 'Build Back Better' and [Crankworx] is showing that it's better every year.
"I also heard very clearly from council officers that we'd consider the Long-Term Plan funding implications, so I don't support that at all.
Councillor Sandra Kai Fong and Rotorua Lakes Community Board chairman Phill Thomass both asked how Covid-19 might affect the event.
Gaston said the weather was also a "significant risk" to the event and Covid-19 implications were "just another thing on top" of other risks.
Council chief executive Geoff Williams said it was "impossible to predict the scenarios that we might be faced with in the future".
"We would examine the situation, we would look at the potential options, which would include, obviously, postponement or cancellation of the event through to holding the event without an audience."
Councillor Peter Bentley said he had spoken with some previous councillors from when Crankworx "first started off".
"Their understanding at the time ... that given time, [Crankworx] would start to show a return and reimburse council."
Colle said the council was a 49 per cent shareholder in Crankworx.
He said the event had drawn on the council's $500,000 underwrite in "the first few years", but the event then delivered surpluses.
That had been offered to pay the underwrite back, but the council decided at the time it "made no sense" for them to pay the underwrite back when it was required for working capital.
"From a technical perspective, the underwrite has been cleared."
Bentley said he was "comfortable with [the current funding] $150,000 going forward".
"I don't think we can go to our ratepayers at the moment and increase, year-on-year, this additional $100,000. That's a pretty hard sell."
The recommendation passed with all in favour except Macpherson and Bentley and will require final sign-off at a future full council meeting.
Speaking outside the meeting, Crankworx event director Ariki Tibble said Crankworx was "always battling to make the event viable".
"Any time there's a decision in favour of the event we're relieved and appreciative because it just gives us the wind in our sails that we need to be able to take the event to the next level."
He said Tapsell's apology for past opposition was "really lovely".
"It's vindicating to be here six years later and have the industry reflecting back to us that mountain biking is exactly what we felt it was going to be. It's humbling."
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