Mudtopia hits Rotorua Lakes Council with loss of more than $600,000

The mud has long gone but the bills from the Rotorua Mudtopia festival weren't so easy to wipe away. Photos / File

The final cost of Mudtopia to Rotorua ratepayers has been revealed, with the loss suffered being more than $30,000 higher than previously estimated.

Under a Local Government Official Information and Meetings Act request, the Rotorua Lakes Council has revealed it spent a total of $1,681,814 delivering the event.

In response to Rotorua Daily Post questions, the council has confirmed the loss suffered was $600,238.

In May this year the final loss was reported to the council's operations and monitoring committee as just over $570,000.

Council operations group manager Henry Weston said the reason for the difference was the coding of some costs.

"Some have shifted between operating costs and capital expenditure," Weston said.

He said a contribution from the Ministry of Business, Innovation and Employment was also not finalised at that time.

The biggest expense was for "materials and services provided" which cost more than $778,000.

Mudtopia being set up in November 2017. Photo / Stephen Parker

The second-largest expense was for festival directors - $397,996.

The cost of running the festival is broken down into festival management which cost $519,251, capital expenses of $166,403 and $996,160 of "other expenses".

Weston noted the festival brought in almost $909,000 in revenue.

Shortly after the event in December 2017, the shortfall was estimated to be $460,000.

"Cost savings were made, however revenue fell shorter than anticipated and the final shortfall was $600,238," Weston said.

Councillor Rob Kent had spoken against the event since its concept and he said his view hadn't changed.

"It should never have taken place in the first place. The initial agreement was to underwrite to $500,000 so I'm not happy at all we've exceeded that figure," Kent said.

"Councillors are not elected to take risks and gamble with ratepayer money. They are expected to actually act in the interests of the ratepayers."

The council last week set the rates for 2018/2019 which will see an average increase of 5.7 per cent.

Kent said he was the only councillor who voted against the Long-Term Plan and the rates increase.

"Everything we spend has to be paid for somehow."

Councillor Trevor Maxwell said he was disappointed the council wasn't going to run the event again.

"We knew the first one was going to hard. But it would have become an iconic event," he said.

"We've got to give things a try and we've now decided not to continue."

In May, Weston told an operations and monitoring committee meeting that deciding not to have a role in Mudtopia did not necessarily mean no longer having the event in Rotorua.

Maxwell hoped another party would consider picking up the contract for the festival.

"I did hear there were some people showing interest and I hope so because I think it could work out to be a wonderful event."

But Kent said he didn't believe a new partner would pick up the event.

"I would be very surprised, based on the raging success council managed to make of it, if anyone would touch it with a five-foot pole."

Toi Ohomai Institute of Technology sponsored the event and had a stall there. A spokeswoman said the institute would consider participating in the event if it ran again.

"We thought the event itself was brave and it worked for us. If it was run again we would consider it."

The institute used the event to get people to understand what courses it offered.

In a council meeting last August, after those reports, the council presented three economic forecasts for the event - realistic, pessimistic and optimistic.

The pessimistic forecast estimated the event would bring in more than $1.3 million in revenue and the net loss would be more than $575,000.