Gym owners' ire grows as wait for answer goes on

by John Cousins | 24th November 2009

Tauranga gym owners are no closer to proving that the price to join the council-owned gym at Baywave was unfairly undercutting commercial rivals.

Ian Stevenson, of Bodyzone, confronted council yesterday on an issue that has generated deep bitterness among the city's commercial gym operators for nearly four years.

Their best chance to discover what lay behind the pricing of Baywave's members-only gym, ClubFit, took place on June 29 when council terminated its contract with management company LeisureCo and seized control of the city's aquatic centres.

Mr Stevenson expected gym owners would finally get their answer three months after council took back management of the pools, but his hopes were dashed yesterday. It now looks  as if they may not get the information until next August.

He disputed there was a level playing field in Tauranga's gym industry when ClubFit's annual membership of $948 included free admittance to Baywave's pools, normally worth $709 a year.

Membership of other city gyms ranged from $550-$600 up to $800-$900 a year.

Mr Stevenson said that after four years the council clearly had no idea of what the costs were to run Baywave, or if it did it was not disclosing them.

He said council set up Tauranga City Aquatics Ltd (TCAL) to allow the pools to operate in a more business-like manner, although he suspected the structure was also used so council could hide behind a corporate veil.

Mr Stevenson said TCAL should comply with council reporting standards: "What is really going on at Baywave ... who is in charge here?"

He took the opportunity to say that another council-controlled organisation, Baypark's Tauranga City Venues Ltd, operated at a loss of $500,000 for the 2009 year.

Mayor Stuart Crosby called Mr Stevenson's allegations inaccurate and damaging: "We are audited through Audit New Zealand - we are not hiding behind a veil."

Council business services manager Malcolm Gibb said TCAL was required to comply with statutory reporting requirements and provided regular information to council through the holding company.

Problems had been experienced with continuity of the information since council took over the  pools' running, he said.

Meeting chairman Murray Guy tried to narrow the focus of the discussion by asking whether ratepayers were subsidising a commercial activity and if gym operators had been told the information would be forthcoming.

Council chief executive Stephen Town said Mr Stevenson's  allegations were unhelpful and not reflective of what was going on.

Mr Town said the information would be released once council felt competent about the figures.

Legal obligations under the contract with LeisureCo meant it had not been at liberty to disclose various components of prices, he said.

A new financial system for the aquatic centres had started in July-August and the business needed to run for a year to establish the annual costs of the various components.

Cr David Stewart,  chairing TCAL while Warren Banks was in East Timor as a United Nations military observer, said the changeover of management had created some problems.

Cr Stewart said the council was also reviewing its position on whether it should be involved in private-enterprise activities in community-owned facilities  such as libraries and aquatic centres.