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12 January 2011Ventnor Town Council
Four Themes
Finances
OperationsBuilding
Management
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12 January 2011Ventnor Town Council
Four Themes
Finances OperationsBuildingManagement
o Profit/Loss
o Subsidies
o Reserves
o Insolvency
o Concessions
o Contracts
o Shows
o Closure
o 2003 Survey
o 2009 Survey
o H&S Report
o Running costs
oWGC Meetings
o Culture clash
o Auditor 2002
o Auditor 2009
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12 January 2011
Finances
Ventnor Town Council
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12 January 2011
Finances
Ventnor Town Council
Accumulating deficits
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Finances
Ventnor Town Council
Accumulating deficitsYear Amount
1994/5 -8,101
1995/6 -14,278
1996/7 -6,610
1997/8 8,284
1998/9 -4,050
1999/00 100
2000/1 -5,370
2001/2 -29,638
To date
Year Amount
2002/3 -15,211
2003/4 -8,382
2004/5 -36,638
2005/6 -68,892
2006/7 -33,111
2007/8 -21,752
2008/9 -30,336
2009/10 -76,191
To date-59,123-349,636
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12 January 2011
Finances
Ventnor Town Council
Subsidy Dependent
Element Amount
VTC 350k
IoWC
Total
300k
650k
Brewery
Loan?
Legal costs?
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12 January 2011
Finances
Ventnor Town Council
Brewery Loan
Discussed by WGC 22/9/03 20k contribution to refurbishment
Offer reported to TC 11/10/04
ODPM required increase to 26,712
Refurbishment done autumn 2004
Receipt of 28,000 reported 9/1/06
Over 14 years at 12.18 per barrel
Restructured by Concessionaire 15/8/07
26,714 over 8 years @ 278.27pm
16,520 outstanding @ 1/1/11
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12 January 2011
Finances
Ventnor Town Council
Diminishing Reserves2000/01 25,337
2001/2 -26,132
2002/3 - 7,988
2003/4 50,000
2004/5 46,265
2005/6 2,298
2006/7 20,827
2007/8 21,568
2008/9 39,735
2009/10 8,233
2002/3 Precept up from43,500 to80,0002003/4 Precept up from80,000 to115,0002006/7 Precept up from80,000 to99,000
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12 January 2011Ventnor Town Council
Management
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12 January 2011
Management
Ventnor Town Council
WG Committee
First meeting 17 February 1994 Chaired from 6 June 1994 by three
Councillors for next 15 years:
Of its 92 meetings all but the first 9 withpublic & press exclusion
Membership consisted of whole Town Councilafter District Auditors intervention of2002 until June 2009
Absence of Strategic and Business Plans
Absence of professional senior management
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12 January 2011
Management
Ventnor Town Council
Clash of Cultures
Local Government Commercial operation
Rooted in Local GovernmentAct 1872
Rooted in modernmanagement practice
Highly bureaucratic Flexible & pragmatic
Governed by electedrepresentatives
Governed by appointedexperts
Managed by amateurs Managed by professionals
Decisions move upwards Decisions move downwards
Funded by rates/precepts Funded by operations
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12 January 2011
Management
Ventnor Town Council
District Auditor: 2002
Letter from District Auditor 19/4/02 Estimated deficit of 21,500...town
council has already taken action..byincreasing precept from 43,500 to
80.000. However, this action alone is not
sufficient, the Town Council now needsto address the underlying problems.
I am also concerned that between20k and 30k expense has beenincurred for which there was nobudgeting provision.
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12 January 2011
Management
Ventnor Town Council
Audit Report: 2009 Clear lack of management
control Clear evidence of lack of
effective oversight from thepolitical level by members
Numerous financial controlfailures in the management ofthe venues finances
The concession contract was
unlawfully procured Financial controls over banking,
ordering...authorising chequesand time sheets and theadministration of petty cashwere inadequate
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12 January 2011Ventnor Town Council
Building
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12 January 2011Ventnor Town Council
Building
Time scale EstimatedCost
Short-term 120,000
Medium-term 50,000
Long-term 30,000
TOTAL 200,000
Furthermore, it is recommended that certain ground, foundation and drainageinvestigations are carried out... so that the various movement mechanisms which
have and will continue to affect the building are better understood.
Condition - 2003
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12 January 2011Ventnor Town Council
Building Repairs & MaintenanceThe Winter Gardens accounts from 1994
2010 show the spend on Repairs &Maintenance at 107,768 or 560 amonth
Another 61,728 is recorded as spent onModernisation of Premises
27,982 (45%) of this was for the late
2004 refurbishment carried out by W HBrading Ltd that required receipt of theCoors Loan before the Invoices could bepaid
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12 January 2011Ventnor Town Council
Building
Main items EstimatedCost
External walls
& windows
225,496
Roofs 158,965
Redecorations 81,317
Other 129,030
TOTAL 594,808
Condition - 2009
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12 January 2011Ventnor Town Council
Building Health & Safety - 2009
It would appear that thisparticular area has beenneglected by those responsiblefor safety at thevenue
Norecords ...that members ofstaff have undergone any formof appropriatetraining
Nodedicated asbestos survey
documentavailableThere are a number of issues
that need to be promptlyaddressed the most pressing
being fire safety
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12 January 2011Ventnor Town Council
Building Running CostsIts a very expensive building! The last 16 years accounts show three lines of100k or more: Heat & Light: 160k
Cleaning & Waste Disposal: 105k Rates & Water: 100k
No charges for these were made to any of theConcessionaires
The current costs of these elements are: Heat & Light: 2k per month Cleaning & Waste Disposal: 1.5k per month Rates & Water: 1k per month
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12 January 2011Ventnor Town Council
Operations
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12 January 2011Ventnor Town Council
Operations Catering Concessions
Concession From To Termination
N Smith Mar 94 Nov 94 TC terminated contractS Harris Jan 95 Oct 99 Ill-health
J Lucas Oct 99 Nov 00 Not in WGC minutes
A James Nov 00 May 01 Resignation
E Street Aug 02 Mar 03 TC terminated contract
C Reed-Sampson Jun 03 Jun 05 Completed 2 year term
T Clark Jul 05 Dec 06 Change to concession
During the 14 years 19942007 seven people held theCatering only Concession
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12 January 2011Ventnor Town Council
Operations Legal Costs
Element Amount
Compensation 7,000
Glanvilles legal costs
Roach Pittiss legal costs
Total
13,069
31,270
51,339
One concessionaire took legal action against the Town Council forbreach of contract. The dispute lasted several years...
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12 January 2011Ventnor Town Council
Operations Shows TheWG needs 2 well-attended shows a month to
break-even... May had 1, June none.[July 06]
Nogigs are scheduled forNovember[July 06]
Recent shows seem to have been less well attendedwith net deficits resulting [July 08]
Several recent shows have been poorly attendedwith net deficits resulting [Aug 09]
Even with a full programme:15 events held March -November 2007. Average tickets sold 202; averageincome 2,675 ranging from 6,339 (Acker Bilk) to 630(Psychic Art); average surplus of 291, a net total incomeof 4,372.
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12 January 2011Ventnor Town Council
Operations Bar + Catering August 2006, WGC decides to invite applications for a
combined bar & catering concession Finance Officers report includes: 1k a week must be a minimum receipt from any
concession. There is no other way of breaking even; Determining a notice period is another requirement
Sub committee interviewed 4 on 31 October Appointed Perks of Ventnor from 1 Feb 2007
Contract: 3 months 600 p/w; 3 months800p/w, then 1,000p/w
subject to review every two years, the first review beingon 1 February 2009 andsuch review will not permit a
reduction to below 1,000
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12 January 2011Ventnor Town Council
Operations Bar + Catering
From To Wks P/w Amountpaid
Variationfrom 1,000pw
3/8/07 21/11/07 16 800 12,800 3,200
22/11/07 28/11/07 1 1,000 1,000 0
29/11/07 2/4/08 18 600 10,800 7,200
3/4/08 31/12/08 39 800 31,200 7,8001/1/09 29/4/09 17 500 8,500 8,500
30/4/09 27/10/09 25 800 20,000 5,000
Totals116 102,500
31,700
In response to a series of letters requesting rentreduction due to low activity levels the Committee agreed:
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12 January 2011Ventnor Town Council
Operations
Finance Officers advice: Determining a noticeperiod is another requirement had been ignored
Town Clerk retired on 2/10/09
One months notice given by Perks of Ventnoron 25/9/09 to finish on 27/10/10
VTC need 3 or 4 months to ensure a decent
solution [in fact] just 9 days(TC 19 October) Dispute over payment for stock and
miscellaneous items ended with payment of14k to concessionaire
Terminal confusion
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12 January 2011Ventnor Town Council
Operations Rescue operation
Emergency meeting with IoWC ChiefExecutive 16/10/07
VTC agreed to take over concession to save
jobs and secure income, in extremecircumstances
Including: absence of trading information
divided Town Council another Town Clerk resignation angry Town meeting
Limited reserves
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12 January 2011Ventnor Town Council
Operations All Options explored
Improved governance& management
Increased subsidy Summer programme
Raising theatrecapacity
Exhibitions
BUTCurrent economic climateChanged patterns of leisure activity
Seasonal nature of tradingMaintenance backlogUnfit for purpose, very expensive hallOverhead costs
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12 January 2011Ventnor Town Council
ConclusionsTown Council management of WG hasnt worked,isnt working and cant work
Still subsidy dependent
This years deficit similar to last (c75k)
No capital for investment
IoWC ending Management Agreement
With this track record, acceptance ofownership would be irresponsible
Unanimous Town Council decision to move on
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12 January 2011Ventnor Town Council
To have a future...
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12 January 2011Ventnor Town Council
To have a future...
Ventnors Winter Gardens musthave:
Realistic Business PlanSignificant capital investment Commercial operation that can
incorporate community use Experienced professional
management
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