An external financial review of the Bay Pavilions Arts and Aquatic Centre has found it has been operating at a loss more than double what was forecast and may face further financial loss over the next decade.
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In early 2023, the Eurobodalla Shire Council engaged with advisory group KPMG to conduct a financial performance review and identify key revenue and cost drivers of the multi-use facility.
The review, which was released by the council on August 9, outlines that Bay Pavilions' operating loss between July 2022 and March 2023 was $1.2 million, which is 120 per cent higher than forecast.
According to the review, financial performance is weaker than anticipated due to revenue targets not being met and "higher than forecast expenditure in the first nine months of operations".
Over those nine months, patronage was 12 per cent lower than expected while operating expenses were $454,000 or 13 per cent higher than anticipated.
"The facility's financial performance in the first nine months of operation has been weaker than what was anticipated in the original business case...this review sought to identify the reasons for the variance and implications for the facility's future financial sustainability."
- Bay Pavillions Financial Performance Review, Final Report 27 June 2023
The review said increased utility and cleaning costs drove up overall operating expenses.
According to the review, the closures of the Batemans Bay Outdoor Pool, Community Centre and Visitor Information Centre were expected to subsidise the operating loss of the Bay Pavilions.
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The review considered more than a dozen iterations of financial models penned between August 2017 and April 2021 to present the facility's current financial situation.
It found the Bay Pavilions makes an operating loss of $6.10 per patron and labour and utility costs are significantly higher than forecast.
The document outlined the council "must identify options to minimise the ongoing losses" and suggested eliminating projects to continue funding the facility.
Council mayor Mathew Hatcher said he welcomed the review's public release.
"Transparency is critical for community confidence," he said.
"There are important lessons to be learned from this review and decisions to be made based on the recommendations in the report."
- Eurobodalla Shire Council Mayor Mathew Hatcher
The review will be presented at the council's next meeting on Tuesday, August 15.
Learn more about the council's upcoming meetings at esc.nsw.gov.au.
Megan McClelland
Megan McClelland is a journalist for Australian Community Media working in the Eurobodalla. Email: megan.mcclelland@austcommunitymedia.com.au Mobile: 0448194726
Megan McClelland is a journalist for Australian Community Media working in the Eurobodalla. Email: megan.mcclelland@austcommunitymedia.com.au Mobile: 0448194726
