The Tahunanui community is banding together to help save its centre after revelations that it lost more than $100,000 in less than a year.
At a special meeting on Monday, those who used the centre voted to commence proceedings to liquidate the society which had oversight of the society and its adjacent playcentre.
Board chair Fiona Thomas told a well-attended meeting that it was identified in December that the financial situation was such that continuing services would put the society into an “unworkable situation”.
As of March 31, 2018, it had a trading loss of $53,000 and its cash assets had reduced from $141,000 to $43,000.
“During the trading period from 1 April to 21 December this position worsened to the point where we were advised that we needed to cease trading as we were insolvent.”
Currently the society owes $54,000, which exceeds its cash assets by almost $47,000 – this is largely made up of the need to pay its staff. The community centre has a manager and seven other staff.
They have set up a Givealittle page to help cover the shortfall.
The centre put up a notice on its Facebook page in December saying that it had to close immediately. “Unfortunately, we were not aware of the precarious nature of our financial position until shortly before we pit the notice up and immediate followed the advice given – to cease trading,” said Fiona.
“We are sorry that this has led to so much distress that this had caused the community and the unfortunate timing.”
Retired judge Oke Blaike chaired the meeting and said that it was convened to start the process of liquidation – which was the advice of an accountant.
“Liquidation can be reversed if it subsequently found to not be the best option but enables a month to receive further financial advice.”
It is understood that part of the trouble was that the community centre had a large government contract for three years, which recently ended. Once the grant money dried up, staff were then paid out of cash reserves rather than their contracts ending.
The community centre and playcentre both sit on council land.
There was concern from parents of children at the playcentre, which was closed even as they headed back to work.
Craig Vercoe of Nelson Tasman Kindergartens said that the organisation would offer a transitional service free of charge for any children affected by the closure.
However, others were worried about the future of the community centre’s services.
Cushla Vass, who worked as the centre’s receptionist said the whole centre was important.
“You can’t believe the things that we have done for people here. I’m so proud of this community.”
Mayor Rachel Reese said that as soon as council were made aware of the situation it was immediately acted upon – connecting the board with assistance and financial advice.
“From a council perspective – across the whole Nelson community we understand the value of this centre for the community.”
She said the centre was an important part of Nelson and the need for it was as present as ever.
Manager of the centre Judy Robinson said that she had sent an email on December 7 asking council for help. It is understood that by that stage the society was effectively insolvent.
Rachel said the board were not aware of the financial predicament as Judy had not raised it with them.
“The board has had to get to grips with that very quickly … we have pulled out all the stops we can to help the board.”
She told the meeting that the centre had hoped the retain a government contract but didn’t and then used funds to bridge the gap.
Murray Leaning said as a community, the hub needed to stay where it was.
“Let’s not look back let’s look forward.”
However, when it came time to vote there was confusion as to what they were voting for and who was allowed to vote.
The motion to liquidate the society failed. However, then Murray explained that if the society was not liquidated then the board would likely face personal liability for its finances. He said that it seemed like the only option was to liquidate.
The vote was then taken again and it passed. Another motion was put to make Murray the head of a working group to help figure out a way forward for the community centre and playgroup.
Another meeting signing off on the liquidation is due in February with Murray and the working group to report back to the board in 21 days.
