Leisureland submerged in losses of €400,000

Galway’s only public swimming pool is sinking in losses. Galway Salthill Fáilte, which includes Leisureland in Salthill, incurred trading losses of almost €400,000 last year, according to a new report.

The day-to-day losses are so bad the operators are planning to reduce the opening hours to save money.  The scale of the loss is huge but it is improving – the loss in 2012 was €399,449 compared with losses of €483,500 in 2011.

Ciarán Hayes, Director of Services for Transport, Infrastructure, Recreation and Amenity, who has overall responsibility for the facility, gave the grim news to City Councillors in a circular.

In it, he said Leisureland, “consistent with the private sector, has suffered from the difficult trading conditions given the recession and financial cutbacks.”

Mr Hayes noted that the gym at Leisureland has performed well and is on a par with 2011. However, he said that there has been a reduction in the numbers of people using Leisureland.

Another reason for the losses is, “there has been no price increase since 2011, while costs have been increasing,” he said.

“Income from concessions has been reduced, again due to the current state of the economy,” he said.

The report also shows that a rates revaluation resulted in the rates bill from Leisureland to Galway City Council almost doubling to €78,500, a jump of about €35,000 in commercial rates liability. Mr Hayes confirmed: “Further cost reductions are being examined presently and a review is being undertaken of the opening hours.”

He said that a reduction of costs, “in the order of 20% has been secured in respect of the main contracts.”

Mr Hayes revealed that the City Council incurred expenditure of just over €250,000 that is not reflected in the company accounts.

They include a capital loan repayment of €116,283 in respect of the gym; that loan was taken out in 2005 and is a ten-year loan.  It also includes a provision of €140,000 for legal fees for a court case over the installation of a Combined Heat and Power Plant (CHP plant)

Mr Hayes explained: “QDM Ltd took a case against Galway City Council and Leisureland in respect of the procurement of the CHP plant. The case was defended and the Council was successful. Costs were awarded against the plaintiff.

“Although a cost provision of €140,000 has been made, the actual costs were more likely to be €125,000 and include €14,000 in respect of the consultant engineer for the project. It is also prudent to provide for costs notwithstanding the awarding of costs to the Council.” Mr Hayes said €200,000 savings in energy costs will accrue in 2013 due to the new CHP.

City Councillor Niall McNelis (Labour) said the losses at Leisureland are worrying and show that the city needs a larger conference centre that is capable of holding bigger audiences and crowds for events.