Holdfast Bay Council doubts Glenelg Football Club will pay back debt as it seeks to have loan written off
A SANFL club is hoping the local council will write off a multi-million dollar debt. The council recognises it’s unlikely to see most of the money — and a club fundraising campaign has fallen short of its target.
- Glenelg battles $3m debts, might not field a team in 2017
- Glenelg greats launch debt demolition campaign to stop ailing football club from folding
- Glenelg Football Club to pay interest only on council debt
HOLDFAST Bay Council doubts Glenelg Football Club will ever repay all of its $2.3 million debt to ratepayers, as the club seeks to have the entire loan written off.
The council’s audit committee last month analysed the club’s finances and predicted there was a chance the Tigers would struggle to repay $400,000 of the loan.
The council adjusted its accounts last week to reflect the fact that it might never get all the money back.
Club president Nick Chigwidden said the Tigers would like the council to relieve all of its debt but it had not requested any particular amount.
“We’re willing to work with them for anything,” Mr Chigwidden said.
“There’s various options — debt relief may be one of them.
“We’ve got to work together with them for a solution that helps Glenelg Football Club but doesn’t put the council in a compromising position.”
Holdfast Bay Mayor Stephen Patterson said the council was still in confidential negotiations about how to best help the club.
“There’s no point ruling things in and out,” Mr Patterson said.
He said it was “always a challenge” to balance what would be good for the club but also value for ratepayers in the long term.
Mr Patterson said he believed in the embattled club’s “long-term” prospects of paying off the 2001 loan, which paid for the Tiger’s function centre.
In February, the Glenelg Football Club announced it had made a $571,000 loss for the year ending October 2015, sparking worries it would not be able to field a team in 2017.
As well as its debt to the council, it owes $1.2 million to ANZ for its bistro.
The club launched a Save the Tigers debt demolition campaign in June in the hope of getting $1 million in donations. So far it has raised $100,000.
The audit committee’s opinion that the club would struggle to repay ratepayers was based on predicted future cash flows and the fact that club had not paid off any principal on its loan since 2012.
The club had asked the council for debt relief, which the council has yet to agree to.
Holdfast Bay business services manager Ian Walker said the club’s $2.3 million debt to the council was still “due and payable”.
He said the council’s audit committee’s decision to describe $400,000 of the loan as a “receivable impairment” was “just a provision to say there is some doubt about it (being repaid).”
Mr Chigwidden said the impairment was “not anything that’s been driven by the club”.
Rosemary Clancy was the only councillor to vote against accepting the impairment last week.
She said it could give the impression the club did not have to pay back the last $400,000 of its loan.
“I’m far from happy about this,” Cr Clancy said.
She will push at the council meeting next Tuesday for the impairment to be removed from the financial statements.
It was also revealed in the council’s annual report that the council loaned the Tigers $120,000 in December for marketing of the Glenelg Club at Glenelg Oval.