Carol Altmann – The Terrier

Here’s a little figure that slipped by without too many people noticing: last year Lyndoch Living aged care recorded a deficit of $1.772 million – its largest loss in recent years.

You won’t find this figure in the Lyndoch 2018 annual report online, nor will you find it any media reports, but it can be sifted from a federal website that collects the financial records of charities. Such is my reading list.

It was here I learned that Lyndoch went from an $846,563 surplus in 2017, to a $1.772 million deficit in 2018. It is the third deficit in the past four years under CEO Doreen Power and her board. 

To be clear, Lyndoch Living is a not-for-profit, publicly funded body that is not designed – thankfully – to record fat surpluses on the back of caring for our infirm and elderly.

But nor is it intended to run at a loss without a detailed explanation.

As it happens, the 2019 Lyndoch AGM is next Tuesday (Oct 29), so I wanted to dive into last year’s figures before we find out how Lyndoch is faring this year.

And before I go any further, I also want to make it super clear that Lyndoch Living is full of terrific, hard-working staff who are devoted to making the lives of residents the best they can be. (Hello to you, staff! I know many of you read The Terrier, but are unable to comment. That’s okay, I see you.)

Lots of great stuff happens at Lyndoch.

But it is also blindingly obvious that Lyndoch Living is changing, and Ms Power has, since taking over in January 2015, had her foot to the pedal with big-buck projects and a very different management style.

In the past 12 months in particular, Lyndoch Living has been on a buying spree.

It bought the May Noonan Hostel in Terang, and the Warrnambool Medical Clinic practice, and the Health Spot practice in Warrnambool, and in the next couple of years, plans to build a new “super clinic” on Hopkins Rd as part of a full-blown, $100 million masterplan to be rolled out over the next eight years.

(Ms Power has a liking for “super clinics”, having overseen an $8 million one in her last job, at Plenty Valley.)

I’m all for a spruce up, but $100 million is serious money.

Lyndoch’s corporate area was first in line for an upgrade – funny how that happens – and now work on Swinton Wing is in full swing, at an expected cost of $11 million.

The simple question behind this head-spinning, full-throttle expansion is: where is the money coming from?

I want to be reassured, as I am sure others do, that this is not yet another case of corporate grandstanding, with big-ticket, capital works projects blitzing the basics like having enough qualified staff looking after our old folk.

(Watch the short Lyndoch Living video below for the full masterplan shebang.)

The Lyndoch Waterfront Living apartments, which are now five years old, are proof of where glamorous projects can stall.

Stage two of that multi-million dollar project has been put on ice after stage one failed to sell out and several apartments on the south side, facing Marfell Rd, remain empty.

Which brings me back to the deficit.

The deficit is just one part of Lyndoch’s big financial picture, but it is also a keyhole for us to peek through, to see what else is happening to our much-loved Lyndoch that has been a part of the local landscape for more than 60 years.

Here is some of what I have been able to unpick so far:

One of the reasons behind the $1.77 million deficit was the cost of “community based client services” going up by almost a third, or $1.2 million.

I emailed Ms Power and the Lyndoch board president, Kerry Nelson, last Wednesday for more detail about these services and the reason for the cost increase. I didn’t get a response.

It begs the question though, with growing demand for home-based care, why spend a fortune on a “super-clinic” and not these services?

Another reason for the deficit was a drop in the value of a Lyndoch building by $1.75 million.

I asked Ms Power and Ms Nelson more about this too, but there was no response.

Overall, Lyndoch last year had assets valued at a whopping $99.7 million – including $6.6 million in cash – and its liabilities were $36.9 million, leaving its overall position at $62.7 million.

That is a nice, fat cushion, but it is also the lowest bottom line in the past five years – in 2014, the total equity was $4 million higher at $68.9 million.

Sorry for so many figures, but it is the only way to pull this apart.

Here is one more interesting stat: the amount spent by Lyndoch each year on food for clients and residents.

In 2014, Lyndoch spent $1.021 million on food and in 2015 and 2016 it fell below the $1 million mark.

Last year, it spent $1.003 million on food, which is still less than it was five years ago in 2014. Why?

Has a contract changed? The cost of bulk groceries gone down? Are they being bought from elsewhere? Are chia seeds cheaper than homemade chicken soup?

(I was going to put these questions to Ms Power and Ms Nelson as well, but after not receiving any answers thus far, it seemed pointless.)

I will leave aside staffing figures, staff changes and staff morale for now – that is a whole separate story to come shortly – but having pored over a swag of Lyndoch financial reports and deficits, I still don’t know the answer to my simple question:

Where is the money for the $100 million masterplan coming from?

I did ask Ms Power and Ms Nelson this question, but there was no response.

Unfortunately I am going to be away on Terrier duties and unable to attend the Lyndoch AGM at 4pm next Tuesday, but perhaps someone will throw up their hand and ask this question because remember, Lyndoch belongs to us, the south-west community.

In the meantime, I am going to take a punt and say “the bank”, which means “loans”, which means “debt”.

If so, is wading into deep debt a good idea and will it vastly improve the daily lives of those in Lyndoch’s care? That, Terrier readers, is the $100 million question.

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Carol Altmann – The Terrier

Every now and then something slips out of Warrnambool City Council and we catch a glimpse of what really goes on.

This is when we learn what councillors really think, unplugged and unfiltered – this is one of those times.

The words of one councillor, former mayor Kylie Gaston, recently leaked through the solid wall of control via an email and I must admit that it made my jaw drop.

Cr Gaston didn’t expect these words to escape and she was not happy about it, but the non-confidential email she wrote to her fellow councillors (except Cr Peter Hulin) has crept through a crack and run free.

The email was sent by Cr Gaston the night before the September 2 council meeting at which councillors were still battling the raw flames of the credit card scandal and desperately trying to regain public trust.

As part of rebuilding this trust, Cr Hulin wanted the council to ask the Local Government Minister for a full review into all council spending for the past seven years, provided it wouldn’t cost ratepayers any more money.

Cr Gaston did not like this move at all and she told her fellow councillors as much, while at the same time revealing what she really thought about the whole issue.

Here is her email from 1 September in full:

“Hi everyone,

I am only writing this email to councillors, not including Peter Hulin as he is putting the motion forward.

I will be blunt.

This is a political notice of motion. Who is going to second it? Why second it when it is only going to add to the political fire, no matter what the outcome.

I think we all believe, as Thommo said, this is an iceblock not an iceberg. If the Standard reporters are working this out, why would we fuel the fire?

Let the motion lapse. Let the gallery yell at us. And let’s get on with what we are elected to do without unnecessary cost to ratepayers.

This is a blip. It will pass. We need to focus on our values and keep moving our city forward.

Kylie.

 

Did a word leap off the page for you? A tiny word that says so much: “blip”.

A blip.

We are talking here about the blatant misuse, abuse and unjustifiable spending of ratepayers’ money by senior council staff and a potential cover-up, all of which is now the subject of three inquiries.

I can’t un-see that word, “blip”, despite Cr Gaston’s explanation, which I have also published in full below.

And then there is this zinger: “let the gallery yell at us”, which is exactly what they did, and some paid the price for it.

Cr Gaston expected a rowdy meeting, but now anyone who shouts at meetings in the future could be fined.

In this email we also learn Cr Gaston looked to the Warrnambool Standard to gauge whether credit card abuse was a problem for the council.

If the sole newspaper wasn’t worried, why should councillors be?

Good grief.

And, lastly, it shows Cr Gaston, who is an experienced councillor, trying to line up councillors like ducks in a row, rather than free-thinking individuals.

So this is how it works when we aren’t watching. How fascinating.

I asked Cr Gaston a number of questions about this email and this is her response in full:

Hi Carol,

I will certainly be interested to see how you frame my response.

I believe the NOM (notice of motion) was political rather than useful and wanted to clarify that with my fellow Councillors and not make it personal with Peter Hulin.

This has certainly been a distressing and unfortunate episode at Council. Personally I am disgusted with the inappropriate use of monies and I believe most people are honest.

We need to  learn from it and move on. I did not intend the word blip to imply something small but rather in the history of Council this is an unfortunate episode which we need to deal with responsibly and I believe we had already put appropriate actions in place.

At the time of the Council meeting the Ombudsman was involved  and two weeks prior, Council had called a Special Meeting to appoint an external and independent auditor.  The scope will certainly include a review of our corporate governance and how we arrived at this point.

As it stands, the Minister is waiting the outcome of the Ombudsman report, so in fact the Notice of Motion achieved no more than what is already happening.

There is not much more to it than that.

Kind regards,

Kylie

I ran this response past Barry the Bullshite Detector. He gave it a 9/10, saying it contained more spin than a whirling dervish dance party.

Last Thursday, I asked Cr Gaston a follow-up question on why she was so confident this whole issue was an “iceblock”, after all, the official inquiries had only just begun.

Her answer arrived a few hours ago:

“In my view, the subject of further investigation had been dealt with at the special meeting and the (motion) was not going to add value.

What it was going to achieve was keeping the issue burning (so to speak) in the public domain when we had already dealt with it.

Bringing in the minister was only going to be political and, as it eventuated, the minister did indeed say it was already being investigated.

At this point I’ll wait to see if there is any further information of which we are unaware.

I don’t believe corruption is systemic at WCC and through transparent external investigation we will review our policies to ensure this does not happen again.

There are always some people who will try exploit systems for their own gain, I detest this, however, I believe most people are honest and our staff are hard working and trying to do the right thing.”

 

Nobody has ever suggested corruption is systemic at the WCC, but boy, wouldn’t you want to turn over all the rocks to see what might crawl out?

That is how to restore public confidence, bit by bit, and without a “blip” in sight.

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Carol Altmann – The Terrier

Remember the doom-and-gloom, Chicken-Little-The-Sky-Is-Falling predictions for local racing if the big trainers weren’t allowed to run horses at Levy’s Beach?

Well the Warrnambool Racing Club has just notched up a record profit – its equity has gone from $8.5 million last year to a cool $10.1 million this year.

That’s right, far from falling in a deep dark hole, things have never looked so good.

“This has truly been an exciting year for the Warrnambool Racing Club,” enthuses chairman Nick Rule in his 2018-19 report to members.

Mr Rule goes on to wax lyrical about a “remarkable financial year” and, in particular, this year’s hugely successful May Racing Carnival: “Extremely strong crowds, record betting turnover and highly competitive jumps racing were the highlights…”

Hold your horses!

Wasn’t the May Racing Carnival under threat of collapse if hundreds of racehorses a week weren’t allowed to pound up and down the dune at Levy’s?

That’s what the racing industry told us, the State Government, and also the Warrnambool City Council which, by the way, still manages to find the money to be listed as a major sponsor of the WRC.

The truth of the matter is that no racehorse training has been allowed at Levy’s beach since the end of 2016.

And the sky hasn’t fallen in. That seductive old fox, Jobson Growth, hasn’t packed up and left town.

Darren Weir kept on winning, until he was exposed in January for the cheat that he is, with more charges – enough to make your hair curl – laid yesterday.

Local trainer Jarrod McLean also kept winning – including taking out the $2 million Mackinnon Stakes last year – until he, too, has found himself facing a raft of animal cruelty and corruption charges.

WA trainer Lindsey Smith has moved in to Weir’s stables at Warrnambool and is already racking up winners.

And the Warrnambool May Race Carnival has sailed on as one of the biggest events of the year on the Victorian racing calendar.

So much success and yet not one racehorse – officially at least – has trained on Levy’s Beach in three years.

The lure and magic of the Levy’s beach and dunes has been exposed as pure spin.

 

Cr Michael Neoh has also been crunching the numbers.

He now personally believes that racehorse access to Lady Bay should be enough.

With the Weir juggernaut no longer in the picture, the number of racehorses using Lady Bay has plummeted: Cr Neoh says it is now averaging 22 a day on the beach, and 14 in the water (April to July). It was close to 100 at its peak.

Lady Bay is where we “share” our public beach and that should be enough.

As it stands, the end of November is the deadline for the racing industry to move into Levy’s, but permits still need to be issued and roads and carparks need to be graded.

Behind the scenes, the traditional owners are also keeping up their fight to be heard, as they always have to do, because their connection to the land can’t be measured in turnover and totes.

The council, having just declared a climate change emergency, could step up right now and show it really does care for the most vulnerable parts of our coast.

Which way will this go in November? I don’t know, but the arguments that propped up the need for Levy’s are collapsing as fast as Weir’s career.

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Carol Altmann – The Terrier

A REMINDER. Mayor Tony Herbert was on ABC radio yesterday (8/10/19) and pondered why the WCC whistleblowers didn’t just wander in and talk to CEO Peter Schneider about their concerns.

Let me answer that question by starting with this text message (pictured).

This message was sent to all Warrnambool City Council staff when former tourism chief David McMahon resigned in mid July.

Carol Altmann – The Terrier

Holy moly, I step away from Warrnambool for three weeks and return to find the place is on fire, with whistleblowers dropping an A-bomb right onto the Warrnambool City Council.

A string of red-hot allegations has been sent to Ratepayers Victoria after its president, Dean Hurlston, urged council staff to “whistle loudly” if they knew anything about the misuse of public money following the WCC credit card scandal.

Mr Hurlston has listed the allegations in a letter sent yesterday to WCC Mayor Tony Herbert and CEO Peter Schneider, and paints a damning picture of what was allegedly going on behind closed doors.

The allegations include cover-ups, mismanagement, fraudulent behaviour and a lack of action in response to staff concerns that stretched to the very top.

We even, allegedly, paid for private parties dressed up as “events”.

Here is the list:

Attempts over time to raise significant concerns of fraudulent spending and cover up of same;

Systematic abuse of internal controls of authorisation of spending by management;

Coercion and direction by senior management to subvert said controls and “help hide” spending;

Direction to suppliers to “alter” the contents of invoices to hide the true nature of expenditure;

The use of WCC resources for personal or family benefit;

The use of WCC assets for personal gain;

Inadequate reporting of expenditure (thousands of dollars’ worth of transactions reported as “supplies”);

“Parties” and “events” openly abusing the use of council funds (ratepayers’ monies); and

WCC not investigating or attempting to recover falsely procured items.

You might want to read that list twice, as I did, to digest it.

It sums up all of the issues that have been swirling around the WCC “credit card scandal” which, as I have said so many times, is just the tip of the iceberg.

Mr Hurlston has urged the whistleblowers to contact IBAC and the Local Government Inspectorate immediately and seek confidential and protected disclosure. (I am going to add to that and say they should also contact the Victorian Ombudsman straight away, where an inquiry is already underway. The number is 9613 6222.)

He has also urged the council to appoint an external investigator so all staff with any information about misconduct are able to speak freely and openly.

To be clear, at this stage these are allegations only, but the fact the whistleblowers have gone to RV in the first place speaks volumes.

Whistleblowers take an enormous risk and nobody throws themselves into that line of fire without weighing up the potential cost of being exposed and punished.

It comes as no surprise to me that RV says in its letter that some staff claim they have been intimidated and bullied “for trying to expose the truth”.

Yep, I know all about those tactics, and I can only imagine how dis-spiriting and terrifying it must be for those who depend on the council for their livelihood.

The WCC is still doing all it can to shut people up, including me, but it won’t work.

Why?

Because too many people want the truth.

You want the truth. The whistleblowers want the truth. Ratepayers Victoria want the truth. I want the truth.

So the council may continue to spend hours of energy trying to shut this all down, to limit the damage, to flush out the leakers, and to punish or discredit those who speak up, but it won’t work.

And our sole newspaper may prefer to write stories about desperate people stealing twiggy sticks or passion pop, but uncovering corporate crime and mismanagement is a slow, complicated and often boring process. Twiggy sticks get more clicks.

Yet the truth always rises to the top.

I call it a slow burn.

Even when a bombshell drops like today, it can take months or even years to peg out all the facts, but it will happen and it will be well worth it because that, dear terriers, is what accountability is all about.

It’s good to be back.

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