Analysis – Carol Altmann

When is a termination a resignation or vice versa?

The Warrnambool City Council’s forthcoming financial report for 2015-16 contains an intriguing line, saying the substantial sum of between $390,000 and $399,000 was paid out to a senior officer as a result of a “termination” of their employment.

As far as the public record is concerned, nobody has been terminated from the Warrnambool City Council in the past 12 months, but there has been a number of resignations, including director of city growth Bill Millard, who left last November, and that of former head of infrastructure Peter Robertson.

Mr Robertson left the council in January this year after losing the confidence of several councillors.

According to the council documents, the total payout of between $390,000 and $399,000 was a result of a “contractual payment” that was made in addition to the unnamed senior officer’s normal entitlements.

Given the highest salary for a senior officer (not including the CEO) is between $200,000 and $210,000, this is one heck of a payout and begs the question of where that extra $100,000 has come from? Parking fees and fines? And what has been cut in the budget to accommodate it?

We will probably never know due to confidentiality clauses and a general reluctance by the Warrnambool City Council to reveal the salary arrangements of its public officers. After all, we still don’t know, officially, exactly how much CEO Bruce Anson is paid each year.

In the US, for example, it is widely accepted that if you are paid from the public purse – from the US President down – then you can expect full public scrutiny of your entitlements.

Given ratepayers are the ones footing the bill for the Warrnambool City Council, it should be exactly the same here.

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[author] [author_image timthumb=’on’]http://the-terrier.com.au/wp-content/uploads/2015/11/vault3.jpg[/author_image]Welcome to The Vault – this is where Bluestone will place all sorts of subscriber-access-only material. If you have something you would like to submit, please email us at editor@bluestonemagazine.com.au[author_info][/author_info] [/author]

By Carol Altmann

[box]Bluestone would like to acknowledge subscriber PT for funding the Freedom of Information application used for this piece.[/box]

[dropcap style=”font-size: 60px; color: #A02F2F;”] B[/dropcap]luestone subscribers will know that we cop quite a lot of flak for continuing to ask questions about the sacred cows of Warrnambool including Flagstaff Hill, Fun4Kids and the increasing secrecy and lack of transparency around how the Warrnambool City Council runs its affairs – but as long as there are huge gaps in the information, we will keep asking.

Like why is there no formal report on the 2015 Fun4Kids Festival that cost ratepayers $450,000 to run?

Bluestone has just uncovered this fact and it is staggering, irrespective of your views on Fun4Kids or whether it has picked up tourism gongs.

Anyone who has ever dealt with public funds will know that full disclosure on how that public money was spent and the results of that spending is standard procedure.

It’s called accountability.

Indeed I remember when working for the might of News Ltd that we were expected to account for every dollar we claimed when working on a story, right down to producing a receipt for a $10.50 pizza – after all, Rupert might be a very wealthy man, but he was still the boss.

Yet the Warrnambool City Council has spent almost half a million dollars of public money on an event that, until now, has always produced a full report on its budget and the festival results.

When we asked the council media manager for a copy of the 2015 Fun4Kids report, he said the key results of the festival had already been released to the media.

So, what was told to the media via the council’s media unit should be enough.

Well some journalists in Warrnambool might be happy to swallow the pre-chewed lines delivered by the council, but Bluestone is compelled to dive deeper.

So when the council told us that “about 15,000” people attended the 2015 festival and that 24% of these were from Melbourne and that they surveyed 1000 of these patrons for their views, we wanted to know more.

Can we have the full report? We asked.

Nothing was forthcoming, so we lodged a Freedom of Information asking for two things:

i) the report and/or documents prepared for the council relating to the financial results of the 2015 Fun4Kids festival

ii) the report and/or documents prepared for the council relating to the patronage, including any breakdowns or analysis on these figures.

[dropcap style=”font-size: 60px; color: #A02F2F;”] A[/dropcap]fter the obligatory 45-day wait, the council’s Freedom of Information officer Wendy Clark, who is also chief executive officer Bruce Anson’s personal assistant, came back with this jaw-dropping response:

“I have found no documents that meet the terms of your request…”

This means, we must assume, that there were no reports prepared for the council.

Ms Clark then attached two documents that, we must also assume, amount to the full documentation available on the results of Fun4Kids 2015.

One was a single budget line reference and the other was five paragraphs that included not one single figure, but plenty of motherhood statements like:

“The Fun4Kids Festival achieved a positive percentage increase in the metropolitan market, while maintaining regional attendances. This outcome is a key growth strategy for the festival moving forward.”

I don’t know about you, but whenever I read those last two words – “moving forward” – I know we are deep in the river of public relations spin and far from the shores of plain speaking.

[dropcap style=”font-size: 60px; color: #A02F2F;”] I[/dropcap]n a similar vein, you may remember the uproar that followed the sudden removal of a row of old tea tree along Pertobe Rd just before Christmas.

The trees were removed, we were told, after an arborist inspected them and found them to be unsafe due to infestation by a certain worm and cracking.

A Bluestone reader dared to ask more. In early January, she asked for a copy of the arborist’s report (or at least more detail) and whether the trees would be replaced.

She is still waiting for a reply, let alone any more information.

Such queries could normally be thrashed out  by elected councillors in general council business, but that, as we know, has been abolished and now councillors are timed for how long they talk, even though meetings were usually over within a couple of hours.

All councillors, not just some, should be demanding more, not less, transparency on behalf of ratepayers.

The fact they aren’t, and that this sort of “trust us” mentality is gripping the council, is of serious concern to anyone who remembers that it is the ratepayers who, just like Rupert, are the boss.

Find more in The Vault here…

 

Trees, transparency and the truth

Wilma Wright, FOI and more

The big shed schemozzle: we follow the money

…and more

Analysis – Carol Altmann

[dropcap style=”font-size: 60px; color: #A5CECD;”] T [/dropcap]here are two things which always go up each May: the Warrnambool City Council rates, and the council’s corporate marquee at the May Racing Carnival.

They make for a painful double.

Painful because ratepayers are again facing a 5.5% increase in their annual rate bill, following on from a 5.5% rise last year, which is more than double the inflation rate and amounts to an 11% increase in two years. (Glenelg Shire Council recently announced a 1.95% rate rise).

This means, for example, if you were paying $1700 in rates in 2013-14, you can expect to pay almost $1900 this financial year.

Cities the size of Warrnambool are not cheap to run and ratepayers collectively contribute around a third of the total $64 million operational budget, with the remainder coming from grants and user fees and charges, so every cent – and how it is spent – counts.

The council reminded us of this at its monthly council meeting (May 4) when it outlined where it had tried to make savings – by trying a different road building method, for example – and how some of the big-ticket items, like the drainage tunnel for Simpson St, were both necessary and costly.

“Times are tough”, “budgets are tight”, “things will only get harder when rates are capped”, are common mantras around the council at the moment, which is why a corporate tent at the May Racing Carnival seems like a complete waste of money and an insult to ratepayers.

Last year, the hospitality tent had a budget of around $25,000, but actually spent $17,000 on the 90 guests who attended out of 168 that were invited.

While $17,000 is small in an operational budget of $64 million, it is the perception that bites: the council’s corporate tent at the races is still considered “non negotiable” when it comes to savings.

(We asked, but have not been told, the budget or guest list for this year. Judging by the photo above, however, it may have at least been scaled back.)

It might be more palatable if the hospitality brought some tangible rewards, but based on last year’s event, the party is largely made up of council staff, councillors and members of the various boards, bodies and legal firms that the council already works with on a regular basis. In other words, it is a junket.

[dropcap style=”font-size: 60px; color: #A5CECD;”] P [/dropcap]erception also comes into play when we look at the vehicle provided to the Chief Executive Officer as part of a $288,000 annual salary package.

In the rubbery figure ways of corporate salary packages, this car is valued at $10,000, but don’t expect a car that is actually worth $10,000 – that is a reflection of the annual leasing cost.

In reality, the council provides its CEO with a sleek Hyundai Genesis that is worth around $60,000 and which sucks up 11.2 litres of fuel per 100km. Surely, in these cost-cutting times, something like a Toyota Prius would be a better choice and more environmentally friendly – if not as “corporate” – and send a message to ratepayers that everyone is doing their bit.

On the subject of rubbery figures, given the forensic nature of setting a budget and justifying where and why each dollar should be spent, it was extraordinary to learn earlier this week that some material provided to councillors has been cut and pasted from previous years.

Cr Peter Hulin made the discovery – which he shared at this month’s council meeting – after comparing what are called “service overviews” from previous budget papers to those provided in this year’s papers.

[dropcap style=”font-size: 60px; color: #A5CECD;”] T [/dropcap]hese service overviews detail how an area has performed, and how much money it needs for the coming financial year, so, for example, Aquazone will detail how many people came through its doors, how many people enrolled in learn-to-swim classes etc.

Astonishingly, Cr Hulin found that the service overviews for at least 10 council areas – including Aquazone, Flagstaff Hill, the library, Lighthouse Theatre, art gallery and even environmental health services – had the same figures appearing year after year after year.

In the case of Aquazone, for example, precisely 213,377 people went through the gates and 19,596 people enrolled in learn to swim classes for three years straight.

Let’s be clear: these are figures presented to councillors as part of official budget documents and, irrespective of how much weight they carry in final deliberations, they are simply false. How does this happen?

CEO Bruce Anson could not provide an immediate answer to the meeting, although he did say that he believed the service overview sheets were not updated “for one year”.

“I will have to take the question on notice and get back to you,” he said.

The answer is certain to be interesting and underscores why, when it comes to budgets, it’s always worth reading the fine print.

[box]People can make written submissions on the proposed budget until Wed June 5. The budget will be formally adopted at the WCC meeting on June 22. You can download the draft budget here. [/box]

[button link=”http://the-terrier.com.au/subscribe-2/” type=”icon” icon=”heart” newwindow=”yes”]Bluestone needs at least 500 subscribers in 2015. If you wish to support independent media, please click here to become one.[/button]

You can find more analysis here…

 

Why doesn’t Warrnambool have a major art prize?

W’bool City Council’s big shed shemozzle

Peter Ronald on the destruction of the 100-year-old Rowitta

Silencing councillors tightens grip on public right to know

The thinking behind A Big Life: Michael Barling & Sean Kenny

 

Opinion – Carol Altmann

The 2014 Fun4Kids festival is expected to show a record loss of up to $600,000, prompting a recommendation from Warrnambool City Council staff that it be axed in 2015.

Bluestone believes that the figures – due to be released by the council early next month – will confirm that the cost to ratepayers to subsidise the annual, eight-day festival has quadrupled in less than 10 years.

As a result, it is understood that council staff have taken a 360-degree turn from last December, when it was recommended the 14-year-old festival be funded for another three years at a cost of up to $450,000 a year, to recommending it be closed.

The total subsidy for the festival since it started in 1999 is now in excess of $6 million with, as some councillors have argued, not a lot to show for it.

As it happens, in anticipation of the 2014 figures being released, I had already spent some time crunching the numbers from Fun4Kids in 2005 – which was a good year – compared to 2013, and this is how they stacked up:

[box]Total cost of the event:

 2005: $672,223

 2013: $1,082,070 (up 60%)

Total revenue from the event:

 2005: $523,115

 2013: $614, 242 (up 17%)

Council subsidy for the event:

 2005: $156,354

 2013: $467,827 (almost tripled)[/box]

As you can see, even before the release of the 2014 figures, the public subsidy for the event has almost tripled and is about to get a whole lot worse.

 

Before I am accused of attacking an event that is designed for kids, it is worth remembering the Warrnambool City Council’s own aims when Fun4Kids first started in 1999.

At that time, the idea was for the festival to break-even or be “cost neutral” within a few years.

By 2003 – four years on – the council was told by external consultants that this was still unrealistic and that, “for the next few years at least”, it would need to spend around $100,000 a year on helping Fun4Kids to meet its expenses.

Any thoughts of even trying to break even have since been forgotten and, each year, the event has become much more expensive to run.

This might not be such an issue if Fun4Kids was drawing record crowds, but less people are showing up.

In 2005, attendances were at 32,112. By 2009, this had fallen to 24,349 and by 2013, it was down to 22,217 people, or a third less than the 2005 numbers.

It appears the numbers for 2014 will be even worse, despite ticket giveaways and drastically reduced ticket prices for locals in the final days of the event.

One of the biggest costs has been in paying performers, as the festival has sought to attract more high-profile artists: the performance costs were $69,970 in 2005 and $220,000 in 2013. Talent does not come cheap.

When I asked the council last week about the rising cost of running the event, its spokesman replied:

“The increase in the cost of Fun4Kids from 2005 is largely explained through a changed accounting methodology which included the cost of staff salaries (the time commitment of events staff into the project) and inflation.”

But internal council staffing costs of around $82,000 were included in the 2005 total and inflation has been low for the past decade: around 3 per cent.

On any measure, Fun4Kids cannot be deemed a financial success for the council, but it has previously justified its subsidy on the wider spin-offs for the city, and there is no doubt tourism operators and a few local businesses see Fun4Kids as a boost in what can be quiet months of the year.

Again, however, the wider spin-offs for Warrnambool have not grown in step with the rising cost.

According to the 2005 figures, the wider economic benefit from Fun4Kids was estimated at around $4.5 million. By 2013, this had not grown, but fallen to $3.69 million.

The more direct economic impact (using a different formula, based on actual spending), was set at $1.51 million in 2005 and had climbed to $1.94 million in 2013, which is a slight, but not significant, improvement after eight years.

Of course there are lots of immeasurables around an event such as Fun4Kids, including providing a fun event for young families, and encouraging those tourists who do attend to visit Warrnambool again.

The event has also been recognised in the past with tourism awards and, no doubt, adds to the number of “things to do” in Warrnambool during the off-season.

But it was never set up to be a loss-making exercise and I wondered when it was decided to reposition Fun4Kids from becoming “cost neutral” to heavily subsidised.

I emailed this question to the council’s media and communications manager to see if he could flush out the history.

“Council makes a decision annually on the festival, including decisions relating to its budget,” was the reply.

While the subsidies are not quite on the scale of a Melbourne Formula One Grand Prix, the question needs to be asked as to what a regional council is doing in the business of commercial event management, especially when the event is losing its lustre?

And would any other publicly funded event in Warrnambool, such as Wunta, be given as much financial leeway as Fun4Kids before it was reigned in?

Irrespective of your attitude about Fun4Kids, I believe these are legitimate questions to ask of those in charge of spending your money and more people, no doubt, will be asking the same questions when the 2014 losses officially come to light.

[box] Sources used for this piece include: WCC agenda 10.5.05; Auditor-General Victoria report, Results of Special Reviews and other Investigations, May 2005; WCC Budget 2004-05; Fun4Kids Service Review, WCC minutes 9 Dec, 2013.[/box]

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