Carol Altmann – The Terrier

How to save $700,000 in seven days: the final instalment.

Two words: Flagstaff Hill.

I have been writing since 2014 about the steady decline of Flagstaff Hill and the picture never gets any better – it costs ratepayers at least $500,000 a year to sustain.

This year, the deficit will be higher than last year, and is expected to be at least $600,000.

The Warrnambool City Council says it must save around $700,000 a year from its budget, yet Flagstaff Hill is costing it $600,000. Am I missing something?

At least $6 million of ratepayers’ money has been used to prop up the maritime village since it began dying around 10 years ago, but it is not mentioned in any of the council’s material about rate rises and service cuts.

Instead, the WCC pushes out misleading information and media puff pieces about how well it is all going up on “the Hill”.

It isn’t going well and we shouldn’t take that personally: tourists tastes have changed and they changed a long time ago.

What we should take personally is the complete lack of any accountability for the huge amount of taxpayer and ratepayer money that has been thrown into Flagstaff Hill, all on false promises.

In 2017, the Warrnambool City Council sunk another $1 million into a $3 million taxpayer-funded revamp which included a new sound and light show, a re-styled entrance and changes to some of the exhibits.

The promised spike in tourists didn’t happen and visitor numbers have gone backward, so far backward that, this past summer, Flagstaff Hill volunteers were urged to invite family members to the sound and light show, just to help plump up the crowd.

Despite all of this, nobody has been made accountable for the decision to throw good money after bad.

Not one person within the WCC has stood up and said, sorry, we really got that wrong and this is what we plan to do about it.

Not all council-funded facilities have to make a profit, of course, because they serve a greater good, like libraries, art galleries, museums, playgrounds and recreation centres.

But Flagstaff Hill is a tourism operation that is owned and managed by the council and, as a tourism operation, it should be turning a profit, surely. It used to, but that was many years ago.

So what is the council’s plan for the future of Flagstaff Hill, other than to keep expecting ratepayers to foot the growing deficit?

Mayor Tony Herbert told the February 4 council meeting that the council was “monitoring the situation” and looking “quite stringently” at its options, which might sound comforting, but tells us nothing.

He then went on to reassure us that Flagstaff Hill still made a significant impact on the economy by encouraging overnight stays in Warrnambool.

Really? I thought people stayed overnight in Warrnambool because they were tired from the long drive down the Great Ocean Road.

And so on it goes, around and around, with no real answers and no obvious plan.

If the council presses ahead with its bid to break the rate cap of 2.5% or cut essential services, then it must explain to ratepayers how Flagstaff Hill fits into the picture.

And it surely needs to also explain the use of council credit cards for wining and dining.

And its annual expenditure on consultants.

And the more than $770,000 spent on two toilet blocks last year.

And paying $300,000 more for a Simpson St drainage tender than it needed to.

And the $450,000 it will spend on beautifying just one city roundabout this year.

And its corporate marquee at the May Race Carnival that costs at least $17,000 for the day.

Because if we have to save $700,000 a year from the budget for the next three years, this is where we need to start.

Thankyou for hanging in here.

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Carol Altmann – The Terrier

How to save $700,000 in seven days, instalment #6:

Today is another reminder rather than a revelation: for at least the past 15 years, the Warrnambool City Council has hosted a marquee at the final day of the May Racing Carnival at a total cost to ratepayers of around $225,000.

I am still waiting for a response on how much the council paid last year for this corporate networking tent, but in 2014 it spent more than $17,000.

For one day.

If we tally this up over 15 years, at an average, conservative cost of around $15,000 each time, we are suddenly up around a quarter of a million dollars.

This money has gone into hiring the marquee, the catering staff, the chairs, tables, decorations, hors d’oeuvres, alcoholic and non-alcoholic drinks, member’s reserve entry tickets and wristbands.

Ratepayers even paid for the race books.

I first wrote about this marquee in 2014, when it emerged the guest list was largely made up of members of council and their partners, local MPs, local executives, representatives from the council’s Melbourne law firm, Maddock’s, a couple of associates of then-councillor Brian Kelson, and current Mayor Tony Herbert, who was invited as the then chair of Commerce Warrnambool.

So much for it being a networking opportunity.

Networking is supposed to involve connecting with people you don’t already know.

Cr Peter Hulin has long challenged the justification for the marquee, but it remains firmly in place.

Indeed when Cr Hulin again questioned its relevance in 2015, then Cr Jacinta Ermacora said the marquee was an important part of the council “supporting the local racing industry”.

This made thoroughbred horse racing sound like some form of charity rather than part of a multi-billion dollar enterprise based on gambling.

I am pretty sure the council could find far more needy causes who are out turning sausages in the carpark at Bunnings each Saturday.

And this is the bigger problem, because while $17,000 a year is not much in an $89 million council budget, it is still a lot of money to a majority of people: this is what the council loses sight of.

It can drop $17k of our money on one afternoon’s entertainment without batting an eyelid or producing one shred of evidence as to its value.

Because it is all about “networking”.

In this case, however, the networking is not working, especially now the council is asking ratepayers to either pay more in rates, above the 2.5% State Government cap, or face service cuts.

The final instalment tomorrow.

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Carol Altmann – The Terrier

How to save $700,000 in seven days, instalment #5:

On the same night Warrnambool City councillors decided to explore breaking the rate cap – on December 3 last year – they also agreed to spend $450,000 to spruce up a single city roundabout.

That’s almost half a million dollars to beautify just one roundabout – at the corner of Kepler and Koroit streets – and they did it without a hint of irony.

Not one of the five councillors who supported potentially raising rates above 2.5% (Cr Peter Hulin voted against and Cr David Owen was absent) seemed concerned that they expect ratepayers to choose between paying more for services, or having services cut, while they plunge money into non-essential projects.

Like dressing up a roundabout.

The council will draw $450,000 from the city parking fund – putting that fund into deficit – to upgrade the roundabout by the end of this year.

This is the busy roundabout outside the Warrnambool Hotel and Ishka etc, which is no doubt unfriendly to pedestrians in its current state.

But improving pedestrian safety (more about that in a moment) and a $450,000 makeover are two separate issues here.

Mayor Tony Herbert was particularly enthusiastic about the improvements because, he says, Kepler St is “the next most important” CBD street after Liebig St.

“It doesn’t matter who occupies businesses there, but I believe that is the next street to get the work done,” he told the meeting.

As it happens, Mr Herbert does occupy a business there, with his office smack bang in the middle of Kepler St, in the Wyton’s cafe precinct.

Until last year, this intersection wasn’t even part of the city renewal plan, but it is now.

Now it will have bluestone paving wrapped around each corner foothpath and central lighting poles that allow for banners and decorations. (See the plan here).

The council calls this “high end aesthetic treatment” and there is no doubt it will be swish compared to boring old bitumen and basic lighting, but is it really necessary in a cost-cutting environment?

It’s a bit like fixing the electrical wiring in your house – for safety – and digging into your savings to replace all the light shades at the same time.

Because what started the momentum for this makeover was money from the Transport Accident Commission (TAC) to make the CBD safer for pedestrians.

The TAC will fund almost half of a $1.67 million upgrade to three CBD intersections, including the Kepler St/Koroit St roundabout.

The council will use that money to replicate those painful zebra crossings that are now in Liebig St and which make drivers give way to pedestrians as they enter and exit a roundabout.

(VicRoads, by the way, say this style of zebra crossing can work, but they also create a greater potential for rear-end accidents. But I digress…)

Having secured money to build the crossings, the council decided to go one step further.

It rummaged around behind the couch and found a neat $450,000 to throw into beautifying the Kepler St/Koroit St roundabout.

Importantly, such a makeover would also create a distraction from the fact the council has run out of money for Stage 3 of the CBD renewal along Koroit St, which is not surprising given the other two stages blew out by more than $3 million.

So from not being part of the CBD renewal, the Kepler/Koroit intersection now has star billing.

In fact it will probably be all that happens along Koroit St between Kepler and Liebig St for some time.

Even so, can new pavers and lamps really be a priority when the council says it must save $700,000 a year from its budget?

It’s too late to ask that question because the beautification is going ahead.

Your input, via the council’s online consultation that opened last Friday, is to decide what else you might like to see added to the works and when you would prefer the 12-week project to start.

There is no option to say, um, we don’t want that style of fender-bender zebra crossing and, by the way, can we also save the $450,000 for something more important?

There is actually no mention of the $450,000 cost of the “high end aesthetic treatment”.

This figure remained buried inside the council agenda and minutes: until now.

More tomorrow.

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Carol Altmann – The Terrier

How to save $700,000 in seven days, instalment #4:

Today’s instalment is not a revelation, but a reminder.

It’s a reminder of a story I ran last November where developer and former councillor Graeme Rodger revealed the Warrnambool City Council could have saved at least $328,000 on a tender for part of the Simpson St drainage and tunnel project.

That is another $328,000 that could have been shaved and saved off council’s spending in 2018-19.

To recap: Mr Rodger’s company, Rodger Constructions, put in two tenders for the multi-million dollar job last August: one “conforming” and one “non-conforming” which basically means one that stuck to the letter of the tender, and one that suggested a cheaper option.

The council went on to award the tender to another company for a higher price than both options put forward by Rodger Constructions.

The council said the bid by Rodger Constructions, which was short-listed, had a number of flaws.

Mr Rodger said all of these could have been worked out with a simple, face-to-face meeting that was never offered.

The council said such a meeting was optional and it chose not to take up this option for a number of reasons.

You can revisit the full, blow-by-blow detail in the story here.

The end result, however, is the job will cost ratepayers $328,000 more than it could have.

If the council had chosen the non-conforming option, it could have saved $424,630.

So here we are four days into the seven-day search for savings and I think we are close to the $700,000 mark already by taking a closer look at this tender, the cost of the two new toilet blocks, the cost of consultants and the spending on council corporate credit cards.

Nip, tuck, shave, save and suddenly there is no need to cut essential services or push rates up above the 2.5% cap.

But we still have three days to go.

I will be back on Monday – we can all catch our breath for a bit – for the first of the final three instalments.

Thanks for hanging in here.

If you would like to see The Terrier keep digging up, sniffing out and chewing on local issues, please make a small contribution below.

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Carol Altmann – The Terrier

How to save $700,000 in seven days, instalment #3:

Take a good, close look at the photograph at the top of this page, because you – if you are a Warrnambool City Council ratepayer – ultimately paid for this hospitality.

It is a snapshot of one invoice from a council delegation to a Victorian tourism conference held at the RACV Cape Schanck resort last July, which I wrote about last month.

Seven council representatives attended that two-day conference, at a total cost of around $10,000.

My first thought when I saw this snapshot was how do you spend several hundred dollars on beverages in one sitting unless you are buying drinks for a lot of people, which may be the case, or drinking gallons of soft drink or juice, which I doubt, or buying expensive drinks in the first place? 

Regardless of the answer, it is your rates at work.

This sort of spending came just months before the council announced it wanted your opinion on whether it should cut services or raise rates by breaking the rate cap just three years after it was applied by the State Government.

I am still working on a much deeper investigation into council credit card usage, which I started last September, and it will be some time yet before I can publish anything in detail.

In the meantime, however, I can tell you how many corporate credit cards the council has in use: 81.

81.

I don’t know about you, but I was stunned to learn that there are 81 active credit cards in use among council staff. It seems a lot.

No cards are issued to the Mayor or councillors.

How on earth does the council keep track of all the transactions on 81 credit cards? Who has one and what are the annual spending limits for each?

Let me take those questions separately.

There is a system in place to prevent outright fraud – more on that in a minute – but I wondered about the items being bought in the first place.

Who approves the initial spending, such as the hundreds of dollars of drinks toted up over dinners at Cape Schanck?

Is there more of that sort of spending and for what purpose? (I lodged a Freedom of Information application in October to help answer these questions. It is still being processed – FOI can be gruelling, but thanks to those who donated to The Terrier Tip Jar, I can see it through.)

The council doesn’t have a credit card policy, but it does have a procurement policy which sets out how financial transactions are handled.

According to the council (you can read the full statement in response to my initial questions here), this policy ensures there are a series of checks and balances in place.

These include the staff member providing a tax invoice or a statutory declaration for each credit card purchase.

These are approved by a manager/supervisor, after which it is sent further up the chain to the card administrator, in the council’s Financial Services team, who makes sure it fits within the rules.

The system, which apparently saves time compared to the purchase order/invoice system which is still used for other goods, has been reviewed by the Audit and Risk Committee and, the council says, found to be working just fine.

But is it? I am hoping to answer that more fully down the track.

The second half of this investigation is working out which staff positions have corporate credit cards and what the credit limits are for each.

I thought this was a super simple question, especially when Northern Grampians Shire, for example, puts this information on its website for all to see.

But no.

Council spokesman Nick Higgins said today that the release of such information could lead to credit card fraud (such as that outlined in the link here).

I fail to see how you knowing that I have a $5000 limit on my credit card could lead to fraud, especially if you don’t have my card number, expiry, CCV, pin, signature or any other details.

Corporate credit card usage and expenditure isn’t included in the council’s survey on its push to break the rate cap above 2.5%: it should be.

More tomorrow.

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