The Beagle Editor, In light of what we read in the south around the growing concerns in your community that your Council is pursuing a $51m project that may well blow the budget once it gets underway might we offer your readers an example from Bega to provide a heads up that councillor diligence, inclusion and full comprehension of such a project is a must. just the facts …
Last week the Bega Valley Shire Residents & Ratepayers Association (BVSRRA) published an opinion piece entitled "emergency landings", which sought to highlight the numerous shortcomings it had identified in respect to the mismanagement by Bega Valley Shire Council (BVSC) of the $6.7M Merimbula Airport expansion project, including the explosion in unfunded project costs, the failure of council management to meet mandated project milestones & the turmoil created by the imminent departure of the airport’s long-standing manager.
Immediately following the publication of its piece, the President of the BVSRRA, Fraser Buchanan, was contacted by a current Councillor seeking to take issue with the contents of the piece, claiming that it was inaccurate & substantially untrue.
Now the BVSRRA is not afraid to offer its opinions on any number of issues, but it is also proud to say that it works diligently to provide factual substantiation of its claims, ironically in most instances, consisting of documents created by council or other arms of government.
In the case of its latest piece, the BVSRRA cited eight sources in support of its claims, the majority of which were council documents.
Needless to say, the BVSRRA was keen to hear what the basis of the councillor’s criticisms were, both from the point of view of checking its own work & also to satisfy its continuing desire to learn more about local government matters. On that basis, Fraser immediately offered to review the document with the councillor: which they did.
According to Fraser, it quickly became apparent that the councillor had not thoroughly read the document & certainly had not bothered to examine the substantiation provided therein.
It was clear to Fraser that the councillor was primarily concerned with the negative imputations regarding council & that his criticisms were based on that emotional reaction, rather than on any substantive facts.
Of the criticisms made by the councillor, the most strident related to the recently reported 65% blow-out in the cost of the project, from $6.7M to $11.1M in less than three years, with the councillor seeking to defend that substantial increase by claiming that the original project cost was only an “estimate” & therefore the $4.4M increase in that cost should not be a surprise. The councillor then claimed that council had not involved a Quantity Surveyor in the formulation of the project cost estimates.
The above assertion was made notwithstanding the fact that council’s general manager had already confirmed that the drivers of the cost blowout were a function of "regulatory requirements" in the form of new regulations & legislation & that this was highlighted in the piece.
Nevertheless, the councillor was insistent that the extraordinary increase in cost was not unusual when it came to such projects.
Fraser made it clear that the BVSRRA does not accept the councillor’s view. In fact, it believes that the councillor’s view displays a basic ignorance of the principles of project management, as well as an alarming lack of knowledge in respect of the project history.
The facts of the matter are that when BVSC applied to the NSW Government for $6.7M in grant funding to underwrite the Member for Bega’s grand plan to expand Merimbula Airport, it provided detailed, line by line costings of the four major project elements, down to the last dollar: hardly evidence that the figures were just “rough estimates”.
Not only were detailed costings included in BVSC’s funding application, as the NSW State Government required, that same application required council to detail the risk management strategies that it would pursue to ensure that the project deliverables were met, with one of those strategies being concerned with “Cost Control”.
The Cost Control strategy advanced by BVSC identified specific cost risks, including inaccurate budgeting (estimates), unforeseen cost increases during the design stage & cost variations arising during construction.
BVSC’s stated strategy was to ensure that adequate contingencies were included in the project costs to cover such eventualities by including a “minimum 30% contingency to cover inherent risks & a 10% contingency for contingent risk in the project cost estimates”.
Not only that, BVSC’s stated strategy was based on council obtaining independent cost estimates & contrary to the claim advanced by the councillor to Fraser, that an independent Quantity Surveyor would be retained to review & report on the adequacy of the project cost estimates.
Moreover, looking at project management principles more broadly, it is widely accepted in both the public & private sectors that a project contingency factor of between 10%-15% of the estimated project cost is acceptable to mitigate financial risk.
A 40% contingency would normally be regarded as excessive & evidence of unnecessary “padding”, while a 65% increase in the real cost speaks for itself.
Clearly the claims by the councillor were incorrect & not based on the facts of the situation.
This experience highlights once again the willingness of members of the elected council not to question or challenge what they are being told by council management, as well as the fact that they are clearly unwilling to research the facts themselves.
For its part, the BVSRRA accepts that some in the community, including some elected councillors, do not like the fact that the association continuously highlights the failure of council management & the elected council to do the job that they are paid to do.
The BVSRRA can live with that.
What the association can’t & won’t accept is situations where council deliberately seeks to mislead the community on its performance & it will continue to call-out such instances at every opportunity, whether councillors are happy about it or not.
John Richardson
Secretary/Treasurer
