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Editorial July 31st 2020

Welcome to this week’s editorial, Imagine you have received an inheritance from a relative. Enough money to build a holiday house. Your family all have a go at the designs and decide on four bedrooms so that it might accommodate an extended family some day. Sounds reasonable. So do the two bathrooms and three toilets. There are also dibs in for a TV room, a family room, a large deck, a double garage and even a pool out the back. Now imagine the project given to a Financial Manager to begin the project. The family are trusting and have told the Advisor exactly how much they have to spend. The money belongs to the family and they know they have a limit they can afford.

The Financial Advisor engages a designer to draw up the house. All the bedrooms, all the bathrooms, all the toilets, the TV room with optical cabling and even the back deck and pool. So far so good. But then the plan goes to a team of quantity surveyors who shake their heads and say that the design is well outside the budget. So back to the drawing board. The next plan has three bedrooms a bathroom and ensuite, a carport instead of double garage, the TV is now in the family room and the pool is replaced with a spa on a deck half the size. As expected the family are a bit disappointed but they realise that the changes are prudent to keep within budget. But then the Financial Advisor says “You can have exactly what you want. All you have to do is trust me.”

So they put their trust in the Advisor and agreed to give the advisor control of their finances. Now the family have agreed to go ahead with the original house plans, with all the trimmings. But when they asked the cost they were told “It’s a secret. Just trust me” “But how will we pay for the difference between our budget and the final cost?” they asked. “I will sell some of your belongings. You have assets that are “surplus to need” so I will sell them. And I will also take money from your other bank accounts and from the savings you have put aside for a rainy day. And then I might even take a out a loan for any shortfall”. “But how much will that be and what will you be selling. Will you tell us before you sell it?” “You only need to know what you need to know” said the Advisor. “What ongoing costs will we have. Is that also a secret?” “You ask too many questions. Just trust me. I have a business plan that says everything will be OK.” “Can we see the business plan please?” the family pleaded. “No, sorry, no can do… its also a secret. And if it fails you will see we have a disclaimer in small print that makes us Teflon coated. Welcome to the Mackay Park project we now all own. Until next, Lei

TRY this BLIND FREEDY TEST.... Pretend you are a councillor and a business plan is put in front to you for a new theatre. You are told: A 2010 arts study for Eurobodalla Council reported there are an estimated 6,500 residents participating in the arts in Eurobodalla Shire, excluding people who attend performances/ events/ films The study found lack of suitable spaces for arts practice in the Shire was "hindering the capacity for participation in, and development of, the arts in this community” The 2010 study reported, specifically for Batemans Bay that there was "a lack of specific purpose exhibition, performance and storage space, a lack of sufficient workshop spaces for rehearsals and visual arts, a need for a suitably designed venue for performing arts suitable for visiting performers and a need for a centrally located exhibition space. The recommendation was for three small arts hubs of clustered activity in the three major towns of Batemans Bay, Moruya and Narooma, as opposed to the creation of a single arts hub. A 150 seat performance venue, with community gallery, workshop and dance spaces in Batemans Bay was recommended. Added to that report was the formation of PerfexInc whose mission is:

"To bring to completion the construction of a centre for the performing and visual arts, to meet the current and future needs of the Batemans Bay Community" Now here is the nitty gritty - the projected $$$$$$$ ; clearly stated in the Otium Business Case that the Mayor keeps saying is THE Business Plan

All of the Councillors have read this because they adopted it. Let's look closely at the Business Plan Arts and Cultural Area Assumptions: These have been modelled from similar facilities identified in the case studies and key assumptions include: 1) The venue presents a theatre/ event season (entrepreneurial program) consisting of 12 productions over 12 months For the purpose of budget analysis the following criteria was used: • 12 productions • 55% of capacity sold for each performance at an average ticket price of $35 full and $22 concession of the total sold 30% full price and 25% concession. Below: Blind Freddy can see there is something very concerning in the blown out attendance numbers to the theatre and the glaring over-estimation of income. And this is just the tip of the iceberg that raises alarm bells that the flawed business case does not reflect the true income projections and fails to offer any clarity to the projected operation and maintenance costs. Council claim they have updates of the projected running costs of plant and machinery but they are .... SECRET. They also say they have other expected turnstyle figures .... and you guessed it ... these are also SECRET. If you were a councillor would you vote to MOVE FORWARD based on the request to "Trust Us, we have been briefed in secret sessions by staff and consultants who assure us it is all ticketty boo."

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