All but Rob Pollock voted that Council receive and note the Bay Pavilions Financial Performance Review, Final Report, 27 June 2023.
The Final report has been placed on Council’s website and is available to the community
The KPMG Review report outlines seven (7) Key Findings, supported by an evidence based sub-set of points under each Finding in relation to financial, governance and management issues.
The seven Key Findings were:
1. Bay Pavilions’ operating loss for the 9 months to 31 March 2023 was $1.2m per reconstructed actual financial results from Council compared to a baseline financial model forecast loss of $563K. Financial performance was weaker than anticipated due to revenue targets not being met, and higher than forecast expenditure in the first 9 months of operations.
2. Bay Pavilions was forecast to operate at both an operating and total loss in all of the examined documents since the original financial model and business case was prepared in 2017. Council was presented forecast depreciation charges in March 2020 and July 2021.
3. Council had considered the operating loss (excluding depreciation) in February 2020, based on the documents provided for this review. No explicit consideration of how to fund the ongoing operating losses has been noted in any meeting minutes.
4. No Council briefings sighted as part of this review included the full OLG assessment letter from July 2020. In this letter, the OLG suggested Council should ensure it is satisfied with the community demand for the facility, and its ability to subsidise ongoing losses.
5. The management agreement with the third-party operator of Bay Pavilions does not align with key recommendations relating to the management and operating model endorsed by Council.
6. No documentation sighted as part of this review demonstrates critical review of financial model assumptions by Council.
7. Externally prepared financial models indicate the facility will continue to operate at both operating and total losses over the 10 years forecast period, with many costs being fixed in nature. Council must identify options to minimise the ongoing losses and consider reprioritising or eliminating projects in its long-term financial planning in order to continue to fund the facility.
Opening discussion Councillor Pollock decided the best way for him to taint the report that put much of the blame for the failures on the past term of councillors was to attack it.
And attack it he did, offering up firstly his general comment about the KPMG report was that the Mayoral report called for a thorough review of operations saying "this report hasn't covered that".
He then went on to list the inaccuracies of the report.
Of specific interest was that he said "The inaccuracies that are covered in this report include "that no evidence was provided showing the council was provided with a copy of the OLG assessment which is factually incorrect".
The OLG letter
He goes on to say "it was sent to all councillors in the Councillor Newsletter. It was also discussed at length in the briefing. I distinctly recall my saying at the briefing that the comments by the OLG were insulting considering the detailed efforts undertaken by the council, especially in regard to community need. Its a factually incorrect statement to say that council had not satisfied community demand for the facility, Council had undertaken in depth community consultation"
Possibly the reason he said this was because findings stated in the report to Council said "No Council briefings sighted as part of this review included the full OLG assessment letter from July 2020. In this letter, the OLG suggested Council should ensure it is satisfied with the community demand for the facility, and its ability to subsidise ongoing losses.
Unfortunately for Councillor Pollock he wasn't aware that I had lodged an Informal GIPA for the OLG’s assessment referred to at the 28 July 2020 meeting as well as asking the then General Manager a very specific question.
Below is the question and the General Manager's reply to The Beagle:
With no notes taken at briefings I am happy to trust the response from the General Manager, as she was the only person in the organisation who held a copy of the OLG letter. Councillor Pollock said today that the KPMG statement "that no evidence was provided showing the council was provided with a copy of the OLG assessment which is factually incorrect". Really Councilor? Really. How was it you discussed at length, with a vehemence, the contents of the letter with your peers at a briefing given the General Manager is clear in saying none of you saw it before. Further reading: Did the General Manager breach the Local Government ACT. And who shall decide? He then asked during the meeting today "does anyone think that Council would have received grants of $51m from the state and federal governments to build a facility that council had not demonstrated genuine community need". In saying this the councillor appears to have forgotten that the community had demonstrated a genuine community need for a hydrotherapy pool. Yes, there was a wish put forward by the Perfex group for an exhibition space.
At the time of initial "consultation" the community had no idea the plan was to remove their 50m pool and replace it with a 25m pool. Councillor Pollock appears to have forgotten that the requests for letters of support from schools and sporting groups failed to advise they were supporting a 25m pool. When it was revealed the 50m pool would be removed many withdrew their letters of support. He said drama groups had lobbied. What drama groups?
Yes, "Council had undertaken in depth community consultation" and most of it was rhetoric.
