The Pav. Just what are they not telling us?

Presentation to Eurobodalla Council Public Forum - TUESDAY 22 NOVEMBER 2022 GMR22/114 Quarterly Budget Review for period ending 30 September 2022 by Lei Parker Councillors, When I came to Australia some forty seven years ago I was warned about Australians. “Listen carefully to what they don’t say and read between the lines of what they don’t write, and ask yourself why?”

Today you have before you the September Quarterly Budget Review Statement for YTD Period Ending September 2022. In reading through it I asked myself “What isn’t revealed here. What is hiding between the lines that they don’t want to tell me”. A Quarterly Budget Review Statement is a complex thing. For most of us it is unfathomable. I imagine that it is also unfathomable for most of you. But today you will be asked THAT the budget review report for the quarter ended 30 September 2022 be received and noted. And that you adopt the favourable variation to the Income Statement after capital revenue of $15.36 million and unfavourable variation to the Consolidated Fund Flow Statement of $9.06 million. The only way you can adopt this recommendation is to have a thorough understanding of what you are being told and what you are not being told. I accept that the staff brief you on such matters and you may already be comfortable with the recommendation. To raise your hand without understanding what you are voting on would be most disappointing. I must advise you that while you might accept the Quarterly Review as it is, my concerns remain around what isn’t being reported on. For the sake of my presentation, I will focus on the Bay Pavilion facility.

When the community raised concerns about the financial viability of this facility we were assured by one of the Councillors that “the Pav was the most examined ,and re-examined project he had encountered in more than 3 decades on the ESC. “ That was meant to deliver a message that all was in order and that we needed to trust in our Councillors when it came to concerns of financial viability. Anyone who pressed for more information was considered vexatious and negative to the project. Once again the Usual Subjects were dismissed.

There is a mention of the Bay Pavilion in the September Quarterly Budget Review attachment. In that attachment I discovered that the Bay Pavilion facility is not where one might expect to find it being a Recreational facility. Instead it is listed under Facilities Management. For a $70 million facility that has an expected depreciation in the order of $1.6 million per year and a projected nett loss approaching $3 million per year I was hoping that the Bay Pavilions might have its own open and transparent reporting line in the Quarterly Review.

Like many I was hoping to see its income, its expenditures and its depreciation.

But there was nothing. If there was income then it would have been absorbed in Consolidated income, as too its expenditures including contracts, labour costs, running costs and depreciation.

All the September Quarter reveals is that the facility had reduced revenue in the last quarter and that there was an increased electricity expense. I also learnt that there was revised funding from Crown Reserve funding but there was no figure.

Basically the September Quarter reveals nothing about the Bay Pavilions. Is it running at a loss. If so, to what extent?

So what aren’t we being told about the Bay Pavilions? And why not?

To say that the way the subterfuge around the finances of the facility and how it was dealt over the past five years with was an embarrassment is an understatement. In fact Council did all it could to suppress information, obfuscate figures and exclude scrutiny.

What was gleaned was only achieved under Freedom of Information requests that were systematically refused until higher authorities intervened.

So the community have been left to piece together what little they could.

What we now understand is that:

The facility is under a management contract. That contract guarantees an annual fee irrespective of turnstyle performance.

All income from the facility goes into a bank account that pays for overheads of running costs. If the total cost exceeds that income then Council pays the difference. If the running cost is less than the income then that is returned as an income to Council.

If, as it is understood, this is the management agreement, then there is little onus on the management contractor to look to minimising costs or, to that matter, maximising profits.

It is understood that the electricity cost blowout mentioned in the September Quarterly review is in the order of $265,423 or more.

Unless Council is open and transparent about the Bay Pavilions financials the community will never know whether the facility is able to raise sufficient revenue to cover the operational cost (including depreciation which measures the wear and tear of Council assets) of delivering services to the community before considering its capital revenue.

The days of not talking about the elephant in the room are over. Either you continue, as your predecessors did in fiscal subterfuge, ensuring that the real costs of the Bay Pavilions are not revealed to the public, or you step up, demand that the Bay Pavilions Facility has its own reporting line of income and expenditures including depreciation, so that the community can have faith and trust that the toxic ways of the past are finally over.

While it is appreciated that the management contract details and the contract figure remain ‘commercial in confidence’ the community should at least be advised of the method of measurability of performance and the base details around Council’s commitments to meeting costs blowouts attributed to management decisions, management actions (or inactions) and real income.

A turnstyle figure of how many went to the gym, the hydro pool, the pool, the meeting rooms, the theatre would give evidence of utilisation. It need not reveal income, yet given that the management contractor is on a fixed contract and all income is Councils then why can’t the total income per section be known. As too the total electricity costs and most certainly the sum of overheads and depreciation.

Unless you, the councillors, demand otherwise, the Bay Pavilions income and expenditure will not come under public scrutiny. Nor will the performance of the management contractor.

As I said at the outset , what is not said and not written is where you find the truth of the matter.

The last period of councillors, either by way of laziness, indifference, fear, complicity, gullibility or otherwise, saw that the Bay Pavilions performance and fiscal accountability remained in the shadows. It will be interesting to see what this term of councillors do, given that we have a new General Manager who might also like to see the openness and transparency that was promised during your collective September 2021 electioneering campaigns actually delivered. READ FULL nine page presentation HERE