Wednesday 30 November 2016

HOW TO FIND 9MILLION SMACKEROOZ IN A HURRY!?

Apparently General Manager Robert Dobrzynski is out and about selling ‘The C H Smith Deal’ as something that is financially viable. Well maybe?!

It also appears that he and Ald. Soward are doing so on the strength of the argument that “parking revenue” will fund the loan repayment ($9million) in the timeframe. So, let's unpick such a proposition a little.

This is a worrying argument in so much as it does not seem to be backed up by any realistic economic modelling that includes all the elements. Tasmania has been there before, and on the Tamar even, and look where that went and what it didn’t deliver as promised. 

The lack of such modelling might well have been the reason that Council needed move into closed council to confirm the (their?) decision to proceed with the deal Treasurer Gutwein had offered the Council. Doing this avoided the prospect of inadvertently disclosing the weaknesses etc. in open council. 

Anyway, proceed with what? On the evidence the deal has many of the hallmarks of a political stitchup negotiated in hush tones in a darkened room somewhere. Treasurer Gutwein, the General Manager and quite possibly the Mayor it seems have been doing the stitching. Or put another way, making a deal with all the characteristics of something that’s been scratched out on the back of an envelope in a car park – but there you go that's politics for you.

Given that Launceston Council has two elected chartered accountants at the table and the advantage of the expert advice of the General Manager and his staff you would think that somebody might have been able to cast a critical eye over ‘the numbers’. If they had, and it all looked good for everyone, then we would all know about it and in spectacular detail no doubt. 

Alarmingly, it seems otherwise.  The naysayers, as you would expect, say the “numbers just do not stack up” but what is most concerning is when there are yeasayers out there echoing their doubts almost in unison – and seen to be biting their bottom lip at the same time

Robert Dobrzynski clearly has a great deal invested in ‘the deal’. It’s quite apparent that he has been in the driving seat for quite some time and that the ‘elected representatives’ have been hanging about chatting amongst themselves in the antechamber waiting to be invited in. Once in, apparently they’re required to be polite – and thankful too perhaps

Perhaps we’ll all see some credible numbers ‘going forward’ if anyone is bothering to do them. However, if one joins the visible dots it is clear that it is highly unlikely that the parking revenue will service the debt, highly unlikely indeed!

Likewise, Ald Soward’s is reported as making the somewhat extravagant assertion that the parking revenue will “fill council coffers”. Clearly this is ill informed, or misinformed rhetoric, and offered up for the purposes of colour and light before the “elected 12” retired to give their tick of approval in camera – and before too much more was said

I’m taking bets that the the debt will be repaid in the age old reliable way. For those who forget what it is, the name for it “conscripted investment” or put another way, via rate demands to 30,000 ratepayers. 

Most people can do those numbers. So, my answer to the ‘wag’ who suggested that all this was “just a shell game“ is that he is probably right but there is still time to reveal the pea under the shell if there is actually one there. Otherwise, it is pay-up and shut-up you've lost – and the game goes on.

To be sure, and let there be no doubt whatsoever, this C H Smith Development Project that’s being promoted here is very very welcome.

Why? Mostly because this machination of 'the development' is the sort of thing that’s been promised for far too long and that has not been delivered. The cityscape will be enhanced and there’ll be arguments about the details as there should be. Moreover, once, and if, the ‘bureaucratic-blowins-from-elsewhere’ and the ‘compliant-rent-seekers’ are sidelined, outed and edited out of the picture, as they need to be, a positive outcome might well be worked towards – and more importantly delivered.

It's time to move forward with everyone's cards on the table, then all the player who are doing what, with whom and why can bee seen. Most of all, everyone will be crystal clear about who is paying what for what.

Ray Norman
Australian Blowin of 30 years standing

5 comments:

  1. Hapless Ratepayer30 November 2016 at 20:43

    Maybe the reason your accountants and others around the council table were not spruiking “the numbers “ is because they are a bit frightening. When you get down to it doing the maths is quite simple and it is even possible to do on the back of most regular sized envelopes.

    Let’s have a look at the broad numbers. If the car parks are going to do the job as the general manger seems be saying and in 5 years these 300 parking spots will need to deliver a $5K a day profit for the 5 years to pay the $9Mil in the required time.

    Alternatively, a flat levy of $300 per property in the municipality for 5 years would be needed. There could be a mix of the two but what mix?

    The unknowns here are what is a feasible profit wise or what is in fact acceptable politically? The poor ratepayer will need to come up with the cash either way. There are other unknowns. Why didn’t any of the aldermen, or anyone on the “operational staff” do these simple numbers?

    The really big mystery is the Deputy Mayor’s faith in the $9million loan filling “ the council’s coffers” if he has been reported correctly. However, the biggest question is probably one for the mayor. When does he plan to fess-up to his constituents and tell them everything about the numbers?

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  2. I think the planned CH Smith building etc is an excellent idea. BUT as far as the L Council's involvement in the development, a cynical person might wonder whether there is finally a realisation by them of how much impact their gifting of land for the uni relocation will have on traffic management. Perhaps the next move will be for the Federal govt to relocate Centrelink and Medicare offices to the CH Smith site. That would be sensible. Of course ratepayers will eventually have to pay for the $9 million loan in some form or other.

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  3. When commenting on the $9million inject of ratepayer funds into the Launceston community it must be said that it is apparent that everyone welcomes the development of the CH Smith site. Nonetheless very quickly the questions that come up are almost all something like “how much is this gong to cost me?”

    As has been reported elsewhere it is clear that the aldermen do not seem to have ’crunched the numbers’. Given that among the aldermanic representatives there are business people, accountants and others all of whom at election time were telling us what they would bring to their decision-making, namely, business insight and more still. That would typically translate to “doing the numbers“.

    So let’s have a look at the numbers. As a “Hapless Ratepayer” has pointed out, “if the car parks are going to do the job as the general manger seems be saying and in 5 years these 300 parking spots will need to deliver a $5K a day profit for the 5 years to pay the $9Mil in the required time.” Perhaps, these numbers are on the crude side and its not anything that either the general manager, the mayor or any of the aldermen are saying anything about while they are claiming the government loan can be funded and with some comfort.

    The obvious alternative is the idea that there be a notional levy of around $300 per rateable property in the municipality over the 5 years – or put another way $60 per year for 5 years. There’re a couple of questions flowing from this.

    Firstly, if the numbers were crunched, and they looked saleable to the constituency, and the development was needed, why did it take so long to join the dots and impose the levy anyway? Why did it take the intervention of the Minister/Treasurer? Was it because nobody could see how the ratepayers might get an ongoing dividend for their investment? Was it because the council operation was unprepared to deliver such an outcome? Is it because the council operation is antithetic towards enterprise that delivers dividends to ‘the constituency’?

    The unknowns with this $9million are what is a feasible profit wise and for what? Then comes the question about what is politically feasible or acceptable? The ratepayer, heaven forbid the “hapless ratepayer,” will need to come up with the cash in either of scenarios. It gets down to communication skills on the part of aldermen and council functionaries.

    There are so very many unknowns. Why is it that none of the aldermen, or anyone on the “operational staff” do the simple thing, do numbers and look for entrepreneurial opportunity for the benefit of their investors? I’m sorry it is ‘payers’ – rate payers – not investors andperhaps I’m asking a “wrong question.”

    If the deputy mayor has faith in this $9million cash injection ultimately “filling the council’s coffers,” he might explain how he sees the enterprise that would deliver it – that is once it was explained.

    Yet, the biggest question is probably one for the mayor as the “Hapless Ratepayer” suggests is when is he planning to put his accountant’s hat on and tell his constituency everything he knows about the numbers? Moreover can he assure his investors that they are indeed getting full value for their investment?

    There is another challenge still given that the general manager has divined that ratepayers might have come to the end of their piece of string regarding rates. How can an operation such as the one he presides over be entrepreneurial and deliver fiscal dividends sufficient enough to reduce arguably Tasmania’s highest rate demands?

    These are all big questions. In NSW, Q’LD & SA Citizens Juries and Assemblies have been used to tease out community tensions and answer such questions. The lack of information and the paucity of number crunching suggests that it is a method that citizens can engage with their elected representatives and ensure some credible consultation not to mention the meaningful discourse that these mechanisms are designed to deliver and carry ideas forward.

    Let’s give this a go for goodness sake!

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  4. Of course Robert Dobrzynski would be out and about trying to sell the CH Smith thing as 'financially viable'. He's always out and about trying to sell his wasteful plans - he seems to think he owns the city and can do what he likes. Unfortunately he can and does because the elected aldermen can't stand up to him or are too scared of their own peers. And the two chartered accountants among the elected aldermen don't have to do any sums, because Robert Dobrzynski takes care of that for them, because when he says, 'Jump!" they, and their aldermen colleagues, call out together, "How high, Sir?" rather than do their own sums. And the Mayor will kiss his general manager's bottom rather than stand up to him, check his statements or question him on behalf of ratepayers. Hang the ratepayers, ...who are they anyway, just who do they think they are, those grizzling ratepayers...Let them eat cake!
    Then, of course, there are the residents, ratepayers and taxpayers of the rest of Tasmania (and up to a 40 hour wait at the Hobart hospital! So let them eat cake too) who won't see any income from the $9 million interest-free loan to a private operator. So, for the two elected chartered accountants sums are: add up the car-parking fees, subtract the cost of maintainance and operation, subtract the loss of 5 years worth of interest on $9 million, subtract the cost of road and street works around the CH Smith site to cater for the increase of traffic in that area (on Launceston's busiest and most congested route and we remember the Launceston City Council paid for the cost of traffic lights etc in William St/Charles St and William St/St John St back when the Sea Port development happened. Good ol' Errol - he knows when he's onto a good thing, pity we can't say the same for ratepayers though). And so by the time every cost is taken into account, there won't be any income left from the car parking spaces and Robert Dobrzynski might have to talk his way out of the mess he is making in and around this city. (Does he still live in another municipality or has he become a Launceston ratepayer?)

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  5. Someone over at Tasmanian Times just responded to this thread


    The title – C H Smith Development Proposal on Council Agenda today (Nov 28)
    The URL: http://tasmaniantimes.com/index.php/weblog/comments/c-h-smith-development-proposal-on-council-agenda-nov-28/

    While its promising to hear that something is happening in Launceston, it
    is deeply concerning that:

    1) There appear no professional descriptions of financials - only
    'guesstimates' from thin air, and

    2) The loosey-goosey financials and vague descriptions for a major project
    set a dreadful example to other Council staff on how much information is
    needed to 'float' a project.

    This raises the question of 'where is the plan' for this? Surely a plan is
    required to clarify the boundaries of the project, clarify the financial
    needs and explore all of the risks that may exist. Without a plan the
    Council is setting an example to everyone about how such a project should be
    planned and carried out. And where are the requisite building approvals? Is
    there a bill of quantities and if so, where is it? If there isn't one how
    were the financials calculated?

    Is the Council signalling to the rest of us that we don't need plans
    either? And are they also signalling the lack of necessity for full building
    approvals?

    This all raises the question: "what are the General Manager's
    qualifications for his position?"

    Does he have any? Any at all?

    Posted by Richard Barton on 01/12/16 at 06:18 PM -

    END

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