Chasing the carrot

IN typical ‘cart before the horse’ fashion the Vincent administration is proposing to sell five lots of land in order to ‘aid the City’s financial stability’ without actually saying what the potential financial problems may be.

The lots to be sold include a portion of the Barlee Street car park, and 5,760sqm of the Brentham Street Reserve which could provide 44 residences.

Yes, they want to sell off public open space!

There is no mention of what the potential costs might be of having to lease back the Barlee St car park block to enable the car park to continue.

There is no consideration of whether the Brentham Street land may have a better use as a retirement village, using the $5 million of surplus funds from the Leederville Gardens Retirement Village to fund construction.  And there is no acknowledgement of the fact that this is probably the worst time to sell land.

It’s a fire sale without a whiff of smoke. Then again, perhaps the virus crisis is just providing the necessary smoke screen.

So perhaps I could shed some light on Vincent’s financial position given the administration seems reluctant to.

As at February 29, before the virus became a thing, Vincent was $2.4 million underspent in the operating area while operating income is slightly above budget; capital works is $5.6 million underspent; and the City started the year with a $5.8 million surplus.

As well, the recent decision to delay the FOGO project for a year means $500,000 less has to be collected in rates next year.

Hardly a financial crisis and I’m sure a position many businesses would love to be in at the moment.  And perhaps that might provide a clue – the lack of business acumen.

But that is only part of the financial picture. At the end of February employee costs were 

$680,000 over budget. This follows last financial year when employee costs were $1.2 million over budget.

Some of this can be explained by the fact that the recent ‘Local Government Performance Report’ showed that Vincent has 7.2 (FTE) employees per 1,000 residents compared with 5.2 in other participating WA local governments; and that its overtime per FTE is $1,457 compared with $1,149 for other local governments.

Rather than panic and make very bad business decisions, we need the City to step back, take a deep breath, collect the information and come up with a rational plan. One which acknowledges the fact that the Federal Government is pumping large sums of money into the community which will provide many opportunities for local governments who are prepared, and the state government recently decided to spend $159 million on supporting community organisations in the community.

It will be interesting to see if the council swallows this hook, line and sinker or actually shows some courage and financial acumen.

Dudley Maier,
Highgate

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