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Buckley signs off

21/2/2019

13 Comments

 
Picture
At his first meeting with a hostile new council in 2016, Paul Buckley confronted rumours of personal corruption, affairs and big staff bonuses. The departing council CEO recalls some challenging times in an extended interview with Post editor Catherine Watson.

Catherine Watson: How soon after you arrived in Bass Coast did you become aware that there was so much negativity towards the council?
 
Paul Buckley: Pretty quickly. I think in the first week I gave my reflections to the councillors of the day in which I said there seemed to be a lot of angst in the community about a whole range of things. Part of that was because we’d just dealt with the dogs on beaches issue. That manifested itself in people being able to express a range of frustrations. As time went on I understood why that might have been the case.
 
CW: Did that all relate back to the dogs on beaches? [In late 2013 the council introduced a trial summertime ban on dogs on Inverloch beaches.]
 
PB: I think more broadly, and I think is what the council had told me at my appointment, was the need to better engage and communicate with the community and a broad range of stakeholders. There were clearly some gaps in that space. There had been a plan to develop a communications strategy for a little while. That was a priority.
 
CW: Was that an attempt to sidestep a relentlessly negative local media?
 
PB: I think that was certainly part of it. I was really surprised by the attitude of a couple of the media outlets when I arrived. Clearly there had been an ongoing campaign of negativity against the council. My perception was that it didn’t matter what the council did, they were going to find something to criticise. That took me by surprise, just how negative it was.
 
CW: I know you came to Bass Coast from a dysfunctional council [Latrobe City Council] …
 
PB: Yes, and the media was more balanced, I think. The relationship they had with the council, and the councillors had with the media in the Latrobe Valley, was that there would never be a story run without an opportunity for us to comment or put forward the facts. If we deserved to be criticised we deserved to be criticised. But at least we had the opportunity to respond. I found that different here.
 
CW: I’m sure there was many a Tuesday when you picked up the local papers and shuddered. Can you remember any?
 
PB: [Laughs.] Yes I can. A lot about recruitment, a lot of rumours and innuendo floating around. Without giving us the opportunity to respond.

But I’ve been around for a little while, been a CEO for nearly 15 years, so it didn’t distract me from my plan. I operate on three key principles around organisational culture. The first is about performance management. In simple terms, deliver what you promise when you promise it. Second about financials. And the third and most important is really about developing a relationship and understanding and appreciating the stakeholders.
 
For me it was about staying focused on doing that and the media can do what they like. I’ll respond if I get an opportunity to respond but wherever I’m out and about, whether it’s at Rotary or U3A or whatever, the message would be the same. This is what the plan is, this is what the priorities are, this is what the council said they want me to do. And just stick to it.
 
CW: In the latest council satisfaction survey, which is not as high as some other councils, adults aged 18-34 were a lot more favourable than older people. I wonder if that’s because they’re not getting all their information from the local newspapers?
 
PB: There’s a bit of that. I also think our team has done a magnificent job of engaging with young people. That contributes to it. Also the investment we’ve seen in recreation infrastructure, but also things like Bass Valley Children’s Centre, the highball facility here in Wonthaggi and the physical improvement to a whole range of facilities across the shire, has contributed to a positive outlook in that age group.
 
There will always be a group that thinks things were better in the past. But I think young people are more open to what’s going on today, what does our future look like. As a broader team, and in our community services space, we’ve been a lot better at engaging that age group.
 
CW: The ‘Jobs for mates’ accusation – with hindsight, would you have done it differently? [Paul Buckley was accused of recruiting his management team from former colleagues on Latrobe Council.]
 
PB: No! We went through a really rigorous recruitment selection process with independents involved in that. I was very comfortable that the people we appointed were the best people for the job. Second, I had to bring in a team of people that I could trust and that could subscribe to the type of culture that was going to be developed in the organisation. I don’t walk away from that at all.
 
When I first responded to that I think there’d been something like 60 or 70 recruitments across a two-year period and I think there were eight that had a connection to Latrobe.
 
If I look at our performance over the past five years, while we’ve still got some work to do, with some cohorts in particular, every indicator in that survey has improved over the past five years. Every indicator is trending in the right direction. Are they as high as we’d like them to be? No. Will we ever get there? Who knows.
 
But if I look at the organisation’s performance, particularly in those priority tasks the council wants to deliver, we’re about 99 per cent there.
 
CW: You’re hardly likely to bring in incompetent people ...
 
PB: A few of those people, and I don’t want to be arrogant about this, we were lucky to get them. And I think that’s been shown by their performance over the past five years. Is there still work to do? Of course there is, and I’m sure that Ali [new CEO Ali Wastie] will add value to that as well.
 
I was reflecting over the past couple of weeks about the presentation I made to the council that appointed me and the things they’d identified as key priorities and we’ve delivered on all of them.
 
From a financial perspective we had less than 10 per cent of rate revenue going to capital projects when I arrived; we’re now greater than 20 per cent. Our planning performance: we had less than 35 per cent of decisions delivered in less than 60 days, we now have 80-plus. The community engagement strategy is in place, there’s a long-term financial plan, so all of those fundamentals to the business are now in place and I’m proud of that.
 
CW: Did you know straight away from looking at the books where the problems were?
 
PB: Yes I did. I arrived in February 2014 and the budget was almost completed. The first thing I noticed was that less than 10 per cent of the budget was going into the capital program. We changed that within the first few months. That was a fair challenge for the organisation.
 
But fundamentally that’s still our biggest challenge. We’re one of the lowest rating councils in the state. We’re $300 or $400 per property lower than South Gippsland and Baw Baw. At 30,000 properties that converts to $9-10 million.
 
CW: Most ratepayers will not credit that Bass Coast is a low rating council ...
 
PB: No. All we can do is keep presenting the facts. Because of our large non-resident population, we get severely disadvantaged in the Commonwealth Grants Commission. We get $1.2 million less than South Gippsland. Combine that with low rating. We have very serious financial constraints. The current formula has an inequity in it. For example the formula in one expenditure category includes street lighting. It presumes that because we have a lower permanent population than others our street lighting requirements are less. Well the street lights don’t go out because 46 per cent of the properties aren’t occupied. We have a really serious revenue challenge.
 
Whatever indicator people use on the expenditure side, we demonstrate that we’re more efficient than other councils in our cohort. People often compare our rate levels to Melbourne levels. The revenue that a council like Port Phillip gets from parking is more than our total rate revenue. They don’t need to collect as much in rates. We don’t have that. Seventy per cent of our revenue comes from rates. Compare us to our neighbours. By any of those measures we sit very well.
 
CW: You’ve dealt with two councils at Bass Coast and they’ve both been quite functional and united.
 
PB: I’ve had five of the most rewarding, enjoyable years of my career here. My original plan was to come for four years and finish 12 months ago but I’ve had a ball. The two councils have been really good to work with. I said to my wife the August before last, “I’m going to do the last 12 months of my contract because I’m actually enjoying it.” I’m really proud of the way the organisation has responded to the plan and message. The people we’ve brought into the organisation have been fantastic. We’ve gone from four general managers and 17 managers to three general managers and 12 managers. Part of the efficiency drive started at the top.
 
While it’s been tough, the willingness to take on change has been fantastic. It relies on getting the culture right. Have we got the right people in the right places? Some people choose not to be part of it and move on, and that’s okay. But it’s been a significant change.


CW: Having said you worked with two supportive councils, your second council [elected in 2016] was largely elected on a determination to get rid of you. Did you think you would last with the new council?
 
PB: I wasn’t sure but – I don’t want to sound arrogant – I was really confident that once the councillors understood how we were performing and what we’d achieved, and who we were, then I thought the relationship would be okay.
 
I went in a bit proactively. I invited them to ask me anything they liked. I had a list of rumours that they would have heard. So I responded to all of those. I was pleased to have the opportunity to quash the rumours. Some of them were pretty disappointing and some could be hurtful personally. So I confronted them head on. I said this is what I’ve heard, I’m sure you’ve heard the same rumours. Here’s the truth.
 
There was some really silly stuff. There was a rumour floating around that half the staff were on bonus clauses. I said to the councillors “You’ll be interested to know that no one in this organisation has a bonus clause. Nor do we pay any bonuses, including to me.” A number of them were very shocked about that because the rumours had been floating about huge bonuses.
 
There were reports of me being investigated by IBAC [the Independent Broad-based Anti-corruption Commission], the Ombudsman. All completely untrue. I’d never been interviewed. Because I knew where those rumours were coming from, it was pretty easy to dispel them. If you believed the rumours, I’d had affairs all over the place. I said “Thank you for the compliment but it’s not true.”
 
Within four to six months things had turned around. Then I think the commitment of the councillors, and the capacity to work in partnership with the officers to develop a council plan, put the relationship in a strong position. Once the councillors understood that we were here to implement their plan, we got on with it.
 
The real compliment I would give to this council and the previous one, their council plans are really clear. This current one in particular. We’ve spoken to the community, we’ve heard what they’ve said, here are our priorities for the next four years. From a CEO’s perspective, that makes life really easy. This is what we’ve been asked to do, let’s get on with it.
 
There are always the challenges around the financial constraints, because we can’t do everything that we’d love to do. But you have those conversations within the budget process. Okay, what are our priorities? And get on with it.
 
CW: There was one councillor you never managed to convince. How difficult has it been to deal with Cr Les Larke, especially given the prominence the local media gives to his views? [Cr Larke argues that the council’s accounting practices conceal a $30 million-plus operating deficit.]
 
PB: I think his views are given too much prominence, and I’ve said that to Les. I think it’s a shame that the media gives time and attention to that when clearly the view of not just me, not just our chief financial officer and our chartered accountants, but our auditors, the audit committee, the auditor general and everybody else says the finances of this place are appropriately reported. There is still this campaign to change the rules.
 
CW: How much time has it wasted?
 
PB: Significant amounts. Councillor and staff time.  It would be hundreds of hours. But it is what it is. He’s a councillor, he’s entitled to ask these questions and we respond to them appropriately and professionally. And deliver that information and have it tested by the relevant authorities.
 
CW: How have you around turned the finances?
 
PB: I have a background in finance. Financial management is a key plank. Early on I recognised we needed to restructure the finances to invest more into the capital plan. We weren’t spending enough on looking after the assets we currently have, let alone the new ones we want to build. We’re doing that now. We’ve freed a lot of money from operations and put that into works.

CW: You also seem to know who to speak to to get grants.
 
PB: There’s a bit of that but it’s not so much who to speak to but having your own money to put on the table. I remember a mayor – and I won’t name them – having a conversation with the deputy premier of Victoria at a function, and the mayor of the day said “The state government doesn’t put enough money into Bass Coast. Why don’t you invest as much as you should?” And the deputy premier of the day said “Show me a funding application that we’ve knocked back.” Because we didn’t have the money to put on the table we couldn’t apply for grants.

Take the highball courts for example. That’s a $6.5 million project. If we didn’t have our $1.5-2 million to put onto the table it wouldn’t happen. It’s not a matter of favouritism. Bass Valley Children’s Centre was the same. The Cape Paterson Lifesaving Club. Cowes Jetty Triangle – if we hadn’t had a couple of million dollars to attract the investment, it wouldn’t happen. The relationships have to be good and you have to understand the policy positions and funding programs, and make sure you can target your projects to those programs, but if we didn’t have our money it wouldn’t happen. It’s about being prepared to be a financial partner.
 
CW: According to the satisfaction survey, Phillip Island people are significantly less satisfied than others in the shire. Do you see that changing?
 
PB: When I first arrived, the message was that everything gets spent in Wonthaggi, nothing gets spent on the island. The reality is that nothing substantial had been spent anywhere for a long time. And that gets back to restructuring the finances so money gets put on the table.
 
There’ll always be some who want to go back to the good old days of Phillip Island as a stand-alone shire but now they can see the priority projects are happening – the health hub’s operational, the hospital was announced as part of the election campaign. Planning has started for the roundabout at Back Beach Road, $60 million has been spent on the penguin parade, a new junior secondary college campus has been announced. They can see things are happening.
 
The aquatic centre now is further progressed in its planning. We’ve now got a site. There’s money in the long term plan to deliver two pools: an upgrade at Wonthaggi and a new one at Phillip Island. We’re never going to be able to deliver a $35 million project on our own. We’ll probably need 50 per cent from other sources. There’s a real opportunity through election campaigns to get that sort of funding.

CW: We got lucky with Bass becoming a marginal seat.
 
PB: No question about that. That’s really been the icing on the cake. You think about the hospital, the George Bass walk. Projects that don’t require a council contribution.
 
The community now, and the council, really need to make the most of that opportunity. It’s not just that the seat’s marginal but that the community now almost speaks with one voice about what the priorities are. if you’ve got a community coming to you and saying the secondary college is our priority, the hospital, climate change, erosion, etc, planning to make sure we look after our environment … these are our priorities and we speak with one voice.  Then it’s easy for the local member, or candidate, or minister or premier to support that.
 
CW: What should Bass Coast push for in the federal election?

PB: I would be really pleased if we got a regional study hub which gave our kids and others access to university courses. If we look at the 2017 data for Bass Coast and South Gippsland, there were hundreds of VCE students that got really good ATAR scores, got offered their first preferences, and neither took up the offer nor deferred.  All that good work wasted. It was just too hard.
 
What if we could establish a regional study hub here in Wonthaggi? Would they then take up the opportunity for university study at a local level? Country University Study, who we’re now partnering with, operate about eight regional study hubs throughout NSW. It’s a really good model. They’re essentially mini campuses that offer courses from whatever university in Australia. One in East Gippsland was funded through the most recent federal program. We visited the first one they set up, in Cooma, population 7000-8000.  
 
If the feds came and said we’ll give you $2 million for a regional study hub that would be a really good outcome.
 
The rest of the stuff with the feds is around climate change and the impact on coasts. As a municipality that relies on the environment – and where the environment is so special – we really need a collaborative approach and national response.
 
CW: Our previous CEO [Alan Bawden] stayed for 20 years. You’ve made it just one term. Is there a benefit to regularly changing the top management?
 
PB: Hindsight’s a magnificent thing. Alan Bawden did some really good things here. A lot of the work around things like the education precinct, that long-term strategic thinking. The majority of people in the place were good at what they did and passionate about doing a good job. Having now been in a CEO role for 15 years, my advice would be eight-10 years is probably enough. Two contracts. If you can’t achieve what you want to in 10 years then it’s probably time to move on. Time for a refresh. New eyes.
 
If I was younger, I would probably have stayed another term. But the time’s right for me to leave.  Have a break. Perhaps work part time, perhaps for a non-profit organisation.
 
Paul Buckley was CEO of Bass Coast Shire Council from February 2014-Feberuary 2019.
13 Comments
Frank W Schooneveldt
22/2/2019 09:19:41 pm

Thank you Catherine for your interview. Thank you Paul for your leadership over the past five years and good luck with your future.
I have studied the Bass Coast finances and can report to the people of Bass Coast that the finances are in good shape. I agree that we need to spend a lot more on infrastructure. With record low interest rates it’s a good time to borrow money. Councillor Les Larke has misled the people of the Bass Coast over the state of the Bass Coast finances and inexplicably continues to do so. It’s time he moves on.
Cheers
Frank W Schooneveldt

Reply
Edward Buckingham
23/2/2019 08:22:57 am

Paul and Catherine, this interview was a treat to read. An audio would be great too if it's available.

Marginal seat, more permanent residents, good ATAR scores and competent local government, and decent debates on council all good for the Bass coast.

And if I may suggest....
Indulge me (and other cyclists) with a bike path from Wonthaggi to Inverloch (through the fields not on the road). And protect the old boys home on Phillip Island from that negligent owner.

Reply
Mark Robertson
23/2/2019 07:45:52 pm

If Aquasure could be persuaded to pay their rates, estimated to be approx. $12 million per. year, Bass coast shire could easily afford to establish some tertiary education facilities. Watershed members met with Paul soon after he took on the CEO role, and he promised to get back to us " in a couple of weeks". Five years later we are still waiting for a reply...... Perhaps the new CEO could raise the issue again with the new member for Bass. Brumby/ Holding university has a certain ring to it.

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Ursula Theinert
24/2/2019 11:47:41 am

Many thanks to Catherine and Paul for a wonderful and insightful interview. Bass Coast is a stunning place to live and has an exciting future ahead guided by people of vision, planning and leadership. Best wishes to Paul.

Cheers
Ursula Theinert

Reply
Trevor Brown
8/3/2019 06:43:38 pm

I would like to post my congratulations to those responsible for the interview with the retiring Bass Coast CEO Mr. Paul Buckley.
This is no doubt the best scripted interview that I have seen for some time. However I am not sure how Mr. Buckley allowed the question on communication to be delivered as it was.
His answer clearly indicated that the council deliberately targeted people in the age group of 18 - 34 and by inference did their best to ignore those over 35. This is also evidenced by the deliberate and cynical refusal of council to include this demographic in their decision making processes over the past three years at least

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Cr Les Larke
8/3/2019 06:46:16 pm

Firstly let me say that I understand Mr Buckley wanting to protect his legacy.
That said, I have never questioned the form and content of Bass Coast Shire Council’s financial statements, however I have reservations about its financial sustainability and that is a key function, role and responsibility of Council and its Councillors.
In December 2018, the Victorian Auditor General reported that Council was at higher risk in three areas, namely:
- Adjusted Underlying Result – medium risk
[This measures Council’s ability to generate surpluses from its ordinary activities]
- Renewal gap – medium risk
[This measures the rate of spending on existing assets]
- Capital replacement – high risk
[This measures the level of spending on new and renewed assets]
The Adjusted Underlying Result is arguably the most important indicator, as it determines whether Council will be financially sustainable and able to maintain services on an ongoing basis. The indisputable fact is that Council will incur accumulated underlying operating deficits over the 7 financial years to 30/6/19 in excess of $20m.
It is akin to any business or family household incurring $20m of expenses in excess of its business and/or PAYE income.
Further, Council, in my opinion, uses an outmoded book entry accounting technique known as ‘Reserve Accounting’. The Victorian Auditor General has stated in writing “…At the outset I must say that I concur with the proposition of Local Government Victoria that the creation and reporting of non-statutory reserves in general purpose financial statements is generally to be discouraged. Many would argue that such ‘reserve accounting’ is an anachronism; …”
As a result, Council’s financial statements for the year ending 30 June 2018 were amended to include the following statement:
“…The existence of the reserves does not mean that Council has the cash funds available to allocate to the reserves purpose…”. In my view there is approximately a $10m shortfall in Council’s cash to fund such reserves.
In my judgement, as a consequence of the accumulated operating deficits of $20m over recent years and a shortfall of $10m set aside to meet non statutory reserves, Council will need to generate and utilise future operating surpluses and borrow substantially to fund its capital expenditure program and to address the renewal gap and capital replacement risks.
This, in my opinion, is the ‘big picture’ financial legacy and challenges inherited by our new CEO.

Reply
Albie
10/3/2019 08:48:40 am

And you wonder why no-one's listening to you Cr Larke?
Why people's eyes are glazing over when they read your issues?
I doubt that more than 1% of the population actually understands what you're on about - obviously the Auditor General and Minister for Local Government doesn't either.
Please represent the people who voted you in and concentrate on their issues rather than your own agenda. Your approach is self-serving and always aimed at being proven right whilst those who govern the Council''s finances (including an INDEPENDANT Audit Committee) have proven you are wrong.

Just.Give.Up

Reply
Frank W Schooneveldt
13/3/2019 02:45:20 pm


I refer to Councillor Les Larke’s article in the Bass Coast of 8 March 2019, titled “Council Finances are Worrying”. Cr Les Larke is full of rhetoric and very few of facts.

The following figures are taken from the Audited Financial Statements of the Bass Coast Shire Council.
Surplus Net Assets Borrowings
$000 $000 $000
Year Ending 30 June 2012 12,935 470,162 7816
Year Ending 30 June 2013 6573 491,398 7767
Year Ending 30 June 2014 2389 529,733 11,929
Year Ending 30 June 2015 6793 577,881 12,921
Year Ending 30 June 2016 (1225) 587,873 12,529
Year Ending 30 June 2017 12,216 620,493 13,945
Year Ending 30 June 2018 9990 636,579 15,465

Cr Les Larke states “The indisputable fact is that Council will incur accumulated underlying operating deficits over the seven financial years to 30 June 2019 in excess of $20 million.” (Note: The financial results for the year ended 30 June 2019 are obviously not available).

Clearly, the table above shows that Les Larke has again misled the people of the Bass Coast and he should move on.
More to the point, what are Cr Les Larke’s solutions to: climate change in the Bass Coast; infrastructure issues in the Bass Coast; and, liveability in the Bass Coast.

Cheers
Frank W Schooneveldt

Reply
Les Larke
13/3/2019 08:25:24 pm

Dear Mr Schooneveldt

I am sorry to say that your response highlights your misunderstanding of Council finances, and of greater concern, the fact that you have misled our community generally as a result of your misinterpretation, is of great concern.

In relation to the adjusted underlying accumulated deficits:

This measures Council's ability to generate surplus in the ordinary course of business—excluding non-recurrent capital grants, non-monetary asset contributions, and other contributions to fund capital expenditure from net result. A surplus or increasing surplus suggests an improvement in the operating position.

The figures you quote include non-recurrent capital grants and developer capital contributions which are not operating revenue lines.

I would be very happy to sit with you and explain how Council calculates its underlying operating result, and as said, the accumulated deficits in excess of $20m incurred for the seven financial years to 30/6/2019.

Alternatively, if you do do not trust my opinion, by all means seek further information in relation to the accumulated underlying deficit results directly from Council Administration.

The 2019 forecast figures are also available, having been tabled at our February 2019 Council meeting.

Regards
Les Larke

Reply
F W Schooneveldt
14/3/2019 07:44:03 am

Dear Mr Larke,
I believe that you have very conveniently ignored all the numbers to make your misleading point. I would also like to know your response to the issues I raised; that is the measures you as Councillor would take to address issues of concern, climate change, infrastructure and liveability on the Bass Coast.

Reply
Les Larke
14/3/2019 03:27:32 pm

Thank you for encouraging me to respond further Mr Schooneveldt, and gladly do so.

From the outset, the Community should be clear in understanding that Council will incur accumulated operating deficits in excess of $20m over the seven financial years to 30/6/19, and reiterate that your interpretation of Council finances in relation to its operating results is not correct.

That said, had Council broken even (let alone accumulated surpluses) on its ordinary operating activities over this seven year period, it would have an additional $20m plus ‘in the kitty’ (without the need for excessive borrowing), to address many important issues including those that you rightly highlighted.

I will respond to your specific questions around climate change, infrastructure and liveability in due time.

Kind regards
Les Larke

Reply
F W Schooneveldt
14/3/2019 03:54:13 pm

Hi Les,
We appear to be going round in circles. I suggest that you need to take a more holistic view of the Bass Coast Shire finances rather than the narrow view you have taken. We all need to work together as a community for the benefit of the Bass Coast Shire rather than wasting the Bass Coast Shire’s time and money in endless navel gazing.
I look forward to receiving your response to my specific questions in due course
Cheers
Frank W Schooneveldt

Reply
Les Larke
26/3/2019 05:22:02 pm

Bass Coast Shire Council finances

I refer to Mr Schooneveldt’s letter in the Sentinel Times on 19 March 2019.

On several occasions I have offered to meet with Mr Schooneveldt to explain Council finances and the difference between the figures he quotes and the adjusted underlying operating deficits incurred by Council.

The adjusted underlying result indicator adjusts the Council’s revenue and operating result to exclude items considered non-recurrent or capital in nature. This allows the indicator to measure the underlying operating performance of Council in the ordinary course of business. To remain financially sustainable a council should generate an underlying operating surplus, as operating deficits cannot be sustained in the longer term.

Mr Schooneveldt’s figures include items considered non-recurrent or capital in nature. For example, the value of roads, footpaths, drainage and open space handed over to Council by a developer upon completion of a subdivision is included in his revenue numbers, and masks Council’s true operating performance in the ordinary course of business.

I can understand Mr Schooneveldt’s difficulty in understanding Council’s operating performance, however it is important for our Community to realise that his portrayal of Council finances insofar as operating performance, is false and misleading.

That said, I stand by my view that Council will incur operating deficits in the ordinary course of business in excess of $20million in the seven financial years projected to 30 June 2019.

In these circumstances, it should be recognised that Council has lost at least $20million of ratepayers' money due to the incurring of operating losses over this seven year period, that otherwise would have been available for key infrastructure projects.

In essence, consistent operating surpluses leading to strong financial sustainability = availability of more funding for infrastructure.

Also, I would be more than pleased to meet with Mr Schooneveldt and explain further, rather than continuing debate through print and social media.

Kind regards
Cr Les Larke

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