SO—WHAT ARE WE GOING TO DO WITH THE SPLURJ MAHAL? PART 1

First, an apology

Since this blog began, I have always maintained that if I were ever to write anything wrong or mistaken, and my error became clear or was pointed out to me, I would correct it and apologise.

Not long ago, I wrote that the Shire of York would never release the kind of information I had more than once sought about the cost of constructing and maintaining our Splurj Mahal, the YRCC.  

Shamefully, I even suggested that the Shire administration might be relying on prevarication, obfuscation and evasiveness to keep the horrible truth firmly under wraps. 

Up to a point, events have proved me wrong, and I find myself, not for the first time and almost certainly not for the last, sampling the bitter taste of humble pie. 

What has made this apology necessary is a discussion paper and supporting documentation annexed to the agenda for next Monday’s Ordinary Council Meeting.  Ms Suzie Haslehurst, Executive Manager Corporate and Community Services, is the author of the 21-page paper.   

The supporting documentation consists of 10 appendices comprising, as she tells us in her introduction to agenda item SYO14-02/17, ‘all of the documents that have been commissioned or developed by the Shire’ in connection with the YRCC.  Those appendices take up 295 pages of the review.

I was heartened to read that this documentation was provided ‘in the interests of complete transparency’ and because ‘each document contributes to the historical “story” of the YRCC and its operations’.   Ms Haslehurst clearly understands the importance of knowing history to our understanding of the present and our endeavours to shape the future.  

Suddenly, I don’t feel so alone.

   

It is Ms Haslehurst, therefore, to whom I must apologise, and I do so gladly.  That doesn’t mean, though, that I regard myself as being completely in the wrong.  I did say ‘up to a point’, and I disagree strongly with several features of her recommendations to Council regarding the problem of the YRCC.

The documentation she has made public is not, I suspect, all the documentation relevant to public concerns about the centre.  It would be nice to see documents relating to tenders, contracts, disputes with contractors, other aspects of project management and surreptitious diversion of funds from other projects if such diversions in fact took place, as many seem to believe. 

But as the song says, ‘You can’t always get what you want’, and I have a sneaky feeling that many such documents have ‘dematerialised’ and are now flapping about in the depths of an alternative reality.

Still, Ms Haslehurst has provided hard information previously denied to us, and for that she and her colleagues deserve our thanks.

Cost of construction

In my article ‘The White Elephant in York’s Pajamas’, published in May last year, I mentioned that back in 2008 consultants Ralph Beattie Bosworth had estimated the likely cost of building the YRCC as $5,750,000.  The cock-eyed optimists running the Shire in those days disagreed, citing an alternative figure of $4,386,000.  

I suggested that the total cost of construction was most likely somewhere between $8m and $12m.

As things have turned out, that wasn’t a bad guess.  According to table 4 on p. 10 of Ms Haslehurst’s paper, the actual figure as at 31 December 2016 amounted to $8,048,001.  This sum included, among other expenditures, $3,473,189 for building the centre; $1,051,088 for bowls and tennis greens; $570,000 for lighting; and $233,413 for car parking.

However, that doesn’t tell us the whole story. I’m reliably informed that while the Shire has added in an estimate of the cost of its own contribution of labour and plant ($250,000) it has never included administration costs, for example salary and other costs relating to the project manager, secretarial help and so forth.   From 2008 to 2016, that would probably add a few hundred thousand to the total.

Loans

There is also the question of loan repayments.  In table 6 (p.11) Ms Haslehurst lists three loans, one for $1,330,500 at 6.3% p.a. over 20 years taken out in May 2011: a second for $320,000 at 5.15 p.a. over 15 years taken out in February 2012; and a third, also taken out in February 2012 at 5.15, for $499,155. 

The combined annual repayments on those loans amount to $196,655—a tidy impost on ratepayers.

To be precise, the first of those loans requires an annual repayment of $117,929, the second one of $30,764 and the third, one of $47,972.   By May of this year, the Shire will have repaid $707,574 towards the first loan, $153,820 towards the second and $239,860 towards the third.  That makes a grand total of $1,101,254 over six years, and there are plenty more years to come.

I think we’re justified in adding that last amount to Ms Haslehurst’s figure of $8,048,001.   

That gives us a likely total of at least $9,149,255 paid out so far since 2008 to keep less than one-fifth of York’s population ‘healthy and vibrant’.

Not to mention the cost of pickling the livers of a gargle of superannuated beverage bandits guzzling subsidised booze in the YRCC tavern.   Which brings me to…

The bar and restaurant

Here, I think, the Shire has engaged in a game of smoke and mirrors.  According to table 9 on p. 14 of Ms Haslehurst’s paper, the bar and restaurant combined during the first half of the current financial year have made a gross profit of $18,384 (that figure isn’t cited in the paper, I had to work it out for myself).

The figure is deceptive, because it doesn’t take account of YRCC staffing costs—salaries, superannuation, employment on-costs and in one case housing.

If you take those into account, it becomes obvious that the bar and restaurant are running at a considerable loss.   Unfortunately, I can’t be more precise, because the figures provided don’t seem to make sense (how can salary payments amounting to $17,992 give rise to super contributions of $16,100?).

Where did the money come from?

Table 5 on p.10 of Ms Haslehurst’s paper lists a variety of funding sources as having contributed to the cost of the YRCC.  The biggest contribution from an outside source was $2,614,198 from the Country Local Government Fund, followed by $590,738 from the WA Department of Sport and Recreation.

But the lion’s share of the cost has come from loan funds ($2,149,655, see above) and so-called ‘municipal funds’ ($2,181,310), which term I think is code for money collected as rates. 

That’s a total of $4,330,965 out of Ms Haslehurst’s nominated $8,048,001 for which York’s ratepayers have been and in the case of loan repayments continue to be responsible.  Loan repayments and rates alike come out of ratepayers’ pockets.

And if the loans go to full term, the Shire—i.e. York’s ratepayers—will have shelled out an additional $1,389,815 by way of interest. 

Thank goodness it’s only money!

At the opening of the YRCC on 9 November 2012.  The athletic-looking gentlemen in white hats are Shire President Tony Boyle and Minister for Sport and Recreation the Hon. Terry Waldron.  In his address, the Shire President observed that the project had to date cost $7m, boasting that 'This level of expenditure on a single project is by far the biggest ever undertaken by the Shire of York'.  Photo: YDCM

TO BE CONTINUED…