The following quotes and figures relating to GESAC are taken directly from the budget and in chronological order. We admit that we are not accountants nor financial gurus. We are simply residents trying to make sense of a document that we believe to a large extent, is all ‘smoke and mirrors’. This is especially apparent in regards to GESAC. What we request is that readers assess
the following information and ask themselves these questions:
- Do these figures really add up?
- What evidence or explanation is provided so that accuracy may be ascertained?
- Why is the language so obtuse? Shouldn’t budgets be self explanatory, clear and comprehensible to the lay ratepayer?
- On what basis is it claimed that the ‘income’ from GESAC next year will total $2,991 million? Is interest repayment included, or excluded from the above figure? Why isn’t this made clear?
- How many ‘expressions of interest’ have been received? If GESAC has been inundated with ‘offers’, then why is Council advertising tenders for various sections?
- Was there ever a comprehensive business plan and analyses in place? Where is this, if it exists?
- Does talk of a ‘surplus’ mean after interest and costs are deducted?
- ‘Operating costs’ are stated as $3.79 million. Does this include the 50 full-time staff or are they an extra financial burden which hasn’t been added in to this figure? Does this figure also include the ‘liabilities’ such as interest and paying off the principal which alone equates to over $2.5 million?
We have countless other questions. But we’ll leave this to readers to ask. We welcome all responses. The budget quotes follow:
“An operating surplus of $4.78m, of which $870k includes non-recurrent grants for ‘Better Pools’ Funding $625k, Duncan Mackinnon $200k and $45k for Storm Water Harvesting (any operating surplus is used to increase Capital works). This operating surplus includes a first year loss of $1.05m from GESAC.”
Capitol Investment: Glen Eira Sports and Aquatic Centre (GESAC) $7.58m
GESAC Furniture and Fittings $1.65m
The Glen Eira Sports and Aquatic Centre is projected to run at a surplus in 2012-2013. In 2011-2012, GESAC will experience a part-year of revenue, more than a part-year of operating costs as well as one-off establishment costs.
Operating Costs: Glen Eira Sports and Aquatic Centre (GESAC) expenses $3.79m
Debt servicing costs relating to the interest component of Council‘s borrowing costs for GESAC $1.82m
|
GESAC |
Annual Budget
2010-2011 |
Forecast 2010/11 | Annual Budget
2011=2012 |
Variance 2010- 2011 Forecast to 2011-2012 Budget |
|
Income |
– | – |
2,991 |
2,991 |
|
Expenses |
433 |
250 |
4039 |
(3788) |
| Net Result | (433) | (250) | (1048) |
(798) |
The 2011-2012 budget reflects user fees for GESAC for 9 months of the year totaling $2.89m. During the course of 2011-2012, GESAC will open. It will provide a range of facilities and services including some never offered before and some which are subject to market forces. Some experience will be required in order to set charges for some of these facilities and services and adjust them from time to time. Separate arrangements will be established under which the Centre Manager will be able to manage charges within the Budget determined by Council.
Offsetting the first year GESAC revenue is an unfavourable variance for the State Revenue Office revaluation reimbursement (received every second year) $400k.
Increases in specific user fees reflect expected increased demand for these services. In addition, Council plans to increase user charges and other fees in line with expected market trends over the budget period, to maintain parity of user charges with the costs of service delivery.
Employee benefits – increase of $5.14m – Increases in staff numbers resulting largely from Council‘s decision to build the Glen Eira Sports and Aquatic Centre (GESAC). Council has budgeted for a staff compliment of approximately 50 EFT‘s for GESAC
Materials and consumables increase GESAC materials $319k including – promotional materials $100k, retail costs $66k, chemical costs $60k, printing and stationery $47k, minor furniture and equipment $21k and computer software $15k.
Contractors – referee payments for GESAC $72k –
4(q) Debt Servicing Costs ($1.82m increase)
These costs relate to the interest component of Council‘s borrowing costs for GESAC and $30k for the equipment leasing for the strength and cardio equipment for the facility.
4(m) Insurances ($47k increase) Insurance costs include public liability insurance, insurance excess and industrial special risk. It is expected that insurance levies will increase overall by $47k due to an anticipated increase in insurance premiums in 2011-2012 as a result of GESAC.
6.1(h) Intangibles (Systems Software) ($391k) Intangibles (Systems Software) include renewing and upgrading Council‘s software systems. For the 2011-2012 year, $296k will be expended on upgrading the software and $95k for GESAC Software.
6.2(c) Borrowings ($25m) An estimated $25m of borrowings has been included in the 2011-2012 budget to fund the construction of the aquatic centre.
Principal repayments are estimated to be $787k and interest payments $1.82m.
7.1(i) Interest-bearing Liabilities – Current and Non Current – ($24.85m increase)
Interest-bearing liabilities represent loans and borrowings to fund the construction of the aquatic centre. Estimated borrowings of $25m have been included in the 2011-2012 budget. Principal repayments are estimated to be $787k and interest payments $1.82m
GESAC – Glen Eira Sports and Aquatic Centre – Software (Membership management system; Personal Training Software) $95,000
GESAC – Glen Eira Sports and Aquatic Centre – Furniture & Fittings (Self Service Kiosk; Lockers; Service Area Fitouts; Furniture and Equipment and Advertising Signage) $1,653,800
GESAC – Glen Eira Sports and Aquatic Centre – Plant & Equipment (Pool Vacuum; Two Way Radios) $49,000
Glen Eira Debates 
May 15, 2011 at 10:28 AM
Sporting facilities are one of the main priorities of Local Gov. It always has been and always will be. We take it for granted that our parks will kept in looking nice and be safe. If the fences were falling down and pavillions shabby and poorly maintained residents would soon become disgruntled. They would be ringing the town hall and screaming. The vast majority of residents support this view. The Council understand this that’s how they get their priorities. Childcare and running kindergartens is not a core function of Councils. These are functions of State and Federal Gov. If you ask the average person about the Councils they think of garbage collection, clean streets, no pot holes orderly town planning, plenty of parking and well kept parks. They don’t blame councils for lack of 3 year old kindergarten places. Overall residents are pretty happy. Councils rarely take a position of the minority. If they did the whole show would topple over. Congratulations on your budget work. De-spinning is a specialist job. You do well.
May 15, 2011 at 12:37 PM
The problem with this argument is that residents ultimately pay for all the services that a council provides. Ratepayers’ views should therefore be crucial to planning decisions and expenditure. This does not happen in this council. For some reason the whole vision is bound up with physical structures that are over the top, cost millions upon millions, and provide little return to the majority of residents. It would be fascinating to know how well any of these ventures are doing and how much money is really being returned to the community. Personally, I doubt the business acumen of this council. I can’t think of one venture that is running at a profit. Yet there is attempt after attempt to be business managers.
The argument that basic services are the responsibility of others also doesn’t sound very convincing to me. That’s a non argument, especially when you compare what other councils are willing to invest to ensure that their residents needs are catered to, and what this council spends on these essential services. Over time Glen Eira has simply turned its back on all and hoped that the private sector would take over. Or they’ve prayed for some miracle, that governments might come through and fling them a bone. To me, that’s appalling planning and again let’s down residents. it shouldn’t take residents protests and long term actions to get things done. There’s now the childcare coalition. A few years back there was the attempt to close down the Mkinnon centre, even further back the attempt to close down the caulfield centre. The policy is clear it seems. Residents shouldn’t have to take to the streets with banners and protest to get things done. This should be planned for carefully and with full community consultation. When none of this happens, then you have fly by night decisions that ultimately cost us more and more – such as gesac. No way will this end up costing 40 odd million. By the time its up and running I’d bet my life that we’re looking at 60 million plus. Then in ten years time we’ll be told that it is too expensive to keep running, and renovating costs, so let’s pull it down and build something new!
May 15, 2011 at 10:47 AM
In real estate parlance it’s called location location location. GESAC is in the wrong location, poorly serviced by public transport and not near anything. If we had a savvy Council, it would have been located on the triangular block of crown land where Lipshutz, Esakoff, Hyams and Pilling approved a 20 storey building. It is near a train station, tram and Monash University and would have made Glen Eira a truckload of money. But alas, only Penhalluriack has a vision and business mind. Once again Glen Eira has been let down by petty politics and an incompetant administration.
May 16, 2011 at 1:13 PM
It would be good to know what the plans are for the Carnegie pool as well. Last year it was claimed that maintainence was $250,000. This year it’s down to $205,000. Sure, maybe the major problems are now fixed up, but reckon you can be sure of one thing. Each year will see a decline in spending on this facility and in the end the argument will be that it’s too old, too decrepit, too expensive, so let’s shut it down and sell the land and do all sorts of twists and turns. Only a matter of time for this pool.
May 15, 2011 at 4:40 PM
White elephants are plentiful in Glen Eira as are project blowouts. There’s the Carnegie library which went millions over initial budget. Then there’s the Caulfield Pavilion which because of unfathomable mistakes meant that ovals had to be moved – again at the cost of heaps. Nothing that is touched stays on budget. Residents should ask is this because of simple inflation, or becuase the people in charge actually haven’t got a clue, haven’t planned properly, and certainly don’t care about wasting everyone elses hard earned cash.
so far all that the pools steering committee lets out into public is statements like everything’s on schedule apart from a bit of rain that put us back some weeks. Nothing much on budget, costs, or anything that really matters. Guess who’s chair of this committee too – none other than Lipshutz. Need I say more?
May 15, 2011 at 5:44 PM
GESAC is the baby of Feldman with the able assisstance of Tang. No wonder Feldman fled the State. Now Tang needs to run. GESAC is Council’s decision and will be a noose around our knecks for a long time.
May 15, 2011 at 10:59 PM
Anyone pick up on the fact that this council spends zillions on its corporate counsel? Litigation is the name of the game here, lawyers coming out of your ears. Except when they’re really needed, like hiring QCs to appear before the C60 panel. What do other councils spend? Anyone know?
May 16, 2011 at 9:51 AM
Article in today’s Bayside Weekly –
• BY REBECCA THISTLETON
Childcare, rates to rise
CHILDCARE costs and rates will increase under Glen Eira’s draft 2011–12 budget to fund commitments for the year ahead.
Rates will rise by almost seven per cent and the council will borrow about $25 million, the maximum allowed by the state government.
Glen Eira Resident’s Association president Don Dunstan slammed the rate increase and borrowing but said rises were ‘‘extremely predictable’’ as council had run out of public land to sell off and needed to increase revenue.
Mr Dunstan said ratepayers would be forced to pay $10 million-$15 million in interest over the next 15 years for the $25 million loan.
Childcare fees for children under three will increase from $91 to $116 a day from next year, which the council attributed to new state requirements for centres to have one staff member for every four children under three years old.
The council has proposed to build a childcare centre on Kooyong Road and budgeted $250,000 for design and consultation.
Recreation was the winner in the budget, with Glen Eira Sports and Aquatic Centre receiving $7.58 million. Duncan Mackinnon Pavilion’s redevelopment was allocated $5.5 million and the municipality’s sports grounds received $1.3 million.
Mr Dunstan said residents could not understand why the council’s budgets repeatedly spent more on ovals and sports facilities than services such as childcare.
‘‘Council has been blaming the state government for everything for the past 15 years and have been spending hand over fist on sports for a decade,’’ he said.
Environmental initiatives such as new street lighting will cost $3.37 million, and waste charges are also set to rise.
Glen Eira will continue to give a pensioner’s rebate totalling $270, one of the highest in Victoria.
A breakdown of rate revenue shows about 14 per cent goes to roads, 26 per cent to capital works, 15 per cent to parks and recreation and 6 per cent to child and family services. The other 39 per cent was divided between eight remaining sections.
The budget will be open to public comment until the end of June.
May 17, 2011 at 10:18 PM
$96,000 on software to run GESAC – since the budget doesn’t provide any insight, it would be prudent to ask what software Council has acquired and does the $96,000 also include the cost of training and automated real time interfaces to Council’s existing accounting system/s.
I suspect the next budget will include a sum much greater than $96K to cover the cost of training and interfaces.
Another instance of residents/ratepayers being placed on drip feed so that real costs can be hidden.
But then again, knowing this Council’s ……