Readers will recall Council boasted of doing a project of like magnitude to the current CCS build in the past. No details were given as to the project claimed to be done.
By Rob Steurmann
One such large project was done but it is improper for the current Council to take credit for this. It began well before the life of this Council and before the appointment of the current General Manager. This was the construction of four retaining dams to reduce the impact of heavy rains and flooding. Finance was arranged at the time with a special levy added to the water rates. It is to extend out over 20 years but it is now very close to the end.
Under the ever present cloak of apparent secrecy our Council nevertheless pushes ahead with the current plan to build in Gordon St. (CCS)
The “secret” costings include an amount best described as the contingency sum. At times it is said to be $2M and at other times it is 4%.
Despite this our Council ‘has it all under control’.
But so far the blow-out from the original cost of $76.5 M is $6.1m.
This exceeds the $2 M set aside as a reserve for unseen increases by $4.1m.
It also exceeds the amount as calculated using a 4% buffer by $3.16m.
No matter how it is looked at, on the surface and without access to the ‘secret” costings, it fails ‘the pub test’.
So what does this mean?
The building has to be funded and to do so council needs to borrow funds.
There is no evidence, as yet available to those stuck with repaying the loan, to verify any such loan currently exists.
Not a bottomless pit
So as the costs blow out the funds available to do day-to-day important works diminish.
If we borrow more then we pay back more. We get less of our money set aside for the vital work such as roads, footpaths, rubbish removal etc.
You know the basics that Councils should always do both well and first.
To continually say the additional costs are covered by the amount set aside as a contingency now that this amount has been passed is wrong.
The $2m has run out – it is not a bottomless pit.
The $2.96m (the 4% figure) is exhausted. Note these are not two separate amounts. There is but one contingency fund. It is one or the other.
The way this matter is being handled cannot engender confidence in residents that this Council is in control of the project.
Building is yet to commence and the contingency sum is already exhausted?
So what else lies hidden for future discovery?
Author’s note – 15 May 2021:
On Prime TV News last night the following statement was made by a Council spokesperson ; “the money to transport the soil had no impact on the budget.”
I find this very hard to believe.
I did not know the amount for trucking the acid sulphate soil was $1.51m when I wrote the above report earlier yesterday. And, given the secrecy over costs I was unsure of the exact cost of the project to date. This should not matter because I used a guess figure of $82m – that is $6m in overspends.
The general principle is the same – it is not a bottomless pit. Extra costs are in excess of the ‘contingency sum’.
Rob is a retired former federal government forensic auditor who writes regularly for CCO.