I am posting the speech Steve Kons made last night at the special Burnie City Council meeting. The meeting was to adopt the annual plan and budget (which was passed unanimously). Today I emailed the Mayor and asked if I could have a copy of it to post on our page. All credit to him, he agreed without hesitation. It is his explanation of the budget. I have copied it exactly as it was emailed to me. To quote from his final lines, it is a ...harsh critique.... If you wish to respond to his words, please remember this is a public forum and I will be obliged to remove any posts which may be disrespectful or potentially defamatory. Here it is: BURNIE COUNCIL BUDGET MAYOR EXPLANATION OF THE 2014/15 BUDGET As Mayor there are generally no excuses for rates increases but i will certainly make a few points to illuminate to many who are not aware of the financial train wreck that was Burnie Council until a few years ago. Everyone is aware that when Alderman French and i were Mayors in the 1990s up until 19997/98 we had built the cash investments net of bank overdraft to a value of $12,867,335. That equalled $643.36 per person based on a population of 20,000 this was actual. What Council had done for many years prior to this, was that they were prudent and i offer my congratulations to the then former Mayor who is now the Deputy Mayor Sandra French and Alderman Altamira and all alderman who were on Council up until the late 1990s. What we saw since 2000 was an age of excess and flamboyance never to be seen again since the downfall of Lehman Brothers. We had a majority on Council intent on betting the farm in a game of feel good policies without any financial rigour or concept that one day the spending like a drunken sailor would come to an end and it did. The Alderman who blindly went down the path of abrogating their responsibility to the General Manager were Alderman Boyd, Ryan, Munro, and Winter and i name these Alderman because whenever i spoke up about the excesses they howled me down. Alderman who had questioned the goings on were French and Green and they have made their views known to me and in meetings in which i have heard them say they were the dissenters to many “entrepreneurial decisions” There are others around the table who were here during this period in question but i cannot judge them as to whether they were on the side of spending without question or not, so i won’t pass judgement on them. The day before the Water and Sewerage assets were passed over to Cradle Coast Water the Burnie City Council had amassed a debt of $17,000,000. This is the dirty little secret that was kept quiet for a long period of time. Burnie Council was in dire straits they had gone from a positive of $12,000,000 to a net debt of $17,000,000. All the Council debt was packaged up and transferred with the water assets the only smart thing that happened during this period. It was like putting the dirty linen under the bed and hoping your mum wouldn’t find it. In essence $29,000,000 more was spent than was received during this period of time. The former Mayor who sits here today in usual silence presided over a financial nightmare oblivious to what was going on. He presided over the following and never raised an eyebrow. (1) Camdale fiasco which ended costing this community about $2,000,000 (2) The purchase of Tioxide for $2,500,000 which is today worth next to nothing (3) The Makers Workshop which was costing Council in the order of $500,000 per annum (4) Burnie Sports and Events which saw the destruction of our valuable clubs volunteer bases (5) The rusting steel markers which cost about $350,000 The above shows that these tragedies collectively cost this community $6,500,000 which would equal about an once off increase of 40% in rates To name a few that stick in my throat. These festering issues required some decisive action to be taken and regrettably these issues had to be tackled head on with the consequent political fallout which came or will come. The Council before you today is not the same as the one that ran the show without any control or direction. I have said in the past that as The Mayor of this Council i do not want to have the General Manager rub my tummy and pat me on the head and make unilateral decisions which bore no resemblance of good corporate governance. Unfortunately the former Mayor did not understand that the task of being Mayor or Alderman is more than a ceremonial position where you just roll up to a meeting and agree with what is put to you. What i expect is, (a) A cost benefit analysis for any decision (b) True professional advice which is challengeable (c) Accountability for outcomes (d) Council scrutiny and rigour of any advice. (e) Leadership and direction from around the table, by those elected to run the Council. A fair bit of the hard work has been done and that has been done with small increases in the rates. Any other Mayor and Council that had to deal with so many mistakes in judgement would quite frankly have thrown in the towel and said why bother fortunately for this community a majority of this Council is intent on fixing up the mistakes, errors of judgement, faults, blunders, gaffes, lapses, muddles and my thesaurus runs out as i think i have made my point. We have achieved much over the past two and a half years and now the ray of sunshine is just over the horizon. Nearly all the entrepreneurial actions which occurred in the past decade and were applauded by a majority of Alderman have been shown to have been fatal errors which this community had become unwilling participants in. I hope that the public can view our Council in a positive light in to the future in view of the fact that for about most of the past decade the Emperor had no clothes. We are a community which is resilient and by that i mean does not give up, and i believe that when i go to a Council budget meeting i always state that Council is a monopoly provider of a service and should not abuse the level of trust which the community has given it. By the end of this financial year Burnie City Council will have had the biggest structural shake up in its structure for many years and will be focused on achieving budget cuts from internal savings. I will be challenging the General Manager to produce operational budget savings on a like for like budget of CPI minus a minimum of 1% and i mean the expectation will be higher than the minimum because if the public is finding it tough it’s about time we delivered some belt tightening of our own. I thank the public for understanding that what happened was that this Council spent on the sunny days and when the weather turned sour the cupboard was bare. I believe that this has now been redressed and we are on the path of sustainability with the only challenge being the unknown as yet running and building costs of the aquatic centre but there will be a real focus on this aspect of Councils operations to limit it. We move forward by having learnt that the elected members of this Council should drive the agenda and that they are awake and alert and have made decisions for the right reasons not for the fact that they can experiment with other people’s money and call their decisions entrepreneurial, leave that up to people who can spend their own money not the public’s. The positive aspects of Councils activities have been even though a large number of Alderman who were beholden to the former General Manager and were not keen to advance these measures they eventually did happen. (1) An independent audit committee to advise Alderman independently of staff on key areas of Council activity (2) A total review of delegations to the General Manager in an effort to limit the very generous delegations which gave the General Manager virtual carte blanche to take whatever actions they wanted with little reference to the Alderman for approval (3) A 10 year financial management strategy to ensure that debt blow outs do not occur and that there is a healthy cash balance to ensure the things not budgeted for can be funded (4) A total review of Council policies. (5) A move out of areas where private enterprise can offer services in a more efficient way than Council can. (6) The entity review which saw Burnie Sports and Events wound up even though there are legacy issues to be unwound over the next few years (7) The cessation of Council entering areas where it has no core competency (8) No new functions or activities to be entered in to by Council which are not approved by Alderman. The ship now has a rudder and the dry dock period has commenced. This has been a difficult period for the community and the Council wishes to advise the community that this Council under the current composition is aware that Council has a role to play in smoothing out its demands on the community as far as funding is concerned and we are in the process of running the Council which will provide services which only it can provide and the fanciful notions of being a major player in economic development will be put to the side and we will support those who have the capacity to undertake such activity. We will be supporters and spectators but we cannot be active participants unless there is market failure. I know that this has been a harsh critique but you know me and i call it the way it is and i do not shy away from crushing egos. Thanks you Steven Kons
Posted on: Wed, 25 Jun 2014 08:59:49 +0000
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