WILL SANTA CLAUS COME TO TOWN?

This is mainly an extract from a letter that has been sent on behalf of a group of concerned community members to the Premier, Colin Barnett, and the Minister for Local Government, Paul Miles, politely requesting that the Shire of York’s current financial situation is adequately monitored to ensure it remains tenable.

In the last recorded Council Minutes, October 24, 2016, there is listed an uncollected Shire Council rates component of $3,506.072 with an additional outstanding sundry debtors’ ledger of $338.574, a total of $3,854.646.

At this moment in time the salary and superannuation paid to employees over this financial year, the on-costs such as insurance, various allowances and access to tools of trade and other required infrastructural support may not be fully covered by the final amount of rate revenue collected in the financial year.

Without recourse to a massive, successful, rate revenue recovery campaign, probably involving expensive legal action, the current scenario could see a projected Shire debt of over $1.million developing well into the New Year. The Shire of York could then be facing a form of technical insolvency.

Given that as of October 24, 2016, 80% of rate revenue had yet to be collected- the summation is that at the end the annual financial reporting period- 40% of rate revenue will remain uncollected - so a disastrous shortfall in Shire rates income is possible as of June 30, 2017.

This particular imbroglio may have been created by a recent massive increase in Shire of York rates that has financially adversely affected and angered ratepayers.

Also just 7.5% of the Sundry Debt has been collected with most remaining outstanding for in excess of 90 days, being $338.574 in total.

 Auditors and lawyers acting on behalf of the Shire may have already assessed that much of this is an un-recoupable debt, possibly mainly relating to a business now associated with the disbarred York Real Estate Agent, Colin King.

As the origins of much of the debt could date back to 2007, the figure excludes any interest rate accrual, penalties for non-payment and legal and accounting fees. Being over a period of up to 10 years-this debt should now be in the vicinity of $500,000.

Shire of York financial records show it has cash assets of around $3.6 million that could be used as a last resort to stave off serious short-to-medium term liquidity problems and possible insolvency.

The Shire has previously claimed it has further tangible Assets to the value of $133 million. This is highly debatable- and unlikely.

 Known assets that could be sold such as land, buildings and plant would be extremely lucky to fetch more than $6 million in the current economic climate.

As examples, the community asset, the York Recreation and Convention Centre with a (2011) replacement value of $7 million according to architects Hodge, Collard, Preston, would be lucky to fetch $2 million in an asset sale even with its Tavern Licence. It has failed miserable to be profitable within either its Tavern Licence/ restaurant arm or with convention bookings.

The Old Convent School purchased by Local Government Commissioner, James Best, in 2015 for $625,000 would have a real value of under $400,000 because of required restoration costs.

Such a small amount for two major assets in sale/profit realization is less than 10% of supposed total asset value of $133million and is less than the Shire of York’s overall income, including grant funding, per annum. Total debt compared to real asset value could be as high as 50%.

So lack of rates and sundry debt recovery, linked to unmaintained and unknown assets, suggest a potential serious liquidity problem.

Neither the YRCC or the Old Convent School assets had any adequate form of due diligence undertaken by the Shire representatives with regard to their commercial viability, short and long term  financial sustainability, and overall necessity to the community prior to the build and the purchase.

In fact former Shire senior staff, some Councillors and the Administrator would have been dismissed and probably be prosecuted if it had been a private enterprise build and purchase with the evaluation based on commercial reality, adjudged under corporations law and then by reasonable stakeholder expectations.

Unfortunately the current Shire of York administration now claims to have no overall idea of what assets it has and what is their actual value.

In a recent letter to me from the Chief Executive Officer, Paul Martin, he confirmed this as fact and admitted that these unregistered assets, their condition, maintenance, renewal and upgrade are a fundamental requirement for the Shire’s financial sustainability.

Mr. Martin’s further comment was ‘ Until the Shire understands what assets it has, what condition they are in and how much they will cost to maintain into the future we are unable to accurately determine our (the Shires) long term financial sustainability’.

The matter is so serious the Shire intends to hire a dedicated Asset Management Officer to be involved in the so-called ‘capturing’ of its assets.

Some known assets are in an extreme state of disrepair and/or neglect requiring millions of dollars to be spent on maintenance in the immediate future. Shire roads alone could cost $1 million per annum just to maintain them in their current dilapidated state.

Given these circumstances and the pending State Election of 2017, I call on you as Minister for Local Government to undertake an independent financial risk assessment of the Shire of York finances with a view to assisting, where necessary, in ensuring the Shire’s financial situation remains tenable.

As a public/voter perception, the possible financial collapse of the Shire of York, that includes WA’s oldest and most historic inland town, could spell out an emotive electoral disaster in the making and not something any government should countenance at this late time in the electoral cycle.

I have advised you of a situation that has been caused by past internal financial mismanagement, obscured by a lack of financial accountability demanded by the Department of Local Government and stymied by the fact that the Auditor General, Colin Murphy, is still yet to receive a remit to fully investigate financial auditing procedures and associated malpractice within local government councils.

As this is now known to you- it is incumbent upon you to establish whether this is fact or an over-simplification of a complex government and ratepayer funded financial system that would see private businesses go bankrupt and their executives’ actions examined under the Australian Corporations Act, 2001

I hope you will kindly respond to this letter and its request at your earliest convenience. No matter what- a request has been registered with you and your department and the Premier and his department by a third party that should be required to be recorded through ministerial obligations under the State Records Act, 2000. Notification of your receipt of this letter is automatic.

Thank you: - David Taylor (Shire of York Ratepayer.)

(Footnote)

If you do not ask, you do not receive. If you do not receive you may well regret not asking.

It is of some interest to note that Tony Simpson was The Minister for Local Government and Communities. Paul Miles is the Minister for Local Government, Community Services.

There is been a change in name from a single portfolio, encapsulating both local government and communities, to a separate portfolio status. Communities and local governments always should have been important, stand-alone positions because local government often does not represent the best interests of the community or deliver all the required community services.

Maybe Tony Simpson’s bumbling ineptitude did local communities a favour?