GOVERNMENTS REVEAL FREMANTLE HAS WORST FINANCIAL RECORD & HIGHEST PAID MAYOR IN WA

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                          Work progressing on Fremantle Council’s new Administration Centre 

•Fremantle Has Highest Financial Risk Factor

•Brad Pettitt Top of the Financial League of Mayors

•Government Advise Ratepayers: ‘question council performances

Statistics, published in The West Australian (17th April 2018), show Dr Brad Pettitt has become the highest paid mayor in Western Australia.. These figures are confirmed by Fremantle Council’s accounts and exclude various allowances. 

Additional statistics, published in WA Government’s Financial Health Index (FHI), show that during Dr Pettitt’s tenure the City of Fremantle has fallen to the lowest position in the State with a Financial Health Index  figure of 44

In two of the immediate past three financial years the city had a low score of 42 and 44. In the Financial year of 2016-17 the score was also very low but the city changed its accounting methodology and elevated the FHI to 87. At that time Treasury issued a statement saying: ‘We stand by our original figures’.

Top Mayoral Salaries are:

Fremantle: $139,419

Joondalup: $139,410

Belmont:   $139,409

Bayswater: $139,310

The Financial Health Index of those Councils show:

Fremantle: 44

Joondalup: 61

Bayswater: 86

Belmont:   94

The higher the score, the better the financial health of a council. These scores are an indication of financial management and of services offered to ratepayers. They show ratepayers’ their value for money.

It is interesting to note the second lowest performance is Nedlands with an FHI of 50. Fremantle based consultancy LewiCorp Pty Ltd, owned by Chris Lewis who spearheaded the failed ‘Keep the Dockers in Fremantle’ campaign, is shown as being paid as a council adviser in the accounts of both Fremantle and Nedlands. Lewis was also instrumental in a fundraising campaign for Dr Pettit’s first mayoral campaign. 

GOVERNMENT ADVISES COMMUNITIES TO QUESTION COUNCIL PERFORMANCES

The WA Government website <https://mycouncil.wa.gov.au/Council/CompareAllCouncil> advise to ratepayers states: “A very high or low FHI may be a prompt for questions to be asked by the community about a local government’s revenue, expenses, and service delivery. The FHI is best viewed as a trend over time”

ACADEMIC THEORY- ARE THE CHOOKS COMING HOME TO ROOST ?

When Dr Pettitt was first elected mayor he stated: ‘. . . I’m delighted to be able to put my academic theories into practice in Fremantle . . . ’. but has never detailed his academic theories. After nearly ten years in the top job, and based on the performance of council under his leadership, the theories must be questioned.

A ratepayer-funded, multimillion dollar, public relations campaign has failed to halt the slide in the city’s fortunes. The campaign includes websites, newspaper advertising and a magazine which has ceased publication after council admitted it has failed. 

There is a growing impatience among ratepayers and businesses, a very high proportion of whom have closed shop and left or are struggling to pay higher rents and increasing rates in the face of falling customer numbers.

FAILED PROMISES

The city’s east end now has approximately 80 vacant retail premises with no sign of the resurgence of business promised as a result of the development of a Woolworth’s shopping centre (now prematurely closed). The increase of trade from residents expected from new developments have not materialised. Anectodal evidence indicates the LIV apartments are about 50% occupied following an increase in service personnel taking up residence..

In the instance of the re-development of Atwell Arcade the mayor promised that 300 people would be employed in the new offices. That was three years ago. So far there are about 40.

Without knowing Dr Pettitt’s academic theories it is difficult to comment but there is scant evidence of their success. There is no questioning Brad Pettitt’s youthful enthusiasm but after ten years it is reasonable to question the efficacy of his theories.

Over the next few weeks Fremantle Backchat will examine issues related to the current failure of the city to improve its financial position.

Part Two: Next Week. Council’s Lack of Transparency

Roger Garwood, Editor. <editorbackchat@gmail.com>

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MELLOW YELLOW, THE MAYOR,  DONOVAN AND  AN ELECTRIC BANANA  WHICH WENT PEAR SHAPED

THE TRUE STORY OF A FABLED ARTWORK  WHICH USED THE WRONG RECIPE

Back in the mid 1960s, the days of flower power and a few substances, other than alcohol, which could mess with your head  I was fortunate enough to be living and working in the middle of London. 

Naturally I was cautious about imbibing in substances other than water or eating anything more adventurous than a cucumber sandwich.

At that time, around 1965,  a young troubadour by the name of Donovan was making waves in the music world. His lyrics were a little difficult to understand but a modicum of research has revealed that he may have been the unwitting instigator of the great artwork in Fremantle which is now refusing to leave. 

MELLOW YELLOW

One of his hits from around 1966 was ‘Mellow Yellow’. Nobody has actually been able to work out what it was all about, let alone Donovan himself.  

One verse runs:

Electrical banana

Is gonna be a sudden craze

Electrical banana

Is bound to be the very next phase

Nobody actually knew what an Electric Banana was.  Donovan was unable to offer a clear explanation and there may have been a good reason.

However one story is that an Electric Banana was made by getting a couple of sticks of Juicy Fruit chewing gum and inserting them under the skin of the ‘nana. The fruit was then left to mature over a few days and, in fact, go a little mouldy. Hence ‘Mellow Yellow’ Then, and there are several versions of this, you simply peel the banana and eat it, gum and all. The net results were some pretty wild hallucinations.

Some people say it didn’t work. I confess my memory is not serving me well.

FAST FORWARD TO FREO FESTIVAL 2017

It does appear that our mayor  dreamt that a  lot of banana shaped curves, draped artistically on the walls of the West End buildings, would serve the city well. 

Thus the dream of Brad and Felice the Artist came to fruition (fruit being the operative word). The High Street was decorated with banana peel look-alike graphics. It worked and the world woke up to the dream.

Sadly, or at least amusingly, the artwork is refusing to leave us and true to the legend, going a little mouldy. It’s now supplying endless entertainment. It is, as the mayor likes to expound – a sustainable dream come true. 

MISSING: PAINT STRIPPER AND AN  ELECTRIC DILDO

Those of us who have been around since well before the last rains know the original recipe for the Mellow Yellow bananas didn’t work too well. 

A modified version was derived using Dichloromethane injected into the bananas. It apparently worked wonders. But here’s the real rub – Dichloromethane is  nothing more than paint stripper! Had the Mayor used an up-dated recipe for the idea in the first place maybe the art would disappear immediately, just like any other hallucinogen. (I’m not sure up-dated is the right word)

Of course it doesn’t end there. Donovan did at one time confess he’d heard an electric banana is a yellow, battery powered, dildo. 

The mind boggles but there may be enough of them in the sex shop in High Street to supply council members with a few to strip paint, or whatever moves their fancy. I didn’t use ‘up-dated’ in this paragraph but was tempted.

Here are the lyrics to Mellow Yellow. Maybe they can sing along to them while they work and dream.

MELLOW YELLOW (Written by © Donovan Leith, circa 1965)

I’m just mad about Saffron

Saffron’s mad about me

I’m just mad about Saffron

She’s just mad about me

They call me mellow yellow

(Quite rightly)

They call me mellow yellow

(Quite rightly)

They call me mellow yellow

I’m just mad about Fourteen

Fourteen’s mad about me

I’m just mad about Fourteen

She’s just mad about me

They call me mellow yellow

They call me mellow yellow

(Quite rightly)

They call me mellow yellow

Born high forever to fly

Wind velocity nil

Wanna high forever to fly

If you want your cup I will fill

They call me mellow yellow

(Quite rightly)

They call me mellow yellow

(Quite rightly)

They call me mellow yellow

Electrical banana

Is gonna be a sudden craze

Electrical banana

Is bound to be the very next phase

They call me mellow yellow

(Quite rightly)

They call me mellow yellow

(Quite rightly)

They call me mellow yellow

Saffron, yeah

I’m just mad about her

I’m just mad about Saffron

She’s just mad about me

They call me mellow yellow

(Quite rightly)

They call me mellow yellow

(Quite rightly)

They call me mellow yellow

Roger Garwood

Editor: <editorbackchat@gmail.com

SPIN CITY

SPIN CITY: $650,000 BUDGET FOR PUBLIC RELATIONS
Fremantle journalist Carmelo Amalfi has revealed Fremantle Council has so far spent $650,000 on a public relations campaign.
Ratepayers Face Conflicting Evidence of Visitor Numbers
The Mayor, Dr Brad Pettitt, paraphrasing spin from Sirona, stated in late September that Fremantle has 1,600,000 tourists per year.
He claims this will increase to 3,000,000 when the Myer makeover is completed but quickly contradicted himself, announcing the Fremantle Festival Parade will be cancelled because visitor numbers are not high enough.
The parade will be replaced by a shopping trolley race to held in King’s Square to raise money for charity. There should be no shortage of competitors. Within fifty metres of the mayor’s office there are enough homeless people using shopping trolleys to harness their belongings in their shopping trollies and head for the starting line.
On the 5th October the Mayor quoted conflicting visitor numbers. These show that in the financial years of 2015-2016 and 2016-2017 visitor figures were a little short of 1.3 million per year, 300,000 less than figure of 1.6m Dr Pettitt had previously quoted which he said were obtained from the Department of Tourism.
The Mayors latest statistics show the Festival period of November has a very high visitor rating, only marginally  lower  than the Christmas and Easter holiday periods.
So why cancel the Festival Parade which has been the highlight of the annual ten day festival for 20 years?
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Homeless and in sight of the Mayor’s office. This person was camped here for weeks and  then the election campaign got into gear. It appears that he has found a home or was moved on by Fremantle Council’s security squad. In the past few days a lot of people seem to have been ‘moved along’. In defence of the security detail it must be said they operate with a great deal of tact and understanding but they are only a band aid solution.

EMERGING DYSTOPIAN SOCIETY
It’s not difficult to spot the city’s emerging dystopian society. Retail trade in the West End is collapsing. Within a stone’s throw of the Town Hall, where rents for a medium size retail outlet are as high as $240,000, homeless people sleep in the empty doorways. Of course the problem is solved easily – move them on. We now have a security team recruited by council to clean up the streets, moving less than fortunate people away. Out of sight, out of mind! A band aid solution for an increasing problem and a clear sign of a city in crisis.
While this is happening Spin City HQ is in full swing. The council are reportedly burning a budget in excess of $650,000 to try and make the Magic Pudding rise. Coincidently this feel good spin is happening during the lead up to an election where challengers to the Koolaid Council, followers of The Cult Of Brad, are fighting for seats and salaries Fremantle ratepayers are funding the spin campaign.
THE ONE EYED MAN IS KING
We’re told that the Myer makeover will see Fremantle’s economy rise, Phoenix like, from the ashes of an eight year autocracy.
The Mayor is commendably one eyed about the city’s future. But in the land of the blind the one eyed man is king. There is also  a biblical saying: ” When a blind man bears the standard, pity those who follow.”

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The CBD’s latest victim closed last week

FINANCIAL GOAL POSTS MOVED IN A SMOKE AND MIRRORS ACT
The city’s overbearing spin has sparse factual substance but when the financial facts related to the King’s Square development were exposed by financial expert Martin Lee and City Ward candidate Claudia Green, they were brushed under the carpet. Those facts, based on figures obtained from council, show Fremantle faces a  financial collapse leaving ratepayers to fill a black hole of up to $50,000,000.
This financial collapse was recently endorsed by the Minister who stated Fremantle is a city at financial risk. Fremantle had the worst financial rating on the State’s Local Government website.
Fremantle Council claimed that was not the case explaining they had moved the goal posts in the accounting system, hence the poor showing of 42 points in a statewide list of councils’ finances. 70 points is the benchmark for good financial health.
Within a fee days the goal posts were moved again. Fremantle now has a rating of 85! Questions must be asked about how this smoke and mirrors act came about.
Was the Minister mislead, were Treasury so incompetent they misread the city’s accounts? Did all ratepayers  come down with the last shower and believe this overnight turnaround? Was there a moment of panic in the Mayor’s office?
LIPSTICK ON A PIG
The Myer makeover materialised from an architectural competition and is described in Spin City’s publicity as world class. It is not. It is simply putting lipstick on a pig. The style is a Neo Lavatorial throwback to the 60s similar to that used in the  in the east end of the city. That too was promised to be a miracle trading area for the city. The area is now little more than a third world eyesore with a promised hotel development put on hold and becoming a temporary car park. The new Woolworth’s site, next to St Patrick’s, which we were told would bring life to the east end of the city, is closed after a few years of trading. At least 80 retail and business premises are now visibly vacant in Fremantle’s CBD alone.  The total is probably over 100.
OUTSIDE FORCES BLAMED WITH SMOKE AND MIRRORS SPIN
Outside forces are blamed: the GFC; mining boom collapse; State Government finances et al. Yet other shires flourish while operating under identical state, national and international burdens.
What we are getting is more Spin. Smoke and mirrors distractions: Australia Day; plastic bags; charity collection pillars; speed humps; shopping trolly derby; ‘Yes’ vote. Non of these issues address the core problems facing the city and the spin bait seems to be swallowed hook line and sinker by every member of council.
Does council really need a new administration building? The old one seems to have worn quite well and bears a striking resemblance to the Myer makeover, a carry over from ’60s style architecture. The market in Kings Square has not succeeded in attracting visitors and there is no reason to assume that the glossy spin from Sirona will be any more successful. These lifestyle promotions can result in spectacular failures. An example is the Docklands development in Melbourne which now has retailers and restauranteurs walking away from their leases and apartment owners saying ‘this is not the lifestyle we were promised’.

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Fremantle’s existing  administration building would benefit from a coat of paint and a flashy new market piazza . We could save $50,000,000 using little more than a paint pot.

$1.3 BILLION INVESTMENT MANTRA : ONLY 20% HAPPENING
We are told that investments of $1.3 billion are progressing in the city. They are not. In fact they are nearly all stalled, put on hold. The only visible progress is Sirona’s where we’ll see concrete Botox slapped on Miss Piggy. That is less than 20% of the investments the Mayor claims are happening.
THE ASIAN CONNECTION
Sirona  is a  company with strong connections to  Alvarez and Marsal, a corporation specialising in turning sluggish areas into  sustainable growth. Are Sirona  a pimple on the back of a massive overseas corporation and can we expect to see a sell out? In that respect council have helped  by selling assets at bargain basement prices to Sirona.  Many of the ratepayers’ assets at well below market value. We can be 100% certain that the real winners will be the developers. Who negotiated that deal?

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Homeless on Monument Hill. A number of people have been sleeping here recently. Will this type of image become an epitaph to Fremantle’s once vibrant lifestyle and economy?


NOTE:
Dr Pettitt has been asked to clarify the visitor figures and has been asked whether there was any other reason the Festival Parade has been cancelled.

Roger Garwood

editorbackchat@gmail.com

SUNSET: CONCERT CASH WENT INTO BACKPACKS

SUNSET’S EVENTS : CONCERT CASH FILLED BACKPACKS : PARLIAMENTARY INQUIRY INTO EVENT FAILURE : AUDITED ACCOUNTS : CONFIDENTIAL REPORT INTO CONFLICTS OF INTEREST
A music industry insider has informed Fremantle Backchat that within Sunset’s Business structures it was normal practice to sell surplus tickets at entry gates for cash. Most entry tickets were sold online through booking agencies but it is estimated as many as 2000 tickets, normally available to events online, may have remained unsold. Depending on the event these were sold for cash at prices of “$120 to $150”.
As cash registers filled a Sunset director, James Legge, “would empty them, putting the money into a backpack. As the tills refilled he would return and empty them into the backpack again”.
Fremantle Backchat’s informant explained that, if there were people still waiting to gain entry when tickets were sold out, Sunset’s volunteer workers were instructed to recover ticket stubs from waste bins. The tickets were then recycled “restamped” and sold again. It was impossible to know exactly how many cash tickets were sold but “anything from 1000 to 2000” was estimated.
This indicates that within the directors’ matrix of companies there could have been cash sales of $120,000 to $300,000 at any particular event.
It is not illegal to sell goods and services for cash but it is unknown whether all of the cash  collected at events went ‘through the books’ or was kept aside, possibly to avoid being used to pay creditors. Sunset has recently attempted to negotiate settlements with creditors.
Fremantle Backchat has been supplied with information which indicates the Sunset directors are secured creditors. This would mean that before other creditors are paid the directors have first call on funds.
PARLIAMENTARY INQUIRY INTO EVENTS FAILURE
In September 2011 a parliamentary inquiry was held into the dealings of One Movement Pty Ltd, Sunset Events and the three directors with Events Corp, part of Western Australian Tourism Commission. One movement had been sponsored by Events Corp for a series of three events which  failed financially.
‘Sunset’ has become an umbrella term which covers a matrix of companies. Each company ran events controlled by the three directors, David Chitty, Andrew Chernov and James Legge, each registered with ASIC as individual one dollar companies.
In summary it was proposed by the three directors that One Movement Pty Ltd should host an event in Perth each year for three years. The event was managed by Sunset Events, in itself a partnership operated by the three directors.
The events were planned for 2009, 2010, 2011 and involved agreed sponsorship by Events Corp of nearly $3m. The event of 2009, the first in the planned series of three,  did not meet expectations. Audited accounts of One Movement Pty Ltd showed sponsorship of $1,683,035 which included State Government sponsorship of $995,500.
Ticket sales were recorded in the company audit at $134,893 online and $23,023 in cash
AUDITED ACCOUNTS OF ONE MOVEMENT PTY LTD
The audited accounts of One Movement Pty Ltd, for an 18 month period ending on 31st December 2009, were submitted and reveal a net loss of $1,361,439.
Expenditure showed administration costs Of $202,667 and consultants’ fees of 364,083 were paid. It is not known who the administrators or consultants were but it may be reasonable to assume they may have been one or more of the three company directors. During the inquiry the directors claimed $400,000 was spent on due diligence at the event’s planning stage.
(A link to the audited accounts is shown at the end of this article)
It is reasonable to conclude that, in spite of $400,000 claimed to have been spent on due diligence, which presumably included calculations related to adverting and sales, the company did not follow its own research advice. Did they spend as little as possible to ensure the event’s attendance reached expectations?
A final report was made to Parliament in December 2011 (see link below). The report included many observations, among them:
“Total revenue was approximately $1.26m below that budgeted, with the largest variance being ticket sales which was $908k below that budgeted”.
The report continues “Total expenses were approximately $47,485 below that budgeted with the largest variance attributable to marketing expenses”.
The audited reported, under the heading “Emphasis of Matters Regarding Going Concern” said “One Movement Pty Ltd has a deficiency of Working capital and a deficiency of net assets of $1,361,588.  The liabilities of the company include borrowings from Sunset Events which is related to equity. The owner directors have pledged their ongoing financial support for One Movement Pty Ltd”
The Parliamentary Report said “The Committee views the Auditor’s “Emphasis of Matter” as significant”. (see Note below)
The Committee cast doubt on the liquidity of One Movement Pty Ltd, spoke of the considerable financial distress shown in the financial statement and outlined the directors’ explanation of delays in paying creditors. The auditors said: “This situation indicates the existence of material uncertainly that may cast significant doubt on the companies ability to continue as a going concern and therefore the company may be unable to realise assets and discharge its liabilities in the normal course of business. The financial report does not fully disclose this fact.”
One Movement Pty Ltd ceased trading on September 5th 2011.
CONFIDENTIAL REPORT : CONFLICT OF INTEREST WITHIN EVENTS CORP
In a separate report into matters surrounding government sponsorship of events, questions were raised in relation to a manager within Events Corp resulting in the Report on Allegations of a Conflict of Interest Involving a Tourism WA Employee and the One Movement Music Festival.
The report is relevant as a number of Fremantle City Councillors have expressed a conflict of interest in relation to Sunset Events.
There were several conclusions in Commissioner Wauchope’s report to the acting CEO of Tourism WA.
The principal conclusion was:
“There was both an actual and perceived conflict of interest … This presented a situation which raised competing interests and a perception that there was the potential for the individual concerned and or Sunset Events to receive an unfair advantage”
(Fremantle Backchat has a copy of the confidential report).

THE PUBLIC HAS A RIGHT TO KNOW

A 21 year was lease awarded to Sunset by Fremantle Council Chamber in the face of considerable public opposition. It seems reasonable to ask Council’s Administration to reveal what due diligence was conducted into the Sunset matrix of companies in relation to the application for the lease at Unit 1 J Shed. Fremantle ratepayers are subsidising the lease.

Did Council Administration have knowledge of these Parliamentary Reports, transcripts, financial statements and reports related to conflicts of interest?

If they did how much information was relayed to councillors and/or were complete reports made available to them?

If these reports were relayed to councillors did evidence of systemic failures within Sunset Events and government departments influence councillors decisions?
NOTE : Emphasis of Matter paragraph (EMP) has been defined in International Standards on Auditing (ISAs) as follows:
A paragraph included in the auditor’s report that refers to a matter appropriately presented or disclosed in the financial statements that, in the auditor’s judgment, is of such importance that it is fundamental to users’ understanding of the financial statements.
LINKS:
One Movement Pty Ltd Audit:
http://www.parliament.wa.gov.au/publications/tabledpapers.nsf/displaypaper/3813489a0c12182a799c6d77482578b6004e0f55/$file/3489.pdf
Inquiry into WA Tourism Commission/One Movement:
http://www.parliament.wa.gov.au/parliament%5Ccommit.nsf/(Report+Lookup+by+Com+ID)/822360D9A7CAF4CB482579590024EFD4/$file/ef.mte.111201.rpf.035.xx.pdf

Roger Garwood

editorbackchat @gmail.com

 

AUSTRALIA DAY CHANGE: NO 79%, YES 17%, DUNNO 3%

 

Australian Associated Press have reported that the Australian Local Governments Association (ALGA), gathering in Canberra, has today (Tuesday) voted 64-62  for councils to consider efforts they could take to lobby the government for a date change for Australia Day.

A statement issued by ALGA said: “The ALGA board noted the level of debate and the closeness of the result of the debate and will take these matters into consideration when determining a course of action.”

Of 560 local councils represented by ALGA only 126 were at the Canberra meeting. This leaves room for doubt as to an overall opinion of councils’ for a change of date for Australia Day.

VOTE COULD BECOME AN ELECTION BATTLE GROUND

The vote by the local councils represented by ALGA at the meeting was close but an online poll published today shows nearly 78.87% of the population do not want change, 18.44% do and 2.69% are undecided.

Fremantle Council initiated a change and the national debate this year. With local council elections due in October the issue of a change of date could become a campaign point for voters to consider.

Roger Garwood
editorbackchat@gmail.com