Fremantle CEO Clanger Round 2 ?

Wow, can u imagine a bigger spun scenario than what we see on the city of Fremantle’s website today?

These questions have been asked since OCTOBER 2104. Now all of a sudden, after months of questions from residents, questions in parliament, dozens of blogs pages, letters to the editors, thinking allowed pieces, spun promo pieces on TV, coverage in both local papers, articles in business papers, etc, the city of Fremantle have posted a response to the questions raised. The same day the minister for Local Government has released his response to questions asked in parliament  by Peter Tinley for the residents of Fremantle, whoah imagine that coincidence?

What the city of Fremantle has failed yet again to do is publish the questions asked, its great they publish a response to the questions asked, but does it really address the questions that where actually asked?

The business plan its self is hard enough to read to make sense how they got to their NPV, the response they have just given, isn’t any better.

The only things I got from the response which is nothing new, is that the delay is coming from lack of interest in attracting a mayor tenant.

  • The city is not answering the questions asked?
  • The city needs to revitalize the CBD and is struggling to it?
  • We are losing a fair amount of revenue from the queensgate centre sitting mostly empty?
  • The city must be putting allot of effort into the spin needed to drive along this process,  i wonder how much this is costing the city?
  • I see on blogs now that its the residents who are to blame for asking a question of the COF, instead of driving the department for housing to come to freo, is that clear, no, i didn’t get it either. Perhaps if the city was transparent the residents wouldn’t need to keep asking the same questions over and over again or for a real novelty actually answer the questions asked, could u imagine?
  • Whats really amazing is that the city thought it more important to pander to a paper, whats more important than having some basic respect for the resident who first asked the questions, imagine putting PR ahead of common decency or putting first the rate payers and residents they are paid to represent, classic?
  • Where did the $97million figure come from as that seems rather critical in forming a position for the NPV, who’s figure is it?
  • Then again if they sent him their response maybe his first comment would be wheres the answers?

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  1. Martin says:

    Good points Mark. I guess we have made a little progress. The COF has finally admitted that it used the A$97.5 million “retained asset value” assumption to fudge a negative A$30 million NPV into a positive A$4 million NPV, as predicted. Imagine how accountants around the world must be asking themselves how they have got it wrong for a hundred years! Buildings don’t depreciate after all. Wow! The ATO is going to have to rewrite the Master Tax Guides. According to the Freo CEO, buildings (bricks and mortar) appreciate over time. This is truly ground breaking. I think there must be a Nobel Prize for Economics heading to the southern hemisphere very soon. In fact, if the Council wants to make lots of money for its rate payers, just let the budget blow out at construction time – the more rate payers money they spend on this project the bigger the retained asset value in 20 years time!!! Excellent! However, in the Kings Square Business Plan our Mayor and CEO then tell us that the Queensgate building is worth zero. Land value only. The existing Council buildings (the ones we are knocking down and rebuilding) are also said to be worth zero. How can they be worth zero if buildings appreciate (according to our CEO and Mayor) over time. Following their own logic, these buildings should be worth squillions! So which is it? You decide. Then comes the important question: Where does the A$97.5 million assumption come from? Interestingly, there are more than 3 pages of assumptions listed in the Kings Square Business Plan, but the A$97.5 million is not mentioned anywhere. In fact this assumptions is not discussed anywhere. What is it based on – not mentioned. The CEO and Mayor were so keen to hide this assumption that they have actually pretended that it is not an assumption at all. They have actually listed it as a “key financial outcome” of the analysis in the results table, alongside the NPV and IRR! What? So back to the important question… Did the A$97.5 million come from Leedwell or was it fabricated by the Mayor and CEO? Is the A$97.5 million included in the Leedwell Business Case or not? The Mayor and CEO will have us all believe it came from Leedwell, but where did it really come from?

    • I think it must be a made up figure. The Mayor has been pushing for Fremantle to be a “$100 million dollar a year Council” for sometime, as if that makes us important in some way. It’s kind of like small mans syndrome. With Fremantle having such a low rate base, wringing out the plebs, sorry ratepayers, for everything you can get has become the norm.

      Maybe between brushing his hair, smiling at the mirror and telling himself how cool he is, getting his photo taken and putting on his scarf in the morning, he mixed up that goal we are all supposed to feel wonderful about and the real figure.

      Or he knows what the figure is and they have concealed it deliberately from the ratepayers.

      Make no mistake, the CEO is a reasonably clever accountant, which makes this whole farce, even more farcical.

      My understanding of real estate was that value is obtained according to land + improvements. But we all know its all about what someone is prepared to pay for it and the other party is willing to sell it for. Unfortunately the Mayor and CEO have been sold, potentially at a loss, only to reinvest that money into a bigger loss, the “new” Council Chambers. All they have to do is devise a method of explaining it and getting it through.

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