Yes it's long, but read it anyway

Our apologies in advance to the commenter who pleaded for shorter posts. Our fingers have been worn to stubs these past few days, but such is the puffing of smoke and flashing of mirrors emanating from Guyton Street as the LTCCP comment process heads into the final straight that some depth of analysis is called for. A number of commenters have disputed our attitude toward Council borrowing and spending (particularly on the Splash Centre). We can't answer them all point-by-point as it'd take more words than anyone would be prepared to read.

But most have a similar refrain, and someone calling him (or her) self "an ordinary plod" made a comment in response to the last post which seems to pretty much cover most it, so we'll respond to that point-by-point.

Like most of your analyses LawsWatch - this latest effort is flawed on a number of levels. I note that you don't publish postings about your stuff-ups but here goes anyway. All the below info is from publicly available sources either council agendas or minutes or Chronicle reports.

And of course everything published on the Council website (direct from Mickey's spin) and in the Chron (re-hashes of Spin Fairy press releases) is beyond reproach. We don't claim to be perfect, just more accurate than that litany of obfuscation. Mr/s Plod continues:

The new Splash Centre will have no additional operational expenses for ratepayers so Palmer is wrong. If he uses that logic then no wonder he was turfed off council in '04.

Let's start by defining the size of the problem. Keith Hindson reported to Council on Monday 12 September 2005 that operating costs would increase by between $300,000 and $525,000 (at 2004/05 prices) in addition to the Centre's current funding of $342,000 per annum.

Then, at the Community Committee meeting on 7 December 2005 Denis McGowan, Danny Jonas and Eric Sim informed councillors that "overall operating cost if the proposed development proceeded would be 147% of the current cost, leading to a projected community facility’s charge for each ratepayer under Swimming Pools of $57.25". In other words, a rates increase.

Then at the Strategy Committee meeting on 15 December 2005 received a further report which informed them that:

The current cost to the Council for the Splash Centre is $334,000 per annum. This includes the management contract, repairs and maintenance, associated property costs and interest payments etc. The forecast cost to the Council to operate the original pool and new extension in today’s dollars is $825,000. This includes $100,000 of interest repayments on the $1,500,000 capital funding identified in the Long-term Council Community Plan (LTCCP), a doubling of the property and maintenance costs as the facility will double in size. The management contract would rise from the current $243,000 to $556,000... An allowance has been included in the LTCCP for increases in operational expenditure in 2006/07, however there is still a shortfall of $329,000 which needs to be addressed.

So will people such as Mr/s "Ordinary Plod" flock to the Splash Centre in sufficient numbers to make up this shortfall? Council's own report doesn't know, and predicts the possibility of increased entry charges:

The projected increase in patronage is 50%. However, Sport and Recreation Wanganui are targeting a 100% to 120% increase in patronage as new markets become available. It must be noted that these forecasts are based on the existing entry fees. Increases in entry charges have not been considered at this stage, but it is a decision the Council may need to consider in the future as means of reducing the Council contribution towards the operational cost of the facility.

Let's pause to recap, to help those who are daunted by long posts such as this:

1. Operating costs will rise from the current $334,000 per year to $825,000.
2. Council reports project the imposition of an additional community facility charge for each ratepayer of $57.25.
3. A further report predicts the possibility of increased user charges.

"No additional operational expenses for ratepayers", Mr/s Plod? Perhaps, perhaps not. Indeed the Diva seems to support your assertion, despite Council officers' professional advice to the contrary. According to a response on 29 April 2005 from Ian McGowan to a Watcher's enquiry :

Mayor Michael Laws says... additional operating expenses of the two major projects (i.e. the Sarjeant Gallery and Splash Centre Extensions) would need to be borne by the organisations responsible for running the facilities and not by the Council. Council's contribution is the capital funding and proponents of some projects may need to cut their cloth as a consequence.

But the Splash Centre isn't cutting it's cloth (or rather it's water slides). It's going with the full blown all-the-bells-and-whistles plan. And if there isn't going to be a $57.25 additional community facility charge once the new Centre is operational, then that will also have to be found by the Splash Centre.

So maybe ratepayers won't pay for it as ratepayers; instead they'll pay for it as swimmers. That makes all the difference. Unless they're detered by the increased user charges and stay away in droves, causing the Splash Centre to turn to Council...

Of course no one has actually made a decision on this, but we'll move forward anyway, and hope all is well. Yep, there's some fine fiscal rectitude for you.

And talking of decisions, let's move on to part 2 of Mr/s Plod's rebuttal:

If you're going to convert one asset to another (land into Splash extension) you haven't sold it but converted it from a land asset to a community asset. You could use that money to repay debt but then you'd build no new community amenities ever until all your debt was repaid and Wangas would stand still. I was one who voted in the referendum for Splash and I'm delighted it will be built and available to my kids as are most of my mates and neighbours. You obviously don't have kids or swim.

We do both, actually - well some of us do, and others do one or the other. But that's not the point.

First point: people weren't given the choice between debt repayment and the Splash Centre, because they were never asked whether debt repayment was a priority. The referendum was like offering a mordibly obese person a choice between cake and pavlova, not cake and a diet.

Second point: Asset sales equivalent to the cost of the project chosen in the referendum were meant to have been realised before the project proceeded. Our authority for that? None other than Michael Laws:

Mayor Laws... said that funding of referendum items would be based on the conversion of old Council assets to the new Council assets, therefore, for a referendum project to proceed the Council must first sell an asset to gain the funding required. (WDC Minutes 26 April 2005)

Third point: The people of Wanganui were meant to have been specifically consulted on asset sales before they occurred:

6. Asset Sales - Vision’s democracy policy ensures that the Wanganui public has the final say – by referendum – on all "issues of significance". That includes asset sales. No assets will be sold by the council without the prior consent of the Wanganui people.

Perhaps we missed that consultation? In case you're not even sure what these assets are, LawsWatch revealed in November 2005 that:

There are 48 properties listed for sale, across three portfolios and divestment funds may only be used as follows:

• City Freehold: pay off debt or reinvest in assets or services offering greater amenity value to the District.
• City Endowment Fund: all capital (divestment proceeds) must remain within the City Endowment and net income can be 'dividended' to Council or reinvested.
• Harbour Endowment; all capital (divestment proceeds) must remain within the Harbour Endowment. Net rental income is payable (effectively a negative rent) to River City Port Ltd under the terms of the company's lease from Council (as administrator of the Harbour Endowment) to be used for port operations.

So let's see if we can summarise what's wrong with the process:

1. The complete figures (which we've presented here over past months) ought to have been put in front of people in the referendum. Those figures, of course, would have included:
   
   • Rising construction costs
   • Increased debt servicing costs
   • Increased operating costs
   • The possibility of an increased community facility charge.
   • The possibility of increased user charges.
2. The option of debt repayment should have been offered as a referendum choice, with the benefits clearly enunciated.
3. If it was intended that the Splash centre be funded from asset sales, the specifics of such sales should have been put to that referendum or a prior one, in order to meet Vision's own policy pledge.
4. Assuming permission was granted by the people of Wanganui to sell specific assets, the value of those assets should have been realised before work commenced on the Splash Centre - after all, this is what the Diva pledged just over a year ago.

We're not picking on you, Mr/s Plod - in fact your contribution is well thought out and diverse views are always welcome. But your reliance on Mayoral spin and Chronicle "reportage" means you - along with most of the rest of Wanganui - aren't getting the true picture, and you're contributing to Mickey's disinformation campaign by spreading it.

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