WA local government minister Tony Simpson has been asked in parliament whether Fremantle council’s business plan for Kings Square stacks up.
Willagee Labor MP Peter Tinley posed a series of questions asking the minister if he was “aware of community concerns over how the City of Fremantle has represented the implications of their $45 million investment of ratepayer funds in its Kings Square business plan”.
The questions were sparked by Martin Lee, a commercial adviser with civil engineering and economics degrees who’d stumbled across the business plan while researching parking policies.
Mr Lee has gone through the business plan with a fine-toothed comb and says it’s full of feel-good statements but he can’t make the numbers add up (see his Thinking Allowed article on page 5).
Mr Lee’s assessment was seized on by the Fremantle Residents and Ratepayers Association which teed up Mr Tinley to present the questions.
Mr Lee says the business plan claims a positive net present value (NVP) of $4.15 million, but when he ran it through his modeling it came out as a $30 million loss.
He says he asked the council to explain how it arrived at the $4.15m, but all he’s got back is “enough material to write a whole new series of Yes, Prime Minister which doesn’t answer his question.
Mr Lee says the council’s approach to the sale of its properties to Sirona and redevelopment of Kings Square is contrary to its investment policy, but acknowledges there are provisions for the elected council to over-ride the guidelines, which it’s done. He’s concerned the council is effectively raiding its reserves and investment accounts, built up over generations, leaving little for future councils.
He says he suspects the council arrived at the positive NVP by valuing Kings Square and the new admin building at $97m, but says that’s a furphy because it’s not a value the council could ever recoup.
The Herald also noticed that as a result of selling two car parks and the Queensgate building to Sirona, the council will effectively lose $1.3m in revenue each year. The business plan doesn’t mention how the council will make up the shortfall.
Council corporate services chief Glen Dougall says it’s been factored in.
“The decrease in revenues from rents for the duration of the project have been factored into the long-term financial plan for the City of Fremantle and does not show any above-average rate increase during the period.”
Mayor Brad Pettitt says Mr Tinley’s questions have previously been put directly to the council and a comprehensive response provided.
“No alarm bells are ringing for me,” Dr Pettitt told the Herald.
by STEVE GRANT