Councillors! Stand against officer recommendation
City of Greater Bendigo councillors have now received not one but two independent financial reports on the cost of paying a conservative $80 million rent in a GovHub building that will cost $90 million to build if they vote for the scheme.
The reports were sent to councillors this morning by the Bendigo Alliance in time for their confidential briefing today ahead of Wednesday evening's council vote on the officer's recommendation to have Bendigo go from landlord to tenant.
Councillors were told:
The two calculations were prepared by an appropriately qualified professional and a concerned businessman. One was commissioned by Bendigo Alliance and the other unsolicited but forwarded to us. Both independent of each other.
We at Bendigo Alliance believe the reports are realistic and could be understating the rental.
Before you as a Councillor vote on the officer recommendation listed on Page 38 of the 20 May 2020 Agenda, you must seriously consider the report content and note particularly how the $2.2 and $2.4 million rentals was arrived at; then compare those figures with the rental you should have been advised council will pay.
We also identify that the costs identified in the Council Agenda and the two scenarios above do not include outgoings associated with a Commercial Lease; this adds even more dollars to the overall ratepayer burden. On top of all this the Government intends to get a dividend from any future sale of the GovHub.
As a concerned group of residents, we have come to the conclusion that building new Council owned offices or extending what Council currently has, can be accommodated easily by current low-cost borrowings and would have a lesser impact on future costs and ratepayers, particularly if the proposed expensive rental arrangements for the lease are in the order identified in the attachments. To do otherwise would be irresponsible and takes away Council’s Independence.
The COVID-19 pandemic has changed reality for now and into the future. Now is not the time to make a long-term office decision. Everything we read in recent weeks suggests strongly that Hot Desks or Open Office Space is not the way forward, and that many staff working from home maybe the norm and best for OH&S and productivity.
A quote: The zeal for a new definition of the traditional office is driven in part by the shrinking economy, as companies look for new ways to cut costs during a downturn that is expected to be the worst since the Great Depression. Many executives also point to the success of an unprecedented work-from-home experiment, and how little productivity appears to have been impacted after millions of employees in technology, media, finance and other industries have been forced to work remotely for months.
“I mean, if you’d said three months ago that 90% of our employees will be working from home and the firm would be functioning fine, I’d say that is a test I’m not prepared to take because the downside of being wrong on that is massive,” said Morgan Stanley Chief Executive James Gorman in mid-April on the bank’s earnings call.
There has been a period of enforced experimentation and adoption of new business practices. Some of those practices will end with the end of lock-down, but others might not and will not. The adoption of the digital economy has been accelerated by about 10 years.
We support the building of a GovHub by the Government, but without council as a tenant. Government can construct a GovHub on Crown Land (like Ballarat) and improve the deal of new jobs currently offered to Bendigo.
Somehow Greater Bendigo is being steered into a soft deal. Do not be lulled by the claimed knock-on economic benefits to Greater Bendigo from the proposed deal. Ballarat’s arrangements of a government only GovHub on Crown land and 600 new jobs leaves Ballarat more than $1 billion dollars better off than Bendigo over ten years.
Please do not have us believe that we should not compare Bendigo’s deal with Ballarat’s. You are all elected to get the best deal for Greater Bendigo, and Ballarat’s deal shows Greater Bendigo is being duped and dudded.
We are deeply concerned about the statement on Page 44 of the Agenda: Council could choose not to approve the sale of land to Development Victoria or to not approve to enter a lease with the Department of Treasury and Finance. Either of these decisions would impact the ability of the project to meet its intended deadline and could potentially lead to the project no longer progressing.
In this instance, it is likely that Council staff currently working from temporary accommodation would need to return to the current offices in Lyttleton Terrace. This claim is nothing other than blatant officer and government coercion.
What it shows is the CEO overstepped his authority and prematurely committed staff to costly leased office space prior to any Council’s 20 May decision. Do not be bluffed into thinking the government would walk away from building a GovHub, it has six other potential sites, and if did not proceed to consolidate government officers (admittedly with say a year’s delay) then the project was not as important as claimed, saving taxpayers millions.
Claims that the proposed GovHub will reinvigorate the CBD are not supported by fact and have been made without the necessary evidence supporting such claims. Without the release of supporting evidence, we and many of your constituents are not convinced that building the GovHub on the Lyttleton Terrace site will have the desired effect the administration has claimed. What we do know is that the businesses in the suburbs where the government officers are being drawn from will be severely affected financially.
Please also understand the above, and other genuine concerns we have presented to you in the past show that this inappropriate superficially pretty CBD co-location project has too many financial boobytraps and delivers missed opportunities. Further, Greater Bendigo residents have been locked out of the information and decision-making processes.
As a councillor you must understand, just as the Independent Review 2013 Final Report recognised, “… councillors represent and advocate for their constituents …”, and the CEO and administration do not face that responsibility or the accountability of the public vote.
Therefore, advocate and represent the overwhelming majority of residents who oppose the project, and not just those within council’s social connections or who are beholding to council. The only polling (over 700 sample) we have seen point to over 80 percent of respondents are against the Govhub.
An even better approach would be to hold off on any vote until after the council elections due in October, and let the people decide whether or not Council has overwhelming support for the property sale and a co-location GovHub as some councillors have claimed.
Another way to look at all this is there are too many unknowns. For the best decision it’s time to hold-off; research, reflect, and then decide when the pandemic is clarified and the nation’s and council’s financial matters are clearer.
We look to you to vote against the officer recommendations.