Light falls on tenders in a dark, not stormy, night

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IN ROSEBUD, “a dark and stormy night” was threatening. This, the much-derided first sentence of the 1830 novel  Paul Clifford was apt, even though this night was merely dark, pre-meeting. The popular English novelist Edward Bulwer-Lytton followed up his opening purple prose with this: the violent wind was “fiercely agitating the scanty flame of the lamps that struggled against the darkness”. Phew! We had Neons.

That’s winter on the Mornington Peninsula, too, the cold darkness exacerbated by a distinct lack of biscuits for those warming their frozen fingers on a cuppa before the meeting.

But CW digresses, and will digress a moment more, on a subject that came up at the previous council meeting – repayment of a $10.45 million unfunded super loan.

Regular readers may recall the debate that raged about whether this should be repaid over three years or a decade. Dire warnings were issued by advocates of the longer repayment. We’d all be rooned, one councillor not named Hanrahan warned. Another hinted at conspiracy. A third case was put at a decibel level favoured by teens with earplugs attached to iPods.

So, which was the cheapest way to repay the money? CW resorted to Money-Zine on the internet. Here is what it calculated:

  • Over three years at six per cent (about current shire interest on loans) the total repayment would be $11,444,732.87 – never forget the cents – for total interest of $994,732.87, or $331,577.49 interest a year for three years.
  • Over 10 years at six per cent, $13,921,970.94 would be repaid, for interest of $3,471,970.94. That is $347,197.09 annual interest for a decade – about $15,500 a year more but extending for the full 10 years.

I rest my case, m’Lud. Repayment over three years was the right decision – assuming Money-Zine’s loan amortisation calculator can be trusted.

A last word on this: neither CW nor some of the gallery regulars could recall staff bringing a rescission motion to the council chamber, aiming to overturn a decision made by councillors voting in the community’s parliament. It was not a good look: it should not have occurred, we agreed.

End of digression. The meeting on 11 May featured a petition from 21 supporters of the contentious RACV Club development plan at Cape Schanck, followed by questions from Cape Schanck residents – warned by the agenda of this petition – returning serve with some ferocity, raising such matters as a large increase in vehicle movements that will result from the huge development.

A tender for the Balnarring Recreation Reserve master plan excited some interest, possibly related to what someone had described as the “Rolls-Royce” ablutions block to be built at Mothers Beach, Mornington, at a cost of some half a million dollars by the successful tenderer.

Dromana resident Ron Musgrove stated in a recent letter to the editor of this newspaper that the winning tender was “$83,000 a seat” for six toilets and two outside showers. Shire staff told him “it is going to be a lovely building”, he wrote.

“The building,” Mr Musgrove wrote. “has got to be smaller than a family home. How the hell does it cost half a million?”

Many shire residents might echo that question. Certainly the Balnarring proposal drew questions on the shire tendering process, which attracted companies from as far afield as Eltham, Hoppers Crossing and Sunshine. Oh, and Dromana, too, home base of Maw Civil Pty Ltd, which won the work with a price of “$469,081.50 (excluding GST)”. Never forget the cents!

No toilet block is mentioned in the tender, except one to be demolished. The work includes building three netball courts, moving cricket nets, a car park, drainage and “other associated works”.

Officers were closely questioned about how the tender procedure works. The iPRO Live system, staff said, is a contractor registration system including financial checks of tendering companies – including “if they’re going to go into bankruptcy” – any legal matters, WorkCover claims, any other matters against which the shire needs safeguards.

And so on. But what do we know about the provider of the information, officers were asked. The response to that was also reassuring.

Cost estimates have been on CW’s mind, involving a far humbler project. A quote of around $60,000 that came in to the shire was seen by a retiree very experienced in evaluating such jobs. Haggling and horse trading ensued, resulting in the quoted priced being almost halved.

Another highly experienced semi-retired person in the same field said that often companies with a full book of work would put in a tender price “a bit over the top” for a job, not really expecting to win but very happy if they did. Holidays in Tuscany all round.

Perhaps the shire could examine ways to take advantage of all the skills lying idle around our idyllic villages. A wealth of experience is playing golf and meeting cobbers for coffee day in day out. The Devil invented golf for idle hands.

CW once did work for the Certified Practising Accountants and wishes he had kept a copy of an article written when compulsory competitive tendering was imposed on councils. The article predicted two things would occur.

First, that over time council officers would lose their practical expertise and close knowledge of road building, rubbish collecting and so on, and second, private tenderers would grow large locally and globally and councils would be left with no option but to decide work on price – possibly prices decided in foreign capitals.

Do the names Veiola and Transurban ring a bell?

First published in the Mornington News – 19 May 2015

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