Freo's View

CITY SAYS FREMANTLE FINANCIALLY SOUND

Posted in city of fremantle, economy, finances, local government, Uncategorized by freoview on January 11, 2020

 

The City of Fremantle commented on yesterday’s blog post about the City’s financial situation, so here it is:

Clarification of City of Fremantle audit report

The City of Fremantle has received an unqualified audit report from the Office of the Auditor General for the 2018-19 financial year, which means the Auditor General identified no concern in relation to the way the City presented its financial statements.

The Auditor General did identify an adverse trend in the City’s Operating Surplus Ratio. This was specifically as a result of the sales of 12 Josephson Street and Tappers St Mews, which did not realise their ‘book’ value.

12 Josephson Street was sold on the open market as part of a program to sell under-utilised assets and make them available for redevelopment. The sale of that property has paved the way for the development of Perth’s first timber-framed office building which will result in more people working, and hopefully living, in Fremantle, which in turn will mean more customers for local businesses and more rates revenue for the City.  

The Tappers St Mews property was sold to not-for-profit social housing provider Foundation Housing last year. A restriction on the title of the property prevented it from being sold for private purposes, and therefore at the private market rate.

The sale of the property for less than the private market rate will allow Foundation Housing to continue to operate the property as viable social housing, which delivers a significant social benefit to the Fremantle community.

As a consequence of these sales not achieving their book value the City recorded a non-cash loss result. The Operating Surplus Ratio was negatively impacted by these book losses.

In relation to the Operating Surplus Ratio, Department of Local Government guidelines recommend local governments maintain a surplus between 1 and 15 per cent, which would provide a buffer against unforeseen financial shocks. The City’s result was less than 1 per cent off this guideline.

The City of Fremantle has always maintained the view that it is not prepared to increase the impost on ratepayers to build a surplus that most likely won’t be called upon. The City prefers to manage any unforeseen financial events within its current budget parameters.

Unlike many other local governments, the City generates about 90 per cent of its revenue. We don’t rely on state government grants or other external sources of funding for operational activities so therefore we have greater control over our budget.

The City remains confident that it is in a sound financial cash position and will continue to manage provision of services to the community and its renewal agenda within current budget levels. To illustrate this, the cash position for year ending 30 June 2019 as per the rate setting statement was a surplus of just under $5 million.

 

Roel Loopers

SIGNIFICANT ADVERSE TREND IN FREMANTLE’S FINANCES

Posted in city of fremantle, economy, finances, local government, Uncategorized by freoview on January 10, 2020

 

I copy the below the City of Fremantle’s annual report audit from the agenda of the Fremantle Council committee meeting to be held on Monday the 13th of January.

SUMMARY

The audit of the City of Fremantle annual financial report for the year ending 30 June 2019 has been completed by the Office of the Auditor General (OAG) and Council has been provided with an independent auditor’s report.The City has received an unqualified audit report. In the opinion of the Auditor General the financial report of the City of Fremantle fairly represents the results of the operation of the City and its financial position for the year ending 30 June 2019. This report recommends that the independent auditor’s report be received and the audited financial report with full set of financial statements for the financial year ending 30 June 2019 be adopted

The concluding (exit) audit meeting took place on Thursday 5 December 2019 and was attended by Vince Turco and Efthalia Samaras from the Office of the Auditor General along with the Auditors from Moore Stephens, City of Fremantle Mayor, Acting Chief Executive Officer, Director City Business and Manager Finance.

At this meeting the Audit Concluding Memorandum was discussed. This report is attached for the Committee’s review as a confidential attachment, the key outcomes are: Recommended to the OAG to issue and unmodified opinion on the audit of the City’s financial report. Noted a significant adverse trend in the financial position of the City. The Operating Surplus Ratio has been below the Department Local Government, Sport and Cultural Industries (DLGSCI) threshold for the past 2 years, with the current year ratio also being below the previous year. Did not identify any non-trivial uncorrected audit differences or any significant deficiencies in internal controls.

CONSULTATION OFFICER COMMENT

Council has completed its annual financial statements for the year ended 30 June 2019 and received an unqualified audit report. The Auditor General has issued an independent auditors report.The City received an unqualified audit report.

In the opinion of the Auditor General the annual financial report of the City:(i)Is based on proper accounts and records; and(ii)Fairly represents, in all material respects, the results of the operations of the City for the year ended 30 June 2019 and its financial position at the end of that period in accordance with the Local Government Act 1995 (the Act)and, to the extent that they are not inconsistent with the Act, Australian Accounting Standards.

The independent auditor reported in their opinion the following material matter indicates a significant adverse trend in the financial position of the City: The Operating Surplus Ratio has been below the Department of Local Government, Sport and Cultural Industries standard for a second year, with the current year ratio also being below the previous year.The financial ratios are reported at Note 36 to the annual financial report on page 71.The DLGSCI operational guideline 18 on financial ratios defines the operating surplus ratio as a measure of a local government’s ability to cover its operational costs and have revenues available for capital funding or other purposes.

The guideline sets the basic standard as met with a ratio result between 0.01 and 0.15. An advanced standard is met with a ratio result above 0.15. The ratio results for the last 3 years have been: The adverse trend result for 30 June 19 was due to an additional $4m in one-off operating expenditure which reduced the overall net result (and therefore increased the operating deficit) made up of:1.Sale of Tapper St Mews –Loss on asset disposal of $2.43m2.

Fair value adjustment to assets held for resale 12 Holdsworth St and 12 Josephson St –Loss on fair value adjustment of $1.57m

By removing the above one-off items the adjusted operating surplus ratio for 30 June 19 would be (0.02), the same as the previous year.

The agenda is available on the City of Fremantle website

Roel Loopers

Comments Off on SIGNIFICANT ADVERSE TREND IN FREMANTLE’S FINANCES

FREMANTLE DOWN BUT NOT OUT!

 

walk 3

 

When things are down we have to remind ourselves of the good things as well, so I was thinking about the demise of Fremantle traders, the hardship of many retailers and the increasing vacancies of shops. Yep, we all know the problems are not unique to Fremantle and similar issues are happening in other parts of metropolitan Perth and WA,  but that does not help anyone.

What might be better for Fremantle though is to talk up our city’s uniqueness and achievements instead of having constant negativity in the news media, so I was thinking about all those iconic Freo traders who have been here seemingly ‘forever’.

I am sure my list is incomplete so please add all those long-term surviving traders I have overlooked.

The oldest shoe shop in metro Perth is Bodkin’s Bootery in Freo’s west end High Street, Bousfield and Warrens menswear have been here for as long as I know, and so has Ruocco’s pizza, the Capri, Culley’s, the news agency in the mall, Cicerello’s, Galati’s, Franks, the South Fremantle fish&chips.

Top that with the Sail&Anchor, National, Orient and Federal hotels, the Norfolk, Little Creatures and Newport, the Local and South Beach Hotel, the Tradeswind, Esplanade and Federal hotels, and the Fremantle Markets.

The Moore&Moore cafe has been open for more than ten years and so has the old Roma, that closed for a while but reopened. The Attic is still going well and so are Gino’s, Chalky’s, Picollo’s, and Duck Duck Bruce in Collie Street have been doing so well that they are opening a new second place in Bannister Street.

Kennedy’s the barber is also going well, and while Norm Wrightson’s will be closing  due to the Manning building development it has been THE iconic Freo barber for ages. And let’s not forget Bitches Brew the framers and art gallery, Kakula’s Sister,  and Japingka Gallery and Megan Salmon’s fashion shop.

The Manning building development with a new tavern, brewery and distillery will be great and so will be the Police&Justice complex tourist attraction with hotel, FOMO at Kings Square will offer a whole new shopping and hospitality experience, and a few new hotels  and residential apartment buildings will pop up in the centre of Freo over the next years as well

It might often feel as if Fremantle is on it’s knees but the fight is not over by a long way, and Freo people and traders know how to fight and the community knows how to support one another. We’ll get through these tough times by telling ourselves and others that Freo is a pretty outstanding place to visit, shop and live. We can do it Freo!

SHOP AND HAVE FUN IN FREO!

 

Roel Loopers

Comments Off on FREMANTLE DOWN BUT NOT OUT!

UNFAIR TO BLAME LOCAL COUNCILS FOR RETAIL DECLINE

 

Kings Square

 

It is rather hypocritical for Bill Marmion to berate Fremantle Council about economic development in his letter in the West Australian on Thursday. Has Mr Marmion forgotten that he was a minister in the Barnett government that created the biggest billions of dollars debt in the history of Western Australia?

Fremantle Council has in fact been proactive for ten years to start the economic recovery with encouraging developers to start building in the CBD, and that is happening with the LIV and Heirloom residential developments now occupied and with four hotels approved at the Woolstores shopping centre, the former Point Street carpark site, the Police&Justice complex and another one at the Warders Cottages next to Fremantle Markets. And the Kings Square Redevelopment Project is on track and will open in the first quarter of next year with a creative new retail concept called FOMO.

A new Destination Marketing campaign for Fremantle was launched two months ago, but retailers must adjust to the changing shopping trends instead of blaming local councils for the decline of retail. Some Freo traders still have boring window displays as if it’s the 1960s and refuse to modernise their shop fronts and customer service.

There is plenty of parking in Fremantle Bill Marmion with over 5,000 bays plus a new carpark coming on line next year in Parry Street.

The world changes, and while Fremantle Council is far from perfect and often frustrates me they are well ahead of other local councils in the economic rebirth game.

Roel Loopers

COMMITTEE FOR PERTH LATEST WA STATISTICS

 

Committee for Perth WA stats

The Committee for Perth released its latest Fact Sheet with this easy to read graphic.

Interesting to note that the huge state of Western Australia only has 10% of Australia’s population, so over-population is not something we have to greatly worry about here in the west.

While the unemployment rate is 6.3% in WA the forecast for employment growth is 2%, so let’s hope that will be at least the case as the nation’s average is 5%.

Roel Loopers

FREO’S ONE PLANET GREEN BUDGET

Posted in budget, city of fremantle, economy, environment, local government, Uncategorized by freoview on July 25, 2018

 

This will start the tongues wagging of those who are not happy with the ‘Greenies’ running the City of Fremantle. ; >)

This from the city on the budget:

The City of FremantIe is delivering on the One Planet Fremantle strategy through initiatives funded in its 2018-19 annual budget.

The centrepiece of the budget is the allocation of $46.3 million towards the construction of the City’s new administration building and library, as part of the broader Kings Square Renewal project.

Fremantle Mayor Brad Pettitt said the aim was to make the new administration centre one of the most energy efficient buildings of its size in Western Australia.

“Our target is for the new building to be zero carbon, so it will have a sophisticated automated opening façade system designed to capture Fremantle’s famous sea breezes and enable natural ventilation for most of the year.

“It will have high-performance, well shaded windows to minimise heat loss during cooler periods and minimise heat gain in summer.

Other sustainability features will include a 240kw solar PV system, energy-efficient LED lighting and water saving appliances.

Another key sustainability measure in the 2018-19 budget is the allocation of $920,000 to implement the new three bin Food Organic Garden Organic (FOGO) waste management system.

The new FOGO system is a key step towards achieving the City’s One Planet target of a 70 per cent community recycling rate by 2020, and will also protect ratepayers from long-term increases landfill costs.

The budget also includes:

$50,000 to purchase carbon offsets to maintain carbon neutral status
$40,000 to implement the verge garden scheme
$32,784 for a new cardboard and aluminium bailer for the Fremantle Recycling Centre
$14,000 to provide Living Smart sustainability workshops
$10,000 to introduce a local container deposit scheme at three Fremantle Primary Schools
$12,000 to install solar panels on community buildings
$10,000 to implement a car share scheme
$30,000 for works and maintenance in the City of Fremantle Bike Plan
$65,000 to revise the Sir Frederick Samson Park management plan
$102,000 for coastal monitoring and assessment at Port, Leighton and Mosman beaches

For more information on the City’s One Planet strategy visit the One Planet page on our website.

 

Roel Loopers

 

AGEING POPULATION IMPACTS ON ECONOMY

Posted in aged, city of fremantle, economy, health, hospitality, retail, seniors, Uncategorized by freoview on July 23, 2018

 

The media reports that the Western Australian economy has bounced back is positive, but the reasons for the closure of many hospitality outlets and the downturn in retail sales is always only ever explained with internet shopping and the mining bust. Not one expert opinion I have read considers that the fast ageing population is also a reason for people spending less money on non essential items.

Just in Fremantle I know several people whose life has changed since they went on the government pension, because they simply no longer have the money to socialise with friends in pubs and restaurants. Some tell me they can’t even afford to entertain at home, because cooking a meal for friends might cost 50% of the money of their weekly food expenditure.

Many of the pensioners I talk to say they mis no longer going to live theatre plays, concerts and events, because there is not enough money in the kitty, and even going to the hairdresser, especially for women, requires to save it from something else.

A ‘cheap’ $ 20 breakfast or $ 35 dinner in a nice cafe or restaurant are beyond their reach, so they feel on the scrap heap of society, where no one really cares how they are surviving and what their quality of life is.

The government pension does not keep up with the constantly increasing costs of just about everything, but that does not appear to be an issue for our political parties. Once one pays rent, telephone, internet and for the car, there is very little left for food, and hardly ever enough for a meal and glass of wine somewhere nice. Even doctors’ visits need to be kept to a minimum because most GPs don’t bulk bill any more, hence far too many old people use the free service at the emergency departments at our public hospitals.

It is an outrage that many old people live in cold homes in winter because they don’t have enough money to pay for gas and power, and it is an even greater outrage that thousands of people sleep on the streets of our cities.

The very fast ageing of the Australian population is very real, and it does affect the economy, so it is time for our politicians to start preparing for a future where over fifty per cent of the population will be over 60 years old. It is even more tangible and imminent than global warming, so it is time to change the priorities a bit and start looking after our older people a whole lot better.

Roel Loopers

 

Henty's

FREMANTLE BUDGET AN INVESTMENT IN THE FUTURE

Posted in budget, city of fremantle, development, economy, local government, Uncategorized by freoview on June 29, 2018

 

Fremantle Council has adopted an annual budget it claims to be the single largest local government investment in the city’s history.

The 2018-19 budget, adopted by the council on Wednesday night, included $46.3 million as the City’s contribution towards the broader Kings Square Renewal project, which includes the development of a new library, civic and community centre, upgrade of public spaces by the City and the redevelopment of the former Myer building, Queensgate building and Queensgate carpark by project partner Sirona Capital.

The 2018-19 budget also includes $920,000 for the roll-out of the new FOGO (Food Organics Garden Organics) waste management system, and $2.8 million to construct the new Fremantle Park Sport and Community Centre.

Residential rates will rise by a modest average of 2.9 per cent, which includes a 2 per cent increase to partly fund the costs of implementing the FOGO system, including the purchase of new FOGO bins.

Fremantle Mayor Brad Pettitt said  that “It’s a significant achievement that the City has been able to deliver this unprecedented level of investment and keep rate increases low, despite the substantial increases in costs through state government charges like power and water.”

The 2.9 per cent average rate increase is the second lowest since 2000. The lowest was last year’s increase of 1.5 per cent.

Total budget expenditure is $150.1 million, comprised of $57.7 million in capital expenditure, $90.7 million in operating expenditure and $1.7m in loan repayments.

Other budget highlights include:
• $2.5 million road improvement and maintenance program
• $743,000 for more CCTV
• $506,000 to refurbish Cantonment Hill Naval Store
• $250,000 for internal restoration works at the Town Hall
• $110,000 to upgrade the Esplanade Youth Plaza
• $100,000 for further upgrades to South Terrace
• $115,000 on new play equipment
• $25,000 to prepare concept plans for Fremantle Station city square and Queen Street upgrades.

Roel Loopers

FREMANTLE’S HEALTHY FINANCIAL RATING

Posted in budget, city of fremantle, economy, finances, local government, Uncategorized by freoview on June 22, 2018

 

The financial management of the City of Fremantle was strongly criticised by some in our community when it was rated only 42 by the My Council state government website for 2015/16, so for what it is worth, Fremantle has climbed substantially and was rated 87 for the 2016/17 financial year. It was at 79 in 2014/15.

Roel Loopers

Comments Off on FREMANTLE’S HEALTHY FINANCIAL RATING

FREMANTLE BID FUTURE IN DOUBT

Posted in advertising, bid, city of fremantle, economy, local government, retail, Uncategorized by freoview on April 11, 2018

 

The FPOL Committee of Fremantle Council will consider tonight the City’s future role in delivering destination marketing also known as the ‘place marketing’ service. Some of the reasons for it are :

The service aims to support the viability of the Fremantle business community by improving awareness of the overall Fremantle offering to visitors, improving perception of the overall Fremantle offering to visitors, and ultimately increasing visitation to Fremantle to provide opportunities for local businesses to capture expenditure.

The service encompasses the marketing of all business-to-customer or population-driven industries including (but not limited to) retail, hospitality, professional services and traditional tourism attractions.

Combining the City’s destination marketing budget with the use of the central area differential rate to enable a greater investment in destination marketing, and

Establishing an ‘arm’s length’ group comprised of a marketing professional as chairperson and key representatives from the business community with appropriate skills or experience in marketing to set the plan for:

the overall strategic marketing approach, including different stages over next four years

how to achieve ongoing business community engagement in marketing activities

appointment of a marketing agency and/or marketing contractors (via a normal City procurement process) to deliver destination marketing services, and

sponsorship of existing and new private events and grass roots business activation projects.

It is recommended that the destination marketing advisory group will operate for a four year period (2018/19 – 2021/22) with agreed terms of reference, and process for nomination and appointment by council. The group would make recommendations to council on matters related to destination marketing. In many ways, comparisons can be made to the way the Design Advisory Committee operates.

The Group will consider the ‘brand values’ and ‘unique selling points’ of Fremantle within the context of increasing competition from competing Perth metropolitan centres, global customer trends, disruptions to major industries such as retail, and the economic development aspirations of Fremantle.

Following organisations that have submitted letters of support: Experience Perth, Tourism Council of Western Australia, Fremantle Chamber of Commerce, Fremantle Prison, Fremantle Tourism Association, Fremantle Accommodation Association, Fremantle Markets, MANY 2.0 and Sirona Capital.

The current recipients of the differential rate, the Fremantle BID and some of its supporters, have submitted letters opposing the proposal. This is an expected and logical position for the BID to take as the recommended model requires discontinuing the BID’s funding after this financial year.

This report does not comprehensively evaluate the performance of the Fremantle BID but does assume that the recommendations in the report will deliver a more effective use of the differential rate money. That assumption is made by comparing the expected outcomes of the officer’s recommendation and the level of business support for it, against the level of support for the Fremantle BID and the outcomes delivered for the approximate $2.2 million in funding provided to the BID since 2012/13 FY.

One of the issues that is not addressed is that the additional differential rates are only paid by businesses who operate in the CBD, while the new destination marketing strategy will be for all of Fremantle, so how will the City make this fair for inner city traders that are paying the extra rates?

Roel Loopers

Comments Off on FREMANTLE BID FUTURE IN DOUBT

%d bloggers like this: