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"Something We're Considering!"

If there is anything designed to cause palpitations amongst those who have ever in the past been associated with council owned enterprises, there is a heart-stopping surprise on page 11 of the Annual Plan document.:

Something We're Considering

Council has been leading the way in innovative IT solutions to help deliver more efficient services to the community. We believe we can use the skills and knowledge we have acquired as a means for us to pursue revenue generating opportunities, through sale of software and other information technology related tools.

We have had success over the course of the last year working with local companies on software development and taking this to a wider market. Products that have been developed, have potential to generate revenue for the Council to help offset the cost of the services we provide. Revenue generated places less reliance on rates as a source of income. Currently we rely on rates revenue for approximately 75% of our revenue requirement. This is above the national average (of approximately 60%) as we do not have alternative sources of income and because our roading subsidy from the Government is one of the lowest in New Zealand. With the recent down turn in development, the reliance on our rates as our main form of revenue remains high.

Given the possible benefits to our ratepayers, we are currently preparing a business case for the establishment of a company (likely to be set up as a Council Controlled Organisation) to provide the vehicle through which we can run our local joint venture.

Once the business case has been developed, we will be better positioned to come back to the community to consult on costs and expected revenue of establishing and running a company (or Council Controlled Organisation).

A further initiative of Council’s IT venture is the successful development of an online building consent portal. Council is one of only several to be able to bid for the Government’s national online building portal tender. If this leads to success, then the risk and the revenue needs to be managed at arms-length from Council.

Initially we anticipate that the Council would seed fund the establishment of the company, but expect to recover costs over a short period of time. Dependant on being the successful tender for the national online building consenting system initial indications are that $400,000 may be required in the 2013/2014 year however the details of this will become clearer over the next few months. The funding is to be clarified in a business case currently underway. If we were not successful in winning the
tender for the proposal, it is likely little or no seed funding would be required.

Further information will be made available in due course, but in the meantime if you have any comments we welcome these through this draft Annual Plan submission process.

To be involved in ventures that are related to council core 'knitting' is one thing - to be even considering venturing into software development and marketing is tantamount to suicidal. It is not the job of our Council to be even considering such a venture - there is insufficient business acumen amongst councilors to be able to make any decision of this nature, and every ratepayer should be horrified that is even being contemplated. 

It appears that the principal local company involved in this proposal is the famous Track24 whose product  came in for so much criticism in the Deloitte Report on the Whitianga Sports-cxomplex. It is staggering the number organisations that become embroiled in developing their own software when perfectly adequate 'off the shelf' products are available, and our Council is no exception. The on-line building consent portal may be a wonderful product, but our Council is not the place for its development, nor should rates be placed at risk in promoting the venture, no matter what the apparent benefits.

It is true that we have very limited alternative sources of income, but scary ventures of this nature are not the way to go - please stick to the knitting! Let entrepreneurs do what entrepreneurs do - plead for start-up capital from the venture capital experts, and councillors they not they. I will be saying a great deal more about this proposal should it proceed any further in the AP process.





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Reader Comments (5)

please God give me strength
$400,000 ks equates almost to a 1% rate increase
A CCO is a Council Controlled Organisation - how can that be 'at arms length'
Seriously I officially give up on the currently elected council

April 10, 2013 | Unregistered CommenterCyclops

Council should concentrate on delivering core services well first before they look at selling 'buggy' software to other organisations. Its sounds like another records outsourcing debarkle ......failure is written all over it!

April 10, 2013 | Unregistered Commenteruntrusting

With the outsourcing of the mail room going so badly you would think Glen and David would stop listening to some of the advice they get from certain areas of the council. The mailroom debacle cost the council thousands of dollars and good staff were lost. Does David and Glen really believe that TCDC/24 can offer a national service like to building portal? neither have experience at this yet they want a minimum of $400K to give it a go?????

April 12, 2013 | Unregistered Commenternoname

Dont consider it! It sounds like a high risk proposal. For $400k maybe TCDC could fix the dodgy product that they use on their website to publish order papers and minutes!

April 12, 2013 | Unregistered Commentermyopinion

I wonder what company supplied that dodgy product.......

April 13, 2013 | Unregistered Commenternoname

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