Zoom Zone Dry-Court Pledge Concerns
Saturday, February 27, 2016 at 11:31AM
Bill Barclay

A paper goes to the Community Board on Monday that is obviously designed to absolve staff from any blame should the cash settlement of pledges fall short. It does beg the question as to why it has taken this long to seek a formal 'under-writing' agreement by the Board to cover any or all of the $390,000 in pledges on which agreement to proceed with the Council/Community Board commitment amounting to some $2.568m was based.

The paper sets out the reasons for suddenly indicating 'cold feet':

a.  A donor's financial positions and capacity can change over time. Donors have made their respective pledges with the best of intentions to follow through with making the payments however situations can change.

b. Collection over an extended period means that all pledged funds will be collected after TCDC makes a decision to initiate construction. At the time of initiating the construction phase TCDC and the Thames Community Board will be fully committed to constructing the facility. The motivation therefore that drove donors to make their pledges is reduced and there is, at least in staff's view, a risk that some pledges are not received as the Indoor Sports Facility will be delivered regardless.  (My underline)

c. The collection over five years also means a mechanism is required to actively collect pledges. Staff have worked with the Sports and Education Community Trust (the Trust) to establish a mechanism for collecting pledges over a five year term. The Trust has entered into an agreement with Business One to invoice and collect pledges on behalf of the Trust with pledges to be deposited to the Miller Poulgrain Solicitor's Trust account for subsequent payment to TCDC. It is intended TCDC would invoice the Trust annually to collect these pledges.

d. GST risk. Staff have identified that GST may be payable on the Silver and Gold level pledges (those over $25,000) as donors will receive benefits in the form of partners acknowledgement at the facility. The approach has been to request that GST is added to the pledges and are working through this issue with the Trust via the signing of pledge cards which separate the donation from the GST component.

And then it outlines the process by which staff will take steps to "reduce risk to the minimum." 

Readers will be aware that I have warned for a very long time about the consequences of this project, and processes instituted to date (awarding the 'design/build' contract to a company that had recently been insolvent, for example) that give no confidence that the considerable staff quotient have the skills needed to see the project through without substantial over-runs, and other disasters. 

The reasons set out above give cause for further concern about our Board undertaking a multi-million dollar building project with additional risk falling on the shoulders of rate-payers.

I have been berated by Dry-Court promoters in the past for excessive negativity in relation to this project. This paper certainly gives me no reason to alter the critical position I have taken from the outset.

 

 

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Article originally appeared on BillBarcBlog (http://billbarclay.co.nz/).
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