Who to believe, the mayor or the many concerned submitters and the council's own consultant?
WHEN you commence a press conference by asking the media to "support in helping us achieve the recommendations", as happened last Wednesday when Mayor Dalton released the long-awaited review of the MTG debacle, and the media fail to oblige, then the fur starts flying.
With uncomfortable questions being asked of the mayor, the meeting quickly degenerated into the usual bluff, bluster and bullying we have become accustomed to.
The McDermott Miller review is absolutely scathing of both management and our elected members. It is well worth a read and is available from the NCC website.
A review of such a large financial disaster usually entails, first, finding the cause of this catastrophe, and second, addressing the symptoms.
Because the mayor and his colleagues were the architects of this disaster, they drew up a very limited terms of reference to ensure that the consultants would not review the cause of the ongoing financial problems which Napier ratepayers are now responsible for.
Neither did they allow the other regional stakeholders an opportunity to contribute, despite their multimillion-dollar funding of the MTG.
The consultants, clearly aware of this sleight-of-hand, have provided the uncomfortable facts that the NCC tried to hide from its ratepayers.
CAUSE
We are now all too well aware that the root cause of this debacle emanated from when the council ignored all submissions from ratepayers questioning council assumptions regarding visitor numbers, storage and display space available.
Written and verbal submissions questioning their outrageous and fanciful figures were ridiculed and labelled "negative", "anti the arts," "anti Napier" and "not having done your homework". We have subsequently learned that the NCC's own consultant supported our concerns, in a secret report to the council on October 30, 2012.
Mayor Dalton was actively involved in the public submission process. He also attended the closed door council meeting to discuss the consultant's concerns as to the ridiculous projections put forward to induce public funding.
Despite the above, he baldly stated on March 6, 2014: "I had absolutely no idea of the potential size of the problem until a couple of weeks ago."
Who to believe, the mayor or the many concerned submitters and the council's own consultant?
Here is why the problem is so enormous and why Napier ratepayers are paying out over $80,000 every week to maintain the facility. [p18]
Originally, the NCC stated to funders that the paid visitor numbers were predicted to be 690,000 per annum. This is five times the number that walk down Emerson St in a year - without paying $15 for the privilege.Now we learn that the true visitor numbers are less than 5 per cent of the NCC projections, ie between 30,000-35,000 per annum. [p12] In other words, numbers were inflated by 2300 per cent to funders.
The result was predictable - and predicted, by the submitters at the time. When the NCC prospectus was issued to solicit funding, it stated that "the MTG would be capable of storing the entire collection - with room left for further growth".
Thanks to the review, we now know that the MTG has 1065cu m for exhibits, whereas they require 4225cu m. [p21] In other words, the storage space figure was inflated by 400 per cent when inviting funding for the project.
Meanwhile, the CEO has made it clear that the NCC will not be holding anyone accountable for these two unforgivable errors.
This is simply unconscionable.
In the real world, heads would roll and money would be returned to the investors.
SYMPTOMS
Clearly, two symptoms require addressing, management and council. Nothing in the review highlights the total dysfunction of management more than when the consultants conferred with the 5 MTG team leaders on April 7, 2014. [p5]
According to the review, the meeting was preceded by the circulation of a questionnaire, which elicited only one written response.
That would never, ever, be tolerated in the real world.
Five team leaders - how many indians are supporting them ?
Worse, management confirm that there is no planned marketing within the organisation and, if a master plan was developed, it would have no time for day to day work. [p47]
What, when you have a staff level to cater for 690,000 visitors and less than 5 per cent now turn up, you do not have the time to address this all important issue?
This would be unbelievable if it applied to a corner dairy, let alone a $20 million facility.
Indeed, the review emphasises that this appalling attitude puts the MTG at risk of market failure and, in the long term, its future existence. [p50]
This attitude confirms that the current management is living in fairyland.
Other examples of management failure include the highly promoted exhibit by Raki Karaitiana, which turns out to be nothing more than an installation of custom-made wallpaper. [p9]
The review is critical that early European arrival and settlement is not highlighted, as too should be agriculture, industry (Watties), wines etc. [p10]
Little wonder management confirm that only one in three MTG visitors end up paying to view the exhibits. [p27]
Obviously, the current management is seriously out of its depth. As confirmed, the NCC has elected to hold no one accountable for this disaster.
Why would they?
After all, the current mayor and the majority of councillors are directly responsible for this entire fiasco. Therefore, there is absolutely no guarantee that such a commercial disaster will not revisit us in the future.
Currently, the MTG costs all ratepayers over $4 million a year to keep the doors open. [p18]
This includes depreciation and storage rental, both of which will increase into the future.
From this figure can be deducted income from the 30,000 potential visitors but this will decline, as has the entry fee, from $15 to $10 per adult.
In other words, $80,000 per week for a facility that has cost the public over $22 million to date by way of cost and ongoing losses. Unbelievably, the former facility that our mayor regarded as being "not visitor friendly" attracted more paying visitors than the MTG does today. [p13]
The MTG ranks as the worst case of financial ineptitude for any city of a similar size.
It is not something we should celebrate. The fact that the mayor and his council resiled from their fiduciary duty and ignored all advice to the contrary when soliciting funds is reprehensible.
They do themselves no service by denying the facts, refusing to apologise and hold to account those responsible.
# John Harrison is a former Napier City councillor and a founding member of pro-amalgamation group A Better Hawke's Bay.
#Politicians, business and civic leaders, organisers, experts in their field and interest groups can contribute opinions: editor@hbtoday.co.nz
