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6:45 AM
Manningham Council struggles with Business Concepts

Manningham Council is planning to renew the special charge scheme for Templestowe Village shopping area. The scheme is meant to fund marketting and promotion of the shopping area with a view to promoting business activity.

If you look at the responses from businesses and how Manningham Council went about the process, you will start to see that Manningham Council struggles to understand the issues and pressures facing small business and cares little for the success of small businesses.

Basically Manningham council listened to who they wanted to listened to, ignored concerns that did not suite their agenda and did essentially what benefited themselves.

To understand where Manningham Council is coming from, please read the minutes of the council meeting for 25 August 2015.

On page 2245 the council says this:

"A key strategic indicator in the current Manningham Council Plan is the participation in Special Rate and Charge Schemes for the purposes of marketing and promotion" (Point 7.2)

These special charge schemes in shopping areas are a 'key strategic indicator' for Manningham Council.

I don't think it is unreasonable to think that Manningham Council reports their performance against such key strategic indicators to the state government. Nor do I think it is unreasonable to think that the state government measures the performance of councils using these key strategic indicators.

Manningham Council would look good if they set up and continued these special charge schemes. However, if any schemes were discontinued, people would ask why it was not wanted and why it was not considered effective.

What do you think would happen if shops and businesses were to object to these schemes being renewed? I myself think Manningham council would find ways to override or ignore any such objections. Even if a majority of business were to object to such a scheme, Manningham council would want to brush them aside and renew it.

 

This is what happened some years back at Tunstall Square. Manningham council showed its true colours in the way it pushed that scheme through. (Please see the council minutes for 17 December 2013)

Manningham Council had 'in-principle support' from 75% of the businesses at Tunstall Square and had received a request from the Traders Association to renew the scheme. As I discuss below, 'in-principle support' to many people's minds is not a go ahead to proceed. Rather, to most people, in-principle support means that more work needs to be done to sort out the details before the go ahead is given. (Please see the discussion below). However Manningham council does not see things this way. In-principle support to Manningham council indicates acceptance and buy-in and is a signal to proceed. 

Manningham council then sent out 106 letters to retailers and traders at Tunstall Square and received only two replies that 'noted support'.

One reply was from an ex-trader who no longer carried on business at Tunstall Square. The other was from Doncare. Please note that Doncare received many millions of dollars from Manningham council annually (See Manningham Matters, July 2009, page 2). Clearly Doncare has close links with Manningham council and neither of these replies could be taken to be representative of the businesses and traders at Tunstall Square.

But Manningham Council did not see things that way. The two replies 'noted support' and that was enough for Manningham council and they pushed ahead and renewed the scheme.

Why would Manningham council do that? Because Manningham council looks good when they continue these schemes. 

 

It was the same at Templestowe Village. There were 10 respondents who were in support of the scheme and 17 who objected. The objections were simply brushed aside and Manningham Council planned to continue the scheme for another 5 years.

It is interesting to see how Manningham Council justify their actions at Templestowe Village.

 

In Principle Support.

Manningham council appeals to 'in principle support' from the businesses.

"The request (to renew the scheme from the Traders Association) was based on majority trader support for the Scheme to continue. 75% of traders signing an 'in-principle support' form for the scheme to continue." (page 2241, point 1.4)

As I mentioned before, what does 'in principle support' indicate to you? To me, it indicates that people like an idea, but it needs further work before they commit to it. That at least is how I understand this term after some some 35 years of experience in the business world.

But that is not how Manningham council understand it. For them, 'in-principle support' gives them the go ahead to renew the scheme without further negotiations or discussions to refine or improve it or even get a majority to commit or buy into it. For Manningham Council, 'in-principle support' is a statement of full commitment to the scheme.

I regard this as a deceptive and dishonest way to approach a project that is meant to benefit a community of people. What Manningham council should do is tell the Traders Association to go back to the businesses and get them to commit to the details of the scheme before it goes ahead. That is normally what would happen in the business world. But Manningham council has it's own agenda and is ready to overlook such niceties.

 

Special Benefits.

Second Manningham Council says businesses will derive a 'special benefit' from the scheme.

What is a 'special benefit'?

The Local Government Act 1989, Section 163 (1) simply says: "if the Council considers that the performance of the function or the exercise of the power is or will be of special benefit to the persons required to pay the special rate or special charge."

A business would consider it a benefit if they get more money back than what they invest. That is the nature of commercial business.

But Manningham Council does not see things that way. The staff at Manningham Council do not think like business people. In fact, they have very little understanding of the issue of real return on investment and in the past have demonstrated an unwillingness to learn.

Manningham Council argue that if a trader receives any benefit at all from the scheme -- regardless how small or insignificant that benefit is -- then that justifies the continuance of the scheme and any objection to it is brushed aside. (Page 2243 minutes. Point 2.5, page 2249 Point J.)

May I give you some examples of the extreme ways in which Manningham Council pursues goals that make them look good and how they disregard issues raised by businesses.

Please see page 2286 of the minutes, items 11-24.

14 businesses appear to be experiencing financial hardship and in the current economic conditions can ill-afford the extra outgoings.

Also some businesses are experiencing significant rises in owners corporation fees. Apparently the owners corporation fees have increased by $500 each three months and now stand at an additional $1500. I assume, from the rather vague council description, that the body corporate fees are due every 3 months and in the last 9 months have increased by $1500. An additional $6000 per year is a lot of money for a small business.

The Manningham council officer who responds to these objections appreciates little of this. Manningham Council says it 'notes' the increase in the owners corporation fees but this in no way effects their decision. (See the council's response on page 2286 of the minutes Numbers 11-24.) Manningham council seems to think that if you are in business then just pay these expenses. It has little understanding of the difficulties of earning money in a competitive environment.

So what is the 'special benefit' these traders will get? Please see the Council officer's response to these objections.

The officer says these businesses are included on a website that is supported by funds from the special charge scheme. That is the 'special benefit' these businesses currently obtain.

But what the council officer does not mention is just how bad this website is.

Apparently this website was a big disappointment for the businesses at Templestowe Village. Even businesses that support the council's special charge scheme concede that the website is not effective (but then go on to make excuses and blame others for it.)

"She conceded that not all activities had been effective such as the website, but the Association consistently asked businesses for input into the activities and all the issues raised at the present Committee Meeting could have been resolved if they were brought to the Association meetings." (See point 8, page 2282 of the minutes).

If you look at the website you will see what businesses are getting at. It is not a promotional or marketing tool at all. Rather it is simply an index (or a directory) of the businesses at Templestowe Village. It has a very brief description of the business but nothing that really promotes or show-cases them.

The person quoted above says that businesses should have pushed for what they wanted at the Traders Association meetings. But that is rubbish and just an excuse for a poorly executed IT project.

Having worked in IT for many years I am keenly aware that you need to get the requirements clear and documented. And you also need to get buy-in from the stake holders. Clearly that was not done.

It appears the website seemed to be a good idea to some, so they proceeded without clearly documenting the requirements from the businesses and obtaining buy-in from the business stake-holders.

Now they say that the businesses did not contribute to this project and the shortcomings are their fault. That is complete rubbish.

As a bare minimum, existing promotional materials of the various businesses could have been used. But they were so silly that not even that was done. It gives the impression that the business descriptions were written by the website developers themselves.

I can understand why businesses are disappointed. The website project appears to have been done very poorly and unprofessionally.

However, Manningham Council say that because a business is listed on this website, it derives a special benefit. And that is enough for Manningham Council.

The truth is that the white pages telephone directory provides a similar service and probably provides a greater benefit to the business.

Manningham council has little business sense. Many entrepreneurial businesses are guided by the 10X rule. Manningham council clearly has little idea what that is or how to achieve it.

To spend $300 to have a vague and uninspired entry on a website is very poor return on investment. Actually it is laughable. Our council thinks it is providing a benefit to businesses. In truth it is doing nothing of the sort and demonstrates that it cares little for the benefit businesses derive from their charge scheme.

I think what Manningham Council is actually doing is taking care of themselves and their own key strategic objectives.

 

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