Financial Questions from members
The main part of the meeting consisted of financial questions from members. That's good because it is the only part where any real information is given to the meeting. The Chairman's and Treasurer's reports basically consist of weak excuses to explain the Club's poor management, with very little useful information.
Before we look at some specific issues we have to highlight something that the Chairman, Patrick Campion, told the meeting before he got on to the questions. He said that the Club would answer financial questions as required by the Club's rules but was only obliged to answer questions if the disclosure was required by the Registered Clubs Act. This is totally false. There is no connection between the requirement to answer members' financial questions at a meeting and the disclosures required by the Registered Clubs Act. The requirement to answer financial questions is contained in the Club's Rules attached to the City Tattersall's Club Act. Even if there was no Registered Clubs Act, the Club would still have to answer financial questions at meetings according to it's own rules !
Campion is a solicitor. So whether he deliberately tried to deceive members, or just has no idea, we can't say for sure. Here, at Save City Tatts, we are not solicitors but we spent five minutes looking at this and the legal position is clear. How could a solicitor not know ?
One of the very interesting facts to emerge from financial questions was that radio advertising cost $246,000 in 2011. This is interesting because when members asked a few years ago it was $500,000 and a few years before that it was $900,000 (yes, $900,000 in one year, that is not a misprint).
We have known for a long time that the money spent on radio advertising was a disgraceful waste of members' funds but in their own roundabout way the Club has now basically admitted this. Just consider a few basic facts about radio advertising at City Tatts:
- City Tatts used to spend $900,000 a year on radio advertising but once members started asking questions about it the amount has dropped every year. This makes no sense. If it was money well spent it would make no difference whether members asked about it or not. Clearly, the scrutiny from members exposed it for the fraud it always was.
- Every time members asked about it, management have always assured them that it was successful, that they were pleased with it, that it was effective etc. etc. The problem is that the same answers were given whether they were spending $900,000, $500,000 or $246,000. It is not possible that spending $900,000 or $246,000 is equally valuable. If spending $900,000 was bringing great benefits to the Club, then they are making a big mistake today in only spending $246,000. If spending $246,000 is enough, then the excess $654,000 was a disgraceful waste. Either they were lying back then or they are lying now.
- In any case, it is clear from listening to the answers at the AGM that management have no idea if radio advertising brings any benefit to the Club. Any club that spends $900,000 on anything should be able to clearly demonstrate the benefit to the club or else you don't spend it !
- Apart from the nonsense "explanations" provided by management, it is obvious to members that spending hundreds of thousands of dollars on radio advertising is a complete waste of members' money. Here is our simple suggestion: Cancel all radio advertising today and give the money directly to members in door prizes, free drinks and subsidised meals. This would have ten times the promotional impact.
194 Pitt Street
194 Pitt Street is always of interest to us (and should be of interest to all members who care about their club) because it has been a financial disaster from the day it was bought in 2007 and nothing has changed since. Questions at the meeting reminded us of a few issues about the building.
Campion told the meeting that 194 Pitt Street "completely complies with all fire regulations". We are not sure what to make of this answer. Our sources have always told us that the building does not comply with fire regulations. So who is right? Well, remember that only one floor of the building has ever been renovated for use by members - the other seven floors are vacant (or "used for storage"). Maybe 194 Pitt Street "complies with all fire regulations" as it is currently used - that is, using the ground floor only. And, in this scenario, the other seven floors comply as long as they are not used by members. This may be the explanation - members need to find out more about this.
Another subject that caught our eye was the valuation of the building. One member asked what the current valuation was (a very good question). Jimmy Chen's answer was that 194 Pitt Street was regarded as "core property" of the Club ("core property" is a term from the Registered Clubs Act) and was therefore included in the Club's total premises valuation of $63 million. That is very convenient for management because it allows them to hide the disaster from members. But, hold on. National Australia Bank only has a mortgage over 194 Pitt St - they have no mortgage over the rest of the premises. Well, if that's their only security, they must have a valuation of the building. Maybe Jimmy Chen could ask them what it is and pass it on to the member who asked the question.
Save City Tatts Committee