Open letter to council chief executive officer Lisa Desmond, cc Mayor Gerard O'Connell

AS A former director of the Wide Bay Water Corporation I have a few things to say to you (as the person who runs the Fraser Coast Regional Council) and the Mayor about your aggressive, unnecessary and so far botched attempt to take over WBW.

My main regret is that I will not be there to stand up for the fine staff and organisation of WBW.

They have already suffered much and there is more ahead for them.

A question that needs consideration by ratepayers is that both the previous board and the current board have been fundamentally opposed to your agenda to roll WBW back into the council.

As directors, we are not gaining anything by our opposition.

The easy option for us was to go along with it all, take our remuneration for a couple of years then move on.

The council has done very well out of WBW. Since its creation in January 2002, the sum total of payments including distribution, initial set up compensation and council debt reduction is approximately $112 million.

Now that's a lot of money but none of it has been used for water or sewerage maintenance or projects and that is what it was intended for.

After the GFC struck and coupled with a reduced demand for water because of consecutive wet seasons, the dividend from WBW diminished because profits were down.

But hey, that's business.

But you couldn't wait for a return to profitability could you?

I admit that the next move was a master stroke. Some things can be legal but really smell.

To use shareholder equity (i.e. shareholder paper wealth in the balance sheet owned by the FCRC which is not real money) and coerce the previous board of WBW to take $73 million of this as a real debt on to its books was clever.

I mean WBW couldn't even use the $73.5 million.

But WBW now have a real debt and has to pay you real money in the form of interest at around 8.61% for 5 years; in current terms, $6.4 million each year; and why?

So that you can maintain an income from WBW of around $10.5 million each year, not as a dividend as required by the regulations it operates under, but as "distribution", a euphemism for the stripping of cash out of the organisation.

I have sent a letter from the WBW Board to the Queensland Audit Office about this matter.

Yes, I know you will argue that you needed certainty in your budget deliberations.

I say, your core budget should be structured around your general rates and other known levels of income.

The dividend from WBW is always going to fluctuate.

To put us into debt to guarantee an income is obscene.

There are many businesses in the Fraser Coast that wish they could wave the magic wand you were able to.

And so to the water and sewerage rates, the real reason for this takeover.

The evidence is there.

All councils in Queensland use these rates for projects other than water and sewerage infrastructure.

That certainly happened in Maryborough when the mayor was a councillor.

You and the Mayor may say that council promises not to touch these rates to bolster your obvious problems with budget management and living beyond our means.

But a current mayor cannot make a binding commitment for a future mayor.

People can't see the pipes and who wants to go to sewerage works?

Sewerage and water in invisible pipes are just not attractive for politicians for a photo opportunity.

Councillors can sign over their votes and interest to the Mayor and Deputy Mayor but they can't sign over their responsibility; that extends to future generations; our children and grandchildren who will suffer the consequences of further neglect of water and sewerage infrastructure.

The community had a solid and experienced board to realise efficiencies and ensure that the water and sewerage rates are applied in the correct areas.

It is being destroyed by you and the mayor in the search for compliant directors to fulfil your ambitions.

- GEOFF SKERRITT

(Editor's note: as of today, Mr Skerritt remains a director of Wide Bay Water)