Council calls for RCL excellence

Ruapehu Bulletin, Volume 12, Issue 550, 23 August 1994, Page 1

Council calls for RCL excellence

As well as financial success, the Ruapehu District Council is calling for excellence in the work that Ruapehu Construction Limited (RCL) carries out on its behalf. The council set up RCL as its Local Authority Trading Enterprise (LATE) so as to be able to bid for its own work under the government's rules which state that council work must be put out for tender. At their meeting last Friday the council discussedRCL's 'StatementofCorporatelntent' and accepted a number of additions to the document - notably the points regarding performance targets of the company. "Ruapehu Construction Limited will strive for excellence in all of its core business operations," was put forward as an extra performance target. Councillor Bob Peck said all the objectives were 'quite fine, quite reasonable and quite proper'.

"But to the people on the street it doesn't mean a bloody thing." He said people did not understand the separation between RCL and the council. Chris Ryan, deputy chief executive, said Mr Peck had highlighted an important point. He said the credibility of RCL (as the company that carried out the bulk of the council' s work) was as important as the council' s own. Mr Peck said RCL should be self-policing its performance in the contracts it carries out "instead of reading in the (media) about bridge approaches not being completed properly". Mayor Garrick Workman said that was why RCL was now planning to focus on its core business, to consolidate its activities. (Mr W orkman stood do wn from the chair during the discussion as he is a director of RCL, and deputy mayor Graeme Cosford took over). Under the heading 'Objectives', the council

resolved that the company include the following: □ RCL will act as a strategic resource in the event of a Civil Defence emergency. □ RCL will at all times act as a good corporate citizen fostering a positive relationship with the public □ RCL will at all times seek to present a high standard of corporate image. □ RCL will seek to consolidate its existing business involvement and scope of work thereby strengthening and stabilising its position in the marketplace. □ RCL will compete for contracts and provide a high quality works contracting and related activities services associated with its core expertise. Other additions related to financial reporting from the company to the council as a shareholder. Performance targets already included in the Statement of Corporate Intent were:

□ To achieve a turnover of at least $5 million per year □ To achieve a pre-tax profit of at least 9 per cent of turnover. □ To achieve a return on shareholder' s (the council) funds of al least 20 per cent above the average bank call deposit rates. □ To carry out work to the standard specified in formal contracts as evidenced by each providing a certificate of practical completion or equivalent. There was some discussion on the financial return objective, with Cr Weston Kirton asking why call deposit rates and not term deposit rates would be the target. Mr Ryan said such rates were negotiated with banks in the case of the council. Mr Houston said the return to shareholders would be tax-paid, at 33 per cent while interest rates are pre-tax, so the target was therefore quite high.