Update on LG Act Reform Planning Progress

Today, we received a letter from Minister Hutchins, informing ratepayers the progress status of the reform planning milestones to date.

Last year, we organised a forum in the Knox club, to provide feedback to a discussion paper proposing reform directions and ideas. We understand that a first version (or draft) of the proposed new legislation will be released sometime this year, open to a last open review before completing a final version for Parliamentary review and approval voting. The letter we received today is in response to the summary list we submitted to the Reform team in early January  2017.

RV’s January 2017 list of priority items for reform is as follows:

  1. Effective compliance to the Act:  Without an effective policing system, non compliance , as is today, will continue business as usual where there are lacking effective penalties to no consequences for non compliance offences. As a component of a future policing system, we also recommend adopting citizen juries, to help oversee and report governance and compliance at local levels. The Minister can nominate and provide training & support for qualified ratepayers to be part of their council’s citizen jury team. Ratepayers Victoria can help implement and manage this new community driven component of governance and compliance management
  2. Rate Valuation Equity:  As seen in the latest Parliament Rate Capping report, councils and opposition parties are not supporting rates capping and they continuously steer towards blaming the Fair Go Rates policy for escalating and above CPI individual rate rises. The real cause is CIV and the ineffective use of existing rating tools by councils. We recommend moving away from adopting CIV towards adopting a modified SIV as common state-wide rate revaluation method. SIV ensures investment developers can no longer benefit the most from a CIV approach and more importantly gives some protection for our older ratepayers from excessive rate rises caused by CIV.
  3. Standard chart of accounts (prescriptive):  essential for increasing financial accountability and sustainability across all service and operational dimensions of municipal businesses. This chart of account also has to integrate a common service classification system and the LGPRF to streamline lifecycle and performance management of the many hundreds of individual municipal services claimed by councils.
  4. A uniform complaint management Registry system across all councils that allows all stakeholders, especially ratepayers to track and manage the resolution status and satisfaction measures of registered complaint processing from capture to resolution. The analytics reporting will give evidence and insights into the strengths and weaknesses of councils’ capacities and self improvement propensities to service their communities, including their performance in good governance conduct and decision making.
  5. Community Engagement: Adopt a state common standard in public participation, such as the IAP2, which can provide the standard framework dimensions for justifying council’s choice of community engagement levels and reporting their performance measures in community engagement.
  6. Confidentiality and Conflict of interest: Distinct state-wide definitions of meeting confidentiality and conflict of interest (CoI) declarations (including compliance & offence rules) need to be specific, to return integrity of council’s decision making information transparency and justification accountability.
  7. Decision making Transparency & “Best Value” accountability: Simply making up and availing information for decision making, through officers reports or on the go council meeting debates is not sufficient to achieve transparency. Mandate guidelines for better and decision making information to be more relevant and publically accessible, timely and accurate and complete. We recommend decision making publications to be proactive and provide clarity of procedural and information criteria that explain (a) how decisions are to be made, justified and risk assessed and (b) organisational project management procedures and measures to ensure and report traceable and progressing implementation accountability.
  8. Term limits on CEO and councillors (2 terms), to mitigate groupthink, incompetent and politically biased councillors and CEOs to service local communities.  We also recommend performance appraisals, supported by clear performance measures, to be adopted and published , to motivate CEO, Mayors and Councillors to be more accountable to their communities and demonstrate their capacities to achieve goals, linked to their performance measures and Below are a list of reform priorities ratepayers would like to see included in the scope of LG reforms.Councillors’
  9. Competency Assurance:  It is common knowledge that lacking councillors’ competencies in leadership, governance and interpersonal skills are some of the key factors that are fostering poor council cultures, biased and poor decision making, incompetency, mistrust and poor relationships with their communities.  Regular and progressive training can be mandated, especially for long standing councillors, to build / correct councillors’ competencies in leadership, corporate governance and people relationship management.

 

Ratepayers Victoria’s Position on Councils Amalgamations

Recent news indicate a possible scenario of councils amalgamations if Victorians support this future option – refer to:

  1. The Age – http://www.theage.com.au/victoria/local-government-minister-natalie-hutchins-says-government-open-to-amalgamations-20160908-grcahq.html
  2. The Herald Sub – http://www.heraldsun.com.au/news/victoria/victorian-council-amalgamations-local-government-minister-open-to-move-if-community-wants-it/news-story/8b1e897f7e00ed4748277d282b1ebe14

We issued a press release to respond to this possibility:

Ratepayers Victoria do not support forced councils’ amalgamations .  We support that every council should engage and collaborate with its community to review the pros and cons of amalgamation in its own municipal and if there are better best value benefits arising, by all means progress further.

We prefer to take a more 21st century perspective of restructuring the Local Government sector.  Councils have always been operating as decentralised units of the State’s LG portfolio. This decentralised business model is the cause of many councils’ inefficiencies and barriers to optimized service provisioning and good governance leadership.

It is time the sector should examine options of reducing council’s decentralised operations and identify more shared in house and community services to improve efficiency, good governance and best value outcomes for their communities. A lot of councils’ back office functions, including administration operations can be shared and this will release millions to billions of money that can be better used to provide more relevant and high value services and amenities to communities and reduce councils’ expenditure that can result in lower rates and consequently lesser CIV effects on individual ratepayers, ultimately increasing and sustaining rates affordability.

The centralisation of councils’ operational and management processes is certainly a viable and high impact option for LG reform, without compromising local democracy.  The process of local democracy also needs to be reviewed, as the question is whether councillors have the right leadership and organisational competencies to lead multi million to multi-billion councils’ operations?

Press Release: The Truth is Out There

When the rate capping policy was developed and adopted, all official communique and documentation were very clear upfront in stating that rates capping only apply to general rate and municipal charges. Other council service charges, fees, fines and differentiated rates, together with prevailing state levies (e.g. the fire levy) are excluded.

The Minister also specifically said that in some cases, ratepayers will find their rates bills would increase more than 2.5% (the capped level) because of the changes in their properties’ capital improvement value and other increases in municipal charge-outs that are not subjected to the rates cap. Most councils advocated for and changed to CIV rating system a few years back.

The Fair Go Rates policy is a real present and future threat to some councils, as it has taken away councils’ free reign of rates increases and require them to be more transparent and accountable in supporting and sustaining a fairer rating system that would deliver more visible value for money services and maintain rates affordability in the longer term. Because of this threat, most councils have come together with their peak bodies, even during the development of the rates capping policy, to defend their tuff. Their lobbying campaign is still continuing and growing strong despite the policy is now legislated and operating.

What MAV didn’t make it clear in its 30 June media release that rates capping can work if councils are committed to make it work. Influencing the public to think and eventually lead to believe that the rates capping policy does not work isn’t quite kosher.

The last two years of media stories clearly showed the lobbying resolve to campaign against and discrediting the Fair Go Rates policy. These stories, together with local ratepayer-advocates’ reports, revealed the use of:

  • media and community communication strategies, to create a series of related news and messages to social engineer people into believing that rates capping has caused more harm than good to councils and their communities, e.g. like cutting out the school crossing services,
  • diverting council funds to support collaborative projects with peak bodies, which duplicate state services e.g. the Alliance For Gambling Reform
  • many internal cost shifting tactics, to ensure the parts of council-budgets constrained by rates capping are reduced or kept unchanged, in order to minimize rates reduction. For the next financial year, some councils have already and blatantly introduced new or increased existing charges, fees and differentiated rates that are not affected by rate capping.

 Many people do not understand how their council rates, rates capping levels and fire levy are structured and calculated. It is easy to leverage this low community literacy and convince people that the State Government has mislead them, because their total rates payable for the next financial year is above the capped level of 2.5%. Now (just before the election) is also most strategically timely to leverage political pressure in any public communication broadcast.

Ratepayers are disappointed that some of their councils and their peak bodies are not willing to make rates capping policy work, eroding the opportunity of achieving longer term community and organizational improvement benefits for every stakeholder in Local Government.

Let’s cut to the chase, ratepayers would like councils and their peak bodies stop winching and continue resisting the rates capping policy. They should spend more time and effort in making the Fair Go Rates policy work, to increase efficacy in council operations and bring more visible best value outcomes in municipal service provisioning. Change is incremental and to expect full delivery of long term benefits in the first year of the Fair Go Rates policy is most misleading and laden with manipulative intents?

 

Results of Councils’ Rates Variation Applications

The ESC just released their decisions of the rates variation applications submitted by a number of councils. They are:

9 out of 79 councils (11%) applied and 67% of applicants received approvals. This shows at least 89% of councils have the capacity to lower rates –  if we include the 3 unsuccessful rate variation applications, the real figure is 73 councils or 92% can afford lower rates for their communities.

The full report of the rational decisions and underpinning reasons are found in Overview-of-Local-Government-higher-cap-decis…pdf (159kb)  and there is the Q&A resource    Approving higher caps – Questions and Answers.

We anticipate several councils and highly possibility peak bodies will be spilling “blood” in the street, with ESC the main target.  If and when this behaviour reaction realises, then a lot will be revealed about and confirm the good governance culture of our councils and their peak bodies.

The decision report is rational, of high professional quality and based on very clear decision criteria that were well communicated upfront before the rates variation process commenced.  Applicants also had many opportunities to consult with the ESC, to ensure their applications meet the criteria.

RV’s Submission to the Local Government Act Review call

Reforms are coming to the Local Government (LG) sector in Victoria. A major activity towards LG reforms is reviewing the present LG Act and restructuring it for re engineering better and community centered councils for us.

This morning, RV just submitted a response to this review. We thank members of our network who also submitted their responses, making sure changes to the Act will be more ratepayer and community centric.

If you want an official reference that confirms the current shortfalls in the LG system, refer to the http://www.yourcouncilyourcommunity.vic.gov.au/discussion-paper for details.

Synopsis:

In the submission, we made the analogy that the LG Act is like an operations handbook for councils. It is purposed to support the State Government (LG Minister) oversee and harmonise the 79 councils’ operations, to ensure peace, order and good government for all Victorians.

A legislated council handbook does not mean the  councils are 79 mini autonomous  State Ministry entities having all and delegated powers to provide municipal services to Victorians. They were and are never the third tier of legitimate government in Australia and should never seek future referendums to become one. Because they are just body corporate entities of the Victorian LG Ministry.

RV used a system reengineering approach to review the LG Act and recommend ideas to make it a better organised, 21st century relevant, and best practice oriented operating handbook. We understand that this handbook is for all councils to refer to and comply with, in order to perform their state-delegated governance and enterprise roles and functions, via municipal service provisioning. Because it is legislated, the Victorian Parliament will approve its contents and purposed uses and any of its future amendments will continue to be sanctioned through state law making procedures.

The submission discussed some ratepayers’ observations, case study exemplary and analytical commentaries about current gaps and reform ideas, which is useful for supporting the LG Act’s restructuring and contents development.

Rate Capping Bill Introduced Today

The Minister for Local Government, MP Natalie Hutchins, is thanking RVI and its networks of ratepayer-advocates for helping to collate grass-root feedback from ratepayers and residents, which provided valuable insights to help justify and developing the draft rate capping policy, which is now introduced into Parliament.

She wrote………….

“In the nearly twelve months since being elected, the Andrews Government has been getting on with delivering the things that matter to Victorians.

In the local government space that means giving ratepayers greater value, more of a say, and a better understanding of the work their councils are doing.

And with your help, that’s exactly what we’re doing.

Key to this has been our ‘Fair Go Rates’ system, which has now been introduced to the Parliament.

In Victoria, council rates have averaged close to six per cent rise every year for the past ten years.

As Ratepayers Victoria knows – it’s unsustainable, and it’s unfair.

That’s why we developed the Fair Go Rates system.

It’s not about stopping councils providing quality services and facilities.

And it’s not about cutting existing budgets.

It’s about giving ratepayers greater surety about what their rates bill will look like into the future. It’s about ensuring greater value for money.

And it’s about encouraging councils to listen and engage when it comes to the needs of their community.

While the Fair Go Rates system imposes a cap on rate rises, it doesn’t mean new projects can’t be funded.

In fact, it will encourage better-planned projects , with more consideration of what the community needs.

If a council has a project that requires it to go above the rate cap, it will have to demonstrate to the Essential Services Commission that an increase is warranted.

Councils will have to consult with the community and make a case for the increase before it’s approved.

I’d like to thank Ratepayers Victoria for their feedback as we developed a framework for the Fair Go Rates system. Hearing from residents and ratepayers on the ground has been invaluable.

Together we can ensure the community gets more of a say – and that councils are listening.”

Click here to read the final ESC report that was submitted to Parliament today. Read more of the introduced bills through this official media release.  Today’s Herald Sun also wrote about the introduced bills (see article dated 20 Oct 2015), reporting that:

“VICTORIAN councils will be forced to cap rate rises at the state’s key cost of living benchmark, under new laws that should save families hundreds of dollars.

And councils that “deliberately and repeatedly” defy the new limit will face the sack.

But the Herald Sun understands draft legislation, to be introduced to State Parliament on Wednesday, allows the local government minister to reduce or increase the cap in exceptional circumstances.

Councils also would be able to argue to the Essential Services Commission for exemptions if they could prove community support, and justify the need, for more spending.

The laws would see the Andrews Government fulfil a key election promise to cap rate rises at the Melbourne Consumer Price Index — despite ESC advice that it should be watered down.

The Melbourne CPI increased by just 1.1 per cent in the past year. Next year, when the new laws would apply, it has been forecast to increase by 2.75 per cent.

This is less than half the average rate rise over the past decade, and would mean the average rates increase next year would be $50 or less.

A final decision on the percentage cap will be made each December, when the State Government’s midyear economic update is released with inflation forecasts.

A spokeswoman for Local Government Minister Natalie Hutchins declined to comment because the Bill was not yet before Parliament.

But Ms Hutchins told the Sunday Herald Sun this week that “Victorians have had enough of never-ending rate increases”.

“Victorians expect greater value, more of a say, and a better understanding of the work their councils are doing — that’s exactly what our Fair Go Rates cap will do,” she said last week.

Opposition Local Government spokesman David Davis last night said Premier Daniel Andrews should have capped rates this year, and it was “imperative that he be forced to keep his promise from here on in because family budgets depend on it”.

Rates have risen an average of 6 per cent a year over the past decade.

The Municipal Association of Victoria released data on Tuesday showing state property taxes grew by 7.1 per cent in the past decade, after the Government released rates data.

Councillor Bill McArthur, MAV president, said “this year Victorian councils worked hard to keep average rate increases to a 10-year low of 3.8 per cent while still providing more than 100 vital community services and maintaining $73 billion of infrastructure” “

The comments of this article says alot about community sentiments for councils and their peak bodies. Lovely people.

 RVI also issued a press release today:

 

RVI Reform Projects: Oct Status Report

RVI has formed a strategic high performing team, looking at ways of bringing ratepayer groups and supporters together to provide value add in a future reformed LG system where every council is responsive to, and reflective of, their local community.

We have planned a program of several coordinated projects, of which  3 projects have commenced last month. Here is the latest progress report:

1) Project #1: LG Reform Contributions

The aim of this project is to inform ratepayers of coming LG reform initiatives and enable higher and value adding contribution to LG reforms. The first milestone is hosting the seminar, themed “Re-engineering Local Government”, in the Mulgrave Country Club on Saturday 14 Nov 2015, from 9:30 am to 4 pm.

Click here for the flyer.

2) Project #2: Annual Good Governance Survey Development

Over several weeks, the strategic team from Ratepayers Victoria Inc (RVI) has been working on a survey that enables ratepayers, who are actively engaged with their councils, to evaluate their councils’ good governance performance on an annual basis.

We have engaged with higher government levels to understand their good governance expectations and performance measures of councils, when developing this survey.  Currently government reporting about Council’s service levels come from the annual satisfaction measures of people who use councils’ services. The new value add we offer to higher government agencies goes beyond measuring operating service levels. Ratepayers are empowered to evaluate the good governance performance levels their councils through a common process and share that annual information with LG Minister and other higher authorities.

We have just released a beta test of this annual good governance survey for ratepayers. The survey findings will help councils improve their good governance. The information will also be reported to the Local Government Minister and all other higher authorities and be an integral part of the upcoming review of the LG Act.

If you are interested to participate in the beta testing of this online survey tool, please email lgact1989@gmail.com your request.

3) Project #3: RVI Strategy Management

Among many things, RVI has been also working on a strategy for enabling ratepayers groups to come together and collaborate effectively to exercise governance oversight of their councils, by:

  1. Sharing a common vision – Every council is responsive to, and reflective of, their local community
  2. Using common governance oversight processes
  3. Using ICT (including social media) tools that enable them to exercise governance  oversight over their councils and provide a rich data repository of good governance performance measures that can be reported to higher authorities and enable benchmarking.

Many thanks to Monash Ratepayers Inc. who provided the experience based knowledge to develop the common processes and ICT tools for empowering ratepayers to have this powerful and sustainable governance oversee capability.

More details of the strategy will be announced during the RVI seminar in Nov.

RVI Public Seminar : Reengineering Local Government

A Ratepayers Victoria Inc event in partnership with Eastern Ratepayers Inc

DATE:    Saturday, 14 Nov 2015

TIME:    9:30 am registration, seminar from 10 am to 4 pm

VENUE: Mulgrave Country Club, Corner of Wellington and Jells Road, Mulgrave 3150.

Objectives

  1. Identify the key deficiencies in LG system
  2. Fixing today’s broken system via LG Act reforms
  3. Recognising a peak body for ratepayers in Victoria
  4. Contribute info for RVI submission to the LG Act Review program

 

Contact:  The event is free. For catering purposes, early booking is required by 1 Nov 2015 – please contact either:

  • Jack Davis – jack_d@iinet.net.au; mobile 0412 238 974, or
  • Frank Sullivan – frank.sullivan6@bigpond.com; mobile 0438 555 805

Join us and other ratepayer leaders to discuss about common core issues and how the LG Act and other associated laws, and the roles of ratepayer groups can be changed to fix today’s broken LG system for the better.

The seminar will include free light lunch and feature inspirational speakers including:

Keynote Speakers:

Minister for Local Government , Hon Natalie Hutchins
Assoc Professor of International Business, Sharif As-Saber

Guest Presenters:

Joe Lenzo, Ratepayer advocate leader from Mornington Peninsula Shire 
Carl Cowie
, CEO of Mornington Peninsula Shire
Rafal Kapton, Councilor of Casey
Matthew Gordon, Board Director of Oursay, a digital community engagement platform.
Frank Deutsch, Councilor of Ararat

These guest speakers will share their insights, such as what is wrong with Local Government today, a case study of best practice CEO leadership and council operations transformation; workplace bullying and conduct reforms; using technology as strategic tools for change; community engagement reforms, etc.

RVI President Jack Davis will open the seminar. Seminar attendees will engage in Q&A with the Minister; participate in working lunch breakout group activities to identify key issues in local government and share ideas for reforming the LG Act and formally recognizing a funded ratepayer peak body in the sector.

Because of time management, questions for Q&A will have to submitted to either Jack Davies or Frank Sullivan by 12 Nov 2015 and the submitted questions will be chosen on a first come first serve basis. On-call questions are not allowed on the day of seminar. For those who missed their questions chosen can individually contact and converse with the Minister, through her email natalie.hutchins@parliament.vic.gov.au.

This seminar ‘s focus is to understand the coming reform directions and identify future ratepayers’ roles and driven opportunities for change in a new local government world where “Every council is responsive to, and reflective of, their local community” is evidently effective.

———————————————————————————————————————————-

A Common Vision for ratepayers

The time has come for RVI to help all ratepayer advocates to share a common vision for reform, ie

“Every council is responsive to, and reflective of, their local community”

The institutional translation of this community centered vision is an integral local government system that values and can continuously demonstrate:

  • collaboration,
  • accountability and
  • transparency

to its communities.

The implied social responsibility of this vision also:

  1. requires councils and its peak bodies to understand, practice and show good governance not just in decision making, but also in conduct and action taking, and
  2. involves collaborating ratepayers to be the evidence based assessors of their councils’ good governance performance in not just operating matters, but also policy implementation and sustainability.

Through this common vision, RVI, coordinating effectively with local ratepayer groups, will lead rate-paying people to come together, share knowledge and skills,  build the common processes of grass root governance oversight and reporting of their councils’ performance and capacities to comply with good governance principles in conduct, decision making and implementation.

Information technology will be strategically used to enable share-ability of these community driven processes and information and build a traceable and BIG DATA future proofing repository of empirical evidence & bench-marking data about councils’ capacities to be collaborative, accountable and transparent.

Come to the seminar and listen to how this can be readily achieved. Phase 1 plans are already underway for developing the new ecosystem of interconnecting and value adding ratepayers in the Eastern and Southern regions.

Rate Capping Policy Development

 Ratepayers Victoria Inc (RVI) has been very busy contributing to the rate capping policy development. Our committee members have been submitting several different perspectives in responding to the Essential Services Commission (ESC) papers, including the latest report proposing a rates capping solution, that has considered a balance perspective of all stakeholders’ views and interests. From that angle, the solution is also explicitly ratepayers inclusive, emphasizing the need for effective community engagement, and transparent and quality business cases when councils seek to vary their rate increases from capped targets.

We also have nominated Dr Chan Cheah to be the official RVI spokesperson in the Fair Go Rates Reference Group, who meets with the Minister, to be briefed and discuss about the incremental progress milestones of the policy development. The panel comprises of people from councils, peak bodies, unions and two ratepayers groups – RVI and the Victorian Farmers Federation, and organisers from Local Government Victoria (LGV) and ESC, and including Local Government (LG) Minister Hutchins. We had two meetings so far, and the scope of meeting agendas were also presented in public briefings organised by the ESC. If you have not attended these public meetings, the next coming ones are scheduled as follows (we already send a notice last week):

ESC is asking for feedback submissions to their report 2 – found in http://www.esc.vic.gov.au/getattachment/658ebba8-0cdc-4845-8535-a70f79b75626/Draft-Report-A-blueprint-for-Change-Local-Governme.pdf. The deadline for public submission is 28 August. RVI will be submitting several responses, facilitated by several individuals and groups who are submitting their different analytical perspectives, the purpose to give a diverse range of ideas and analytical insights for the ESC.

There is also a Parliament inquiry about rate capping – for details refer to http://www.parliament.vic.gov.au/about/news/2664-rate-capping-inquiry-invites-submissions.


LG Act Review

On Tuesday, 11 August, the office of Minister Hutchins released a press media communique announcing “The Andrews Labor Government is getting on with its election commitment to review the Local Government Act 1989, to improve accountability and create a more contemporary, accessible Act to meet the current and future needs of Victorian communities”. Details can be found in http://www.parliament.vic.gov.au/about/news/2664-rate-capping-inquiry-invites-submissions.

Collaborating with other ratepayer groups, we have formed a working group to be actively involved in strategically contributing to this second and major reform initiative. This LG Act Review is a major opportunity for Victorian ratepayer groups and advocates to influence the reshaping of the current LG Act, which is currently biased in its subjective and varying interpretative applications, which often go against ratepayers.

On Saturday November 14 , we are hosting a Victorian Ratepayers Seminar, themed “Re-engineering Local Government”. This seminar will enable us to facilitate discussions and review feedback from ratepayer groups and advocates to work out the different future scenarios of a new future LG environment.  We envisage a new and better future that will be governed by a refreshed and ratepayers inclusive LG Act, fosters a balance of stakeholders’ views and interests, requires active community/council collaborations in decision making and shows explicit evidence of good governance when addressing all matters of local municipal government. We see ratepayers will play a major and collaborative roles in prioritizing local services and exercising community driven governance oversight, assuring and ensuring services meet real community needs and that explicit good governance becomes business as usual and a future visible norm in all Victorian Councils.

We are inviting individuals and groups to present at this seminar, summarizing their local issues and root causes stemming from the 7 principles of good governance described in the Good Governance Guide. Discussions will be facilitated  to use the presented information to identify and scope appropriate and effective changes to the LG Act. Through this approach, we would be identifying changes that would help us:

  • prevent and mitigate our current issues we face with our councils today and
  •  make a sustainable LG system that is stakeholders equitable, ratepayers/communities inclusive, transparent, traceably accountable, community responsive, efficient and effective and fosters both the letter and spirit of the law.

The working group is also developing a survey to assess the good governance capacity of councils, which we are aiming to have it integrated in mainstream LG system in the future.  There are more new initiatives and creative innovations currently under early planning in our strategic development pipeline. We will keep you posted on future updates.

If you are interested to be a presenter or guest speaker or to attend the 14 November Victorian Ratepayers Seminar: Reengineering Local Government, please email either Jack Davies (jack_d@iinet.net.au) or Dr Chan Cheah (chancheah@gmail.com).