Victorian Ombudsman Report 2018

Victorian Ombudsman Report
Investigation into Wodonga City Council’s overcharging of a waste management levy April 2018
The three Rs of local government are, famously, roads, rates and rubbish. While all three feature regularly in complaints to the Ombudsman, this case concerns ‘rubbish’ – or more specifically, a waste management charge levied by a local council in which over 30 per cent of the revenue raised was used to fund services other than waste management. Wodonga City Council raised some $18 million surplus over the last decade through this charge – money that was indeed spent on council services, such as parks and playgrounds. But not on waste. As every ratepayer knows, councils raise funds for general services through rates. While the council argues it has been transparent, did the average ratepayer in Wodonga really know they were paying extra in waste charges to subsidise other council services? Or when they received their annual rates bill and saw the line item for waste management, did they think they were paying solely for this essential service? The council said it acted in good faith, believing the practice to be compliant with the Local Government Act, and that they consulted the community. I accept that the legislation does not explicitly require the council to recover only its reasonable costs. However, the intent is clear. And our investigation found they maintained the practice, among other things, to avoid ‘unnecessary negative public reaction which may result from shifting the charges [to general rates]’. A widespread adoption of this approach creates the risk that councils could charge ratepayers an arbitrary figure for waste services, to be used on anything related to council activities, while avoiding the scrutiny that invariably attaches to rate rises. While this practice long pre-dated rate capping, it raises issues about how revenue is raised, in an era when far greater transparency is expected of government. Although the council suggested the waste charge is ‘revenue neutral’ for ratepayers, as the money would have been recouped anyway in some form, this misses the point. As Local Government Victoria pointed out, funding council services through a flat fee also raises issues of inequity and regressive taxation, as it is unrelated to a person’s capacity to pay. Rate capping – which has been in effect since July 2016 – does put financial pressures on councils, especially rural councils with a smaller rate base and, often, ageing infrastructure. But those financial pressures need to be faced head on, in partnership with their communities, rather than buried in the financial fine print. The financial pressures on councils and their communities are likely to increase with the latest developments in recycling household waste. All the more reason for councils to be open and transparent with ratepayers about the true costs of a service. I am pleased this council has accepted my recommendation that they reduce their waste management charge to only recover the reasonable cost of the service provided. But 72 of the 79 Victorian councils have separate waste charges, and I encourage them to satisfy themselves that the charge reasonably reflects the service provided. To do otherwise is to undermine the public’s trust in how their money is spent.
Deborah Glass Ombudsman

Corruption in local council’s

Corruption in local council’s
Whitehorse council $150.000 for Council 20th birthday Party Herald Sun 28/7/2014
Herald sun 27/7/2014 Wyndham Leads councils in suit over unpaid Rates
Herald sun 28/7/2014 Knox Councillor John Mortimore didn’t Sign Conflict of interest declaration when giving $500 of ward funds to Newspaper he edits
Cr Robertson of the central Goldfields shire was charged with 2 counts of offences in 2012 following the incident and was found guilty of abusing his position. Ratepayers hit with $70,000 bill to cover guilty Cr Robertson legal expenses.
Monash Leader 21/10/2014 Monash Council proposes to sell Hanover st carpark to build a 7 storey development, public outcry, project abandon.
Herald sun 2/11 2014 ACMA clears Today tonight of any wrongdoing over its coverage of Monash council’s plans to sell age care homes. Today Tonight stated that council was Sneaky and heartless.
9/2014 Rpv letter to council. Wellington Shire hard stand on ratepayer over no payment of rates due to extreme hard ship.
Herald sun 17/9/2014 Moreland Council ; Mayor’s Shameless excuse over failed CCTV installation exposed after the Jill Meagher case.
Mornington Leader newspaper 16/12/2014 Mixed views on call for capped rates at Mornington Peninsula Shire.
Ipswich Council Minister to stand down, Mayor (labor member) stood down over fraud charges
Monash Councillor Guilty of Sexual Harassment / credit card fraud, proven by the Federal Police
Monash Councillor wastes $2 Million trying to sell public open space 90 % ratepayer opposed the sale.
Monash Councillor provided false information in council in regards to hall management, committee sacked, later proven false by council audit
Brighton Council accused of fraudulent book keeping By George Reynold’s
Mornington Council Suing the MAV for $1 million over insurance.
WODONGA Council. Class action Extra $9.1 million for waste collection
The Ombudsman department stated they were not impressed with Mildura MRCC It was clear they were abusing the system.
Sister Cities are nothing more than holiday destinations for councillors
Municipal Association VICTORIA ( MAV) receive $52million of rate payers funds each year and growing, AND DO NOT REPRESENT RATEPAYERS.
Mildura Rural City Rates Collected by Council (MRCC) increased by 50.2% Wages/ salaries increased by 42/% Inflation increased for the same period 17/%
Wodonga the Ombudsman revealed an $18 million overcharge over a decade This has lead to a class action by ratepayers.
3AW Melbourne 13th May 2018 Ratepayers victoria calls for more accountabilty in council’s
The list goes on and on where is the Minister for local Government????

Lawyer says culture ‘toxic’ at Wodonga

Boder Mail ;
Sophie Boyd 27/4/18

Lawyer says culture ‘toxic’ at Wodonga Council and class action possible
Wangaratta lawyer John Suta, and a senior solicitor at Shine Lawyers confirmed Wodonga Council has opened itself up to a possible class action by ratepayers, after the Ombudsman revealed an $18 million overcharge over a decade.
Shine Lawyer’s senior solicitor Tristan Gaven said he was interested in holding a town hall meeting to inform residents about their rights.
“We believe there may be a basis for a class action based on a claim for restitution by the ratepayers,” Mr Gaven said.
Ratepayers were overcharged thus bringing financial loss and damage on ratepayers – it’s ratepayers money not councils.
Wangaratta lawyer John Suta on a potential class action against Wodonga Council
While there may be issues in relation to limitation periods for amounts paid more than six years ago, in the event that an action was successful, ratepayers would be entitled to recover all charges that were held to be invalid by the court plus interest.”
Mr Suta told The Border Mail one of his clients, who worked as a strategic asset manager from January 2007, complained about the actions of senior staff to the Ombudsman.
“My client made a complaint to the Ombudsman under an alias, as at the time they were still employed by council,” Mr Suta said.
“The complaint was basically that (they were) overcharging for waste services above the cost of the services, subjecting the community to excess charges and inflicting a financial cost on ratepayers.”Mr Suta said ratepayers, as a whole, were overcharged by $3.37 million in 2015-16 alone and $3.033 million in 2016-17 at an individual cost of $90.90 to each ratepayer in 2016 and $74.99 in 2017, Mr Suta said.
“What council did was they undertook a course of action where there was significant financial cross-subsidisation from waste to other departments, which obviously was not the real cost to service,” he said. But, he said, it was up to the public to decide if they wanted to take action on principle.
“Ratepayers were overcharged thus bringing financial loss and damage on ratepayers, it’s ratepayers money not council’s,” he said.
“It could place a principle financial burden on council, but transparency should override the financial burden on council, never mind the fact of public trust.”
Mr Suta said former employees at council say the culture is “toxic”, and said resigning was “absolutely the right thing” for Wodonga chief executive Patience Harrington to do.
• Quilty hints at rate rise for city
• Ratepayers deserve better than ‘excuses’ from council: Tilley
• Councillors break ranks, claim issue ‘much worse than anything we’d been told’
• Public was misled and council failed to be transparent: Councillors
• Wodonga Council’s ‘intent was clear’ in overcharging for waste, says Ombudsman

• President Jack Davis Ratepayers Victoria states the buck stops with the CEO and calls for the dismissal of the CEO CR Harrington

waste not : burn it :

“Enough is Enough” It was interesting to note that in Japan they burn their waste this in turn creates energy to provide Electricity
All Council in Australia are about to increase rates due to the cost to dispose of our garbage, note below letter sent to the Minister for Environment

28th April 2018
Minister for Environment.
Hon Lily D’Ambrosio

Dear Minister
Some three years ago ,a Knox Councilor ,Tony Holland ,was visiting Japan and was on a tour of the countryside ,when he observed these large furnaces and on inquiring from the tour guide what were they were used for and was told that these furnaces are used in Japan to dispose of their waste ,using a system
Gas- Ification ,which they say burns the waste to a dust and the system is very environmentally friendly
Cr.Holland said in a conversation with me this morning , that he was aware that the company that uses this process did come to Australia to discuss this system ,but was not aware of any further action by our people in Australia
Ratepayers Victoria were recently interviewed by Channel 2 News to discuss the waste problem and stated that we here in Australia have to explore the situation” is there a better way to dispose of our waste” .We are all aware of recent developments where China is not now receiving some of our waste from Australia
RPV are not impressed by recent comments by the MAV and also some councils that because of this problem that rates will have to increase .That is the easy way out .Have the appropriate people investigated the matter” is there a solution to this recycling problem”
We at RPV are no experts in this field ,but we owe it to our ratepayers to get the appropriate people to explore every avenue to see is there a solution to this problem without increasing rates.
RPV are aware that in some countries ,residents are very particular in what I goes in their waste bins
Minister ,if you feel there is any way that RPV can assist with this problem ,please feel free to contact us
I have copied in this email to our President of RPV ,Jack Davis.
Your Sincerely
Frank Sullivan
Vice president RPV

Ratepayers Workshop 24th March 2018 Ratcliff Community Hall

Ratepayers Victoria (RVP) Workshop, which was held on Saturday 24th March 2018 at Ratcliff Community Hall
had a good turn out of ratepayer members who attended despite the extremely bad weather. The mood of the workshop was very positive.

It was decided that RPV have to have a theme such as when Gough Whitlam used a theme “Its Time” back in a Federal election in the mid seventies.
The theme voted on by members was “Enough is Enough” and RPV encourage all members to use this catch phrase where possible.

There were four major items that came out of the workshop that RPV will advertise in the media.

It was discussed and accepted by members that ratepayers require a Local Government Ombudsman as now in place, a Telecommunications Ombudsman, a Water Ombudsman and so on.
If this is possible then this appointment has to have ”teeth”. The appointment would have to be an independent appointment answerable to someone like the Chief Municipal Inspectorate. This body’s decisions would be final.

There was concern from those attending on how the developer contribution plan (DCP) is been handled. This fund is where a developer pays a contribution to a Council based on the projected cost of the project. 10% of that project is to be put into a trust fund at the council for future infrastructure and other projects such as open space.
In the new draft there is no mention of this DCP which was put into the local government act back in 1989. Some councils are using this plan, others seem not to be. There are many millions of dollars involved in this plan and ratepayers are the losers when these monies are not being collected. In the new act it is the responsibility of the 78 councils in Victoria as to how they are to handle this DCP

There is concern that in the draft of the new act there is no mention of any accountability regarding the use of the corporate council credit card. It was reported in the media last year that a country CEO was charged with 67 offences with the alleged misuse of the corporate credit card. How could this happen. In the draft of the new act there is no mention as to any accountability regarding the control of council credit cards. RPV are recommending that the councils audit committee, who meet every three months, should monitor these credit card payments. It’s reported in the South Australia media that all of the 68 councils in S.A. are been investigated by the Auditor general regarding the use of the council credit card. It is beyond belief that there is nothing in the new act regarding the control of the credit card in Victoria.

Implementing a plan regarding the handling of complaints at councils seems to have hit a brick wall. Back in March 2015 the ombudsman Debra Glass made a stinging attack on how complaints were been handled at councils. The then LG Minister Natalie Hutchins stated that she would legislate to have an independent body handle complaints. Minister Hutchins is now in another portfolio and it would seem that nothing has happened. In the draft of the new act it is stated that an independent body will be set up to handle complaints, but this independent body will be set up by council with no ratepayers involvement.

Jack Davis

Mildura report from the ratepayers vic conference

RV Public meeting Saturday 24 March 2018
As President of the above Ratepayers Association and Committee Member Ratepayers Victoria I was asked to speak on the progress of the Mildura branch and to prepare a report for our web site.
Since the formation of a ratepayers association and the subsequent evolving into part of Ratepayers Victoria, we have achieved significant milestones in Mildura.
From the time we formed in late 2015 we found ourselves under attack from a hostile council and particularly the Mayor. Whether from staff, the CEO or any councillors, the attacks in the main were via the Mayor.
Obviously Mildura Rural City Council(MRCC) saw a ratepayers association as a threat, begging the question “why?”
Through our resilience and remaining focussed on our goals we slowly turned things around. We had a young and energetic businessman elected to council in 2016 and over the past 18 months we have seen a major transformation. I believe key to our success has been my insistence of not retaliating to the negativity or attacks against us by those who viewed us as adversaries. There was plenty of it, however any retaliation I felt was wasted energy and merely gave ones critics the forum to continue the criticism.
We now have a new Mayor, a group of 5 of the 9 councillors who are approachable and we have regular meetings with the Mayor and Deputy Mayor.
I attribute our success to the strength of our team as we have been fortunate to have gathered people who have expertise that actually surpasses that of the executive of MRCC and the Mayor is drawing on that expertise. MRCC staff are finding it more difficult to pull the wool over the eyes of our councillors.
I encourage anyone thinking of forming an association to gather people around them who are energetic and dedicated in the first instance and if possible, some with accounting and business management experience. The latter 2 points are sadly lacking in many councils.
We promote the formation of regional associations as those of us in the regions are actually subsidising the state and therefore metropolitan councils. We pay up to 3.5 times the General Rate and we do not get anywhere near the services that Melbourne people take for granted.
One example, Mildura has not had a passenger rail service since the early 1990’s. This means that every regional community between Ballarat and Mildura has lost a basic service that is available to every major city across the state and services all towns en route.
I believe all regional municipalities would benefit by having their own associations, thereby creating a united force and presenting a single voice through Ratepayers Victoria.

Other matters addressed at the meeting were rate capping and Developer Contribution Plan(DCP)
The Director of the Essential Services Commission, Andrew Chow gave a presentation and explanation of rate capping and how it works.
I thank Andrew for his continued availability and willingness to speak at these functions and we must understand that his function is to explain how the system is set up and how it works, not to enter into discussion of how we would like the system to work. I believe that if Andrew’s level of professionalism was more evident across the board, we would be in a far better place.
The conversation on rates I believe has to be much broader than it is currently. Victoria appears to be the hardest on regional councils than any other state.
By way of example, the model used in Western Australia(WA) sees rates from Albany in the south to Kununurra, over 3500km to its north paying residential rates with minimal variation to Perth. WA rates are struck on the “gross rental value” rather than the “capital improved value(CIV)” as used in Victoria, resulting in a much fairer rating system that is decided by the rental market as opposed to CIV which is calculated by council.
As part of our thrust, should we be pushing for government to look at the various models around the nation?
Note: Rates are a “TAX”, an “AUSTRALIAN TAX”! This is not my opinion; it was a ruling of the High Court of Australia (Sydney Municipal Council v The Commonwealth of Australia ¬–[1904]) and is still quoted to the present day. This makes the application of this “TAX” at least questionable. How has it avoided the principles of equity and fairness that apply to taxation law?
Developer Contribution Plan(DCP)
This whole system deserves some serious scrutiny.
Billions of dollars are involved and in the main, these funds are not being managed within the legislated guidelines and the projects itemised in DCP’s
Developer Contributions, paid by developers for infrastructure is in many cases, are not being used for the projects itemised in specific DCP’s nor are councils wishing to vary from the DCP making the request to the Minister for Planning as required and appear to simply be using the funds elsewhere.
In the case of MRCC, it was found that almost $2,000,000 earmarked for a skate park and a library upgrade not only didn’t go ahead, they were not even mentioned and only came to light because our association was approached to look into the matter. Every requirement laid down in the DCP was not followed in this instance and in our opinion was not intended to see the light of day. This is but one example within a DCP that totalled approximately $48m and is one of 3 DCP’s in MRCC, just one regional council. It appears to be everywhere.
A brief search of DCP’s across the country shows similar anomalies with one council earning $4m interest on DCP funds held begging the question as to where that $4m was used. According to the guidelines, it would have to be part of the/belong to the DCP.
Finally, I want to thank Jack and Beaty Davis, Frank Sullivan and the committee for organising this meeting and look forward to the next conference.
Phil Douglass
President: Ratepayers Victoria-Mildura Branch

Our submission on the review of the Local Government Act

The Local Government Act 1989 provides the framework for the establishment and operation of Victoria’s 79 Councils. It the overarching legislation for Council elections, powers and operations is about 500 pages long and has been amended numerous times. You virtually need to be a lawyer to understand and follow the existing Act.

The Government maintains it was a major election commitment to review the Act because it was outdated, flawed, and that the Local Government sector had sought reform for some time. A discussion paper was prepared in 2015 and following an extensive consultation process involving the local government, the community and review of 333 submissions on 6 December 2017 a Draft Bill was released for public comment.

Submissions closed on 16 March 2018 and Ratepayers Victoria made a submission. We indicated that while the Draft Bill is an improvement on the existing Act we consider that it requires substantial improvement before it is suitable for placing before Parliament.

The aim of the Government was the Act would tell people clearly what councils do, how the community can become involved in Councils and be able to better understand the value and role of a Council. However the Draft is still over 300 pages long and our contention is that it remains very difficult for the average person to understand and follow.

An objective of the review was to provide more autonomy for Councils and to cut unnecessary red tape by being less prescriptive. This involved removing prescriptive council decision-making rules and replacing these with high level principles requiring transparency and accountability.

While we agree with Councils being more outcome focused, we are concerned that less prescription will may make it more difficult to make Councils accountable. We are all aware how Councils use the current Act to avoid scrutiny and make it extremely difficult to get answers to probing questions.

Some examples of our concerns about the Act being less prescriptive are:
• Councils can develop their own Governance rules including how they conduct meetings and how they can delegate to committees,
• Council can determine the form and availability of meeting records,
• while the Minister may issue good practice guidelines it is not clear what the penalty is if a Council does not comply, and
• the Draft Act provides for the each Council to produce its own Complaints, Community Engagement and Public Transparency Policies. We do not agree with this requirement as we could have 79 Council with different policies.

Another of our concerns is that the proposed Bill does not address one of the community’s main concerns and that is addressing and satisfactorily resolving community complaints. There are 7 different organisations which deal with complaints or have an overview role of Councillor or Council staff behaviour.

Our suggestion to avoid confusion is that there should only be one point of contact for the community to deal with an unsatisfactory resolution of complaint to a Council and this should be to a Local Government Ombudsman (similar to the Ombudsman for Insurance, Energy and Water, Public Transport, Telecommunications, etc.). If the Local Government Ombudsman becomes aware that a complaint is a possible breach of the Act then the complaint should be referred to IBAC for further investigation. We suggested that the cost to the community for this change will be minimal because it is only a relocation of existing organisations and staff, and does not involve the introduction of a new organisation.

We noted that dealing with inappropriate Council behaviour is still overly complex and difficult to follow. Conflict-of-interest is still mentioned on 19 pages in the Draft Bill and that the various sections relating to the overall Councillor behaviour is unnecessarily protracted and run to well over 100 pages. This also seems to be excessive and overly complex when compared to the relatively few pages which are directed to dealing with staff behaviour.

The Draft Act provides for Minister will appoint a Local Government Advisory Committee comprising 5 Mayors. We have some concerns with the process of appointment and in our submission we called on the Minister to give ratepayers an equal opportunity and establish an equivalent committee comprised of representatives from ratepayer groups.

The Draft Bill proposes that Councils produce a 10 year Strategic Plan, a 4 year Council Plan and for the Mayor to report progress annually on the four year Council Plan. While we strongly support these requirements we believe that this in itself will not make a Council more accountable to the community for its performance.

It is proposed that Chief Executive Officers will be appointed for 5 years with the eligibility for re-appointment for a further 5 years. We oppose a 5 year term and suggest it should only be a maximum of 4 years to be consistent with the term of a Council.

At present there are 5 different models of Ward and Councillor representation. It is proposed that this be reduced to two models. There is no evidence or information provided to indicate that a reduction in electoral representation structures as suggested will, in the Government’s own words, “enhance democracy, and revitalise local democracy and diversity of representation”.

While our major concerns are outlined above there are some aspects of the Draft Bill we support (subject to suggested improvements which we detailed in our submission) and these include:
• deliberative community engagement,
• greater transparency,
• continuation of capping of rates,
• greater Ministerial oversight of Councils,
• Council to establish an Audit and Risk Committee with greater powers,
• Councils to have a gift policy, and
• Mayors to be continue to be appointed for only one year.

Overall our submission amounted to a total of about 60 pages and we commented on about 100 clauses and as our deputy president has pointed out, we only have one opportunity for a new Act to be right as it will be many years before it is will be reviewed again.
Dr. Alan Nelsen
Treasurer RPV

Setting up a Ratepayers group in Shepparton

Ratepayers Victoria are proud to announce that we visited Shepparton on Tuesday 27th February 28, 2018 with the purpose of setting up a ratepayer group in Shepparton.
RPV were interviewed by the Local Channel 9 station regarding this and the interview was shown on the Local Channel 9 news at 6.00pm the same day , which did explain the purpose as to why RPV wants a ratepayer group in Shepparton
RPV have booked a hall to oversee a public meeting in Shepparton to get the ratepayer group up and running
Date 27th March 2018
Time 7.00pm—–9.00pm
Place Senior Citizens Hall Welsford Street Shepparton
Please come along to this meeting and assist us to get the ratepayer group up and running in Shepparton
Any enquires please contact our Vice president Frank Sullivan 0438555805