Clarence Valley Council will set up a “wholly owned not-for-profit legal entity to take over the governance control, management and the continuing operation and function of Clarence Care and Support (CC&S).
The council was compelled to make a decision about CC&S in line with National Competition Policy, which is designed to “ensure that … publicly owned businesses [do] not enjoy any net competitive advantage simply because they are publicly owned”.
Councillors made their unanimous decision at the August 27 CVC meeting in a confidential session because the report to council “contained commercial information of a confidential nature that would, if disclosed confer a commercial advantage on a competitor of the council”.
The councillors’ detailed decision was released on September 9 in the council meeting’s updated minutes; however, any background information is yet to be released publicly.
Point one of the councillors’ decision was to “decline to transfer of all of Clarence Care + Support (CC&S) from Council to a non-Council not-for-profit entity, as proposed at a cost to Council in excess of $1.9 million”.
Councillors will “make up at least one more than one-half of the directors of the governing body”.
The new entity’s service delivery model will be “not less than the current level of service to current service recipients” and there must be “no disadvantage to existing service recipients, resid[ing] within the Council area”.
Current CC&S employees are protected under a “no disadvantage” period of three years.
In general terms, with the consent of the Minister for Local Government, the new entity will provide “community care and support services and … any other community benefit functions allowable to not-for-profit entities, as recommended by the governing body and approved by the Council”.
Councillors’ decision included forming a committee comprised of the mayor, deputy mayor and all councillors “to work with the general manager, a legal practitioner (experienced in setting up and governance of not-for-profit entities) and any financial advisor considered necessary”.
The committee will prepare “a business case, draft constitution, an operating model and a funding model suitable to the successful operation of the proposed new entity” by the end of October 2019.
“Commencing 1 December 2019 and subject to adoption of a constitution and any other transitional and loan funding arrangements,” the meeting minute states, CVC will “commence a 60-day public consultation on the proposed new entity’s arrangements”.
Nominations for community directors will be called for, “if required by the constitution … during the public consultation period” and their appointment will be considered at the February 2020 CVC meeting.
The council’s general manager, Ashley Lindsay, said that he had written to all of CC&S’s staff (and met with those not on leave).
He said the ultimate outcome would be a reduction, cost-wise, in the corporate support CVC currently provides to the soon to be former community-based organisation.
The council will “make all arrangements necessary to enable transfer of all CC&S operations, operating assets, functions and accommodation occupancy to the new entity in such manner to ensure uninterrupted continuation of CC&S operations”, the meeting’s minutes state.
Further, councillors decided to: “Assist the governing body of the new entity in the recruitment and appointment of a Chief Executive Officer or interim chief operating officer of the new entity and provide advance loan funding if necessary to enable early employment of a suitable executive officer.”
The council’s new business entity will commence trading on July 1, 2020.