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It’s a ‘horse and cart’ question

At last week’s extraordinary Clarence Valley Council meeting, five of the nine councillors supported an application to the Independent Pricing and Regulatory Tribunal (IPART) for a special rate variation (SRV) of 6.5 per cent for each of the next five years, beginning in the 2016/17 financial year.
Each of the councillors put their opinions forward during debate before the decision was made, but it was during questions to staff and the mover of the motion (the mayor) that provided insight into the thought processes of the councillors opposed to the decision, particularly Andrew Baker, Jim Simmons and Karen Toms; and the reasoning of the general manager Scott Greensill and corporate director Ashley Lindsay.
While Cr Margaret McKenna also voted against the decision, her reasons were different to councillors Baker, Toms and Simmons – she failed to gain support for a motion to change the SRV to 5.2 per cent each year over a seven year term.
Councillors Baker, Toms and Simmons wanted to know why staff had not yet looked for ‘efficiency savings’ before the council made its decision on Tuesday November 24.
There was some confusion around how or when the 24 discretionary services earmarked for cutting would be implemented, too.
Councillor Toms said she wanted to understand: “How all of a sudden we can find efficiency dividends; why haven’t we been able to find them without a special rate variation?”
RW (Richie Williamson): “I’m not sure if that can be answered – Mr General Manager?”
GM (general manager): “We have been operating in accordance with [the] processes we have in place; this is a [motion] to find [savings] – we haven’t had a resolution to find those in the past.”
Cr Baker asked for the GM to repeat his answer.
The GM said that no direction from councillors had been give to find savings. “Part of this resolution would be a direction to go forward and actually find those amounts … and bring them forward for council’s consideration in March [as per the final decision],” he said.
KT (Karen Toms): “I’m a bit gobsmacked by that reply, especially considering just a few months ago we were looking for efficiency savings to fix up something that was missed [in the 2015/16 budget].” At this point, some discussion took place, which established that efficiency savings needed to be found to make up for the shortfall as a result of a 6.5 per cent increase, when compared to an 8 per cent increase.
Councillor Baker then asked for the decision to be deferred for a month, so as to have an indication where the savings might be found; however, the mayor said Cr Baker’s proposed ‘amendment’ would contravene meeting procedure and could only be made as a foreshadowed motion – this meant it was not debated.
KT: “If we can make efficiency savings, why we didn’t we actually attempt to do this to become Fit for the Future?”
The GM said the Fit for the Future submission was a “completely separate processes” based on the 8 per cent recommendation.
GM: “So the variance between the 8 and 6.5 per cent has got to be found somewhere.”
AB: “Does that mean if we adopted the 8 per cent variation we wouldn’t bother with the efficiency savings?”
RW: “I’m not sure if that can be answered, that would be a matter for council today.”
GM: “If council decides on a particular figure in efficiency savings, then that becomes a direction, which I would have to comply with. So it’s not about whether we are going to find efficiency savings, it’s what council has nominated … in this [motion].”
KT: “Is there a reason why no efficiency savings are listed if we go for 8 per cent?”
AL: “If council is of a mind to seek less, we recommend you specify the difference … as efficiency savings or reductions in services that we have to find. So you’re setting a target for us.”
JS (Jim Simmons): “We’re getting a lot of things going around with discretionary services and efficiencies – why wouldn’t council be looking at the services it provides before council it applies for an increase above the limit; why don’t we review those things? To me, we’ve got the cart before the horse, why aren’t we going the other way?”
AL (Ashley Lindsay): “We are following our adopted path, I guess. In May last year we adopted a strategy to consult with the community about a SRV and services … [however] a review of services is going to take some time.”
Mr Lindsay said that ratepayers had indicated they were “clear on continuing” with the services, “but don’t want a significant rate increase.”
“We need to make a decision about the SRV to comply with the Office of Local Government guidelines … and our long term financial plan; the services review will be ongoing, part of which would contribute to the $7.465million,” he said.

AB: “I wonder where the indication that the public were against a reduction in the range of discretionary services came from, when in the first of our survey questions, which shows up on page 15 [of the IRIS phone survey report], says that only 33.6 per cent were against a reduction in the range of discretionary services. Later on [in the survey report], when asked which ones to keep or lose, there’s a much … clearer indication that the public were against the reduction in discretionary services.”
GM: “What seemed to be fairly clear from the IRIS advice was that the interpretation of those particulars could be taken several different ways. How they are interpreted is at the discretion of the individual, because of the way that the statistics were collated.”
Councillor Toms said a former resolution had given the GM the “approval to look for efficiencies and not wait for this resolution, as per his answer earlier, that he was working under the existing budget. Why are we waiting when there are clearly resolutions from the past giving him the authority to do so?”
GM: “We are undertaking reviews. But what the [motion] before you states is it actually provides a number or a target … and that will be a matter for [councillors] to determine, where the lines get drawn in regard to how much efficiencies are required.
“Therefore, as far as reviewing of services, we are reviewing them; we have been for quite some time, but what we’ve got now in front of us says that we must save X; and that is a figure, which, combined with the SRV collectively over the five years, will work us to a sustainable council, which is what the SOAP [Strategic Organisational Action Plan] document is about, and it is what the Fit for the Future submission is all about, as well.
“So what we’re looking at here is long-term financial responsibility and that is what the council has got in front of them.
“How council chooses the combinations and permutations to achieve that is up to [the councillors], but what you have in front of you is a solution. By setting a target it gives me an indication of what to go out and look for.”
KT: “Considering the 8 per cent SRV flagged in the Fit for the Future submission isn’t enough, shouldn’t we be looking for more than the difference between … 6.5 per cent and 8 per cent?”
The mayor pointed out that the $7.465million in efficiency savings is the minimum figure; point 4 [of the decision], “it doesn’t set a maximum”, he said.
Note: This is an edited recounting of what was said at the meeting.

 

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