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Unauthorised variation to CVC’s advantage

Geoff Helisma |

The disconnect between a decision made by councillors and how council staff sometimes carry out the decision was plain to see at the April 17 Clarence Valley Council (CVC) meeting – in this case, though, CVC stayed within budget and reaped an $8.9million advantage.

During discussion about the construction of a new cell to receive waste over the next decade at the Grafton Regional Landfill, the council’s general manager, Ashley Lindsay, apologised to councillors for what Cr Karen Toms described as a “a huge variation without senior staff knowing”.

In October 2017, councillors approved a $903,267.72 (ex GST) tender to construct the cell and authorised the general manager to “approve any lump sum tendered contract variation items up to 10% of contract sum”.
At last week’s council meeting, it was revealed that “council staff applied the tendered schedule of rates to the increased footprint and authorised a variation in the sum of $321,772.18 [ex GST]” – substantially more than the 10 per cent general manager’s authorisation.

However, the total estimated cost of the project, $1,490,703.94 (ex GST), is within the $1,563,638 (ex GST) budget and, as a result, the landfill cell 4a’s capacity was increased by 30 per cent above what was initially proposed.

The opportunity to increase the cell’s capacity was the result of realigning an adjacent stormwater drain.
Staff put it this way, in part, when justifying the decision: “This adjustment provides an increase in the life of the cell by approximately 12 months and has a notional value estimated at $8.9m.

“The additional footprint improved the cost effectiveness of the project and was subsequently authorised as it was the only opportunity to utilise this section of the site in the development of the landfill space.
“This area could not be used or accessed for use again in the future.”

Meanwhile, at last week’s council meeting, Cr Toms asked the general manager: “If an investigation has already taken place, are you now satisfied that you understand how this could occur: that staff could change the tender specifications resulting in a huge variation without senior staff knowing?”

Ashley Lindsay: “Yes, I believe we have now put in place changes to process and there is a better understanding from the officer involved, as to what their responsibilities are and where they lie.

“It’s very difficult to discuss this in open forum because this relates to a particular staff member’s actions and that person has been dealt with.

“From my point of view, being responsible for this is very embarrassing and I apologise.”

Councillor Toms’ initial motion, to have the general manager investigate and report to the June CVC meeting on “how and why this large variation occurred without senior staff’s knowledge”, was challenged by Cr Richie Williamson.

“Mr Mayor, I think I have to call a point of order, with regard to this being a staff operational matter, rather than a matter of policy,” he said.

Mayor Simmons deferred to the general manager; Cr Williamson asked: “Mr GM, in your opinion, does this instruct you to carry out a function that would not be seen as policy and cross to operational matters?”
Ashley Lindsay: “Yes, I believe it would.

“An investigation has already been undertaken.

“The officer involved has been dealt with under the provisions of the Local Government Award.
“The matter has been dealt with.”

The mayor subsequently ruled Cr Toms’ motion out of order.

Councillor Toms pressed further; pointing out that staff had also failed to bring “two-monthly progress reports for the construction of the landfill cell that will identify any project variations”.

Councillor Williams again called a point of order.

“The questions should be on the motion Mr Mayor, and I think that is somewhat of an overreach,” he said.

Ashley Lindsay: “If you want to discuss this matter, we will have to go into confidential session.

“We can’t talk about this in open forum.”

However, when all was said and done, councillors unanimously agreed to “receive a report to June Council meeting on policy changes if any recommended for Council’s consideration aimed at preventing unauthorised budget over-runs of the nature reported at point 2”.

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