Minister's order hobbles councillors' control of finances
NSW Minister for Local Government Mr Ron Hoenig has issued a last-minute Performance Improvement Order which will hobble Central Coast councillors from controlling the council's finances for up to two years.
The Order sees control transferred to a number of unelected officials including the Deputy Secretary of the Office of Local Government, the Council's Audit Risk and Improvement Committee and Council general manager Mr David Farmer.
It will be in place for 12 months, covering the period in which the council's 2025/26 Budget will be adopted.
The Order was made on Monday, September 2, giving the Council just seven days to respond.
"I will consider all submissions made to me by Council during this period before deciding whether to issue an Order," said Mr Hoenig in his letter to Council Administrator Mr Rik Hart.
A special meeting of Council considered the order on Friday, September 6.
The Order came after nominations closed on Wednesday, August 14, and postal voting opened on Monday, August 19, with the decision to impose it not made until after pre-poll voting had started on Saturday, September 7.
Reasons given for the order include "budget discipline", "financial sustainability", "maintaining staff expertise" and implementing recommendations of the McCulloch Inquiry into the Council's financial crisis.
The Order lists requirements under four headings - staffing, finance, governance and meeting practices - as well as reporting.
The Deputy Secretary has direct power over five of the actions, as well as indirect control through a quarterly review of compliance.
Under staffing, the Council cannot change delegations, undertake a restructure or terminate the general manager's contract without the Deputy Secretary's "concurrence".
The Order states: "Council must implement the adopted budget and operations plan for 2024/25."
It goes on to require: "Any significant changes must be agreed by the Deputy Secretary."
The Deputy Secretary can also prevent Council from amending its councillor/staff interaction policy.
The Order requires that the "Council must engage its Audit, Risk and Improvement Committee on 'any significant changes' to council's priorities direction and take into account any recommendations,"
The quoted phrase "any significant changes" does not make clear whether it relates to any other requirement of the Order and is not defined in the document.
The Order gives the general manager the power to update the staff list that may be contacted by councillors.
It also gives the general manager the power to exclude the public from a councillor briefing where he "is satisfied that grounds exist under the Act" to do so.
The general manager may also "impose limitations where disrespectful or excessive use" is made of a system allowing councillors to make staff requests.
Other provisions of the Order include implementing any ongoing recommendations from the McCulloch Inquiry.
These included financial training for councillors.
It requires the Council to publicly document the impact of all Council's resolutions on Council's Long Term Financial Plan.
"Council must not make financial decisions that impact adversely on Council's financial metrics as measured through the Office of Local Government financial indicators."
The quarterly reviews are required to include a "business reporting statement", use of the councillor request system, and a report of disorderly conduct at council meetings.
Beyond the general underlying assumption that incoming councillors would otherwise act irresponsibly, a number of provisions of the Order presume councillors would behave illegally.
For example, it requires the Council to maintain an appropriate level of unrestricted cash and expend externally restricted funds only for the purpose for which they are set aside.
Council must take necessary steps to ensure timely and accurate financial monitoring and reporting
Council must also ensure that best practice governance standards are implemented and maintained.
Council must ensure its code of meeting practice complies with the Model Code of Meeting.
Practice.
Council must not make decisions at councillor briefings and workshops.
The Order does not say what would occur if the action was deemed by the Minister not to comply with the Order.
However, that part of the Local Government Act provides the Minister with the power to withdraw councillor allowances and to compel councillors to vote as directed by the Minister.
Responding to the Order, Administrator Mr Rik Hart welcomed the Minister's "intention to issue a Performance Improvement Order".
"We concur with your view that the Order will serve the purpose of ensuring that the good work undertaken over the last four years is not lost in the transition to an elected Council."
Presumably, "we" referred to him and the general manager Mr David Farmer.
SOURCE:
Central Coast Council agenda item 2.1, 6 Sep 2024