MidCoast Council’s Mission Statement:
“We deliver benefits for our community in a way that adds value and builds trust”
Do we hear a round of distant booing?
In the midst of the Corona Virus pandemic with over 1,300,000 people infected, triggering a global and national recession that will have dire consequences on our local community resulting in businesses closing, thousands of people out of work, the chaos at the troubled MidCoast Council continues to grow exponentially, like the virus itself.
This all comes at a time when world and national leaders are working closely together in the interests of their nations. Here in Australia, we have witnessed Governments, Oppositions, Business and the Unions all collaborating.
However the broadcast of the recent MidCoast Council meeting of 25 March sounded more like a pack of rabid animals baying for blood and hunting in a pack to bring down a solitary Councillor who was raising issues that were not only in the public interest but of significant consequence to the people and the future of this region.
And having successfully forced Cr Peter Epov to leave the meeting, the attention was then turned to the only other Councillor at the meeting, Kathryn Bell, who also had the temerity to stand up for the community. Threats of suspension and sanctions also emerged but stopping short, in fear of being seen to have bullied two Councillors into leaving one meeting.
To Back Track
Two days prior to the Council Meeting of 25 March, a Webinar “COVID 19 Update” was hosted by the Office of Local Government (OLG) which we understand was attended by Council’s Mayor and General Manager. The event included the NSW Health Minister, Brad Hazzard and NSW Chief Health Officer, Dr Kerry Chant PSM.
At its conclusion after statements about future physical council meetings and the social distancing concerns, Dr Kerry Chant, said:
“I would urge Councils to postpone their meetings and communicate in different ways”.
‘Urge’ and ‘postpone’ from the woman who is the principal advisor to the NSW Government, who stands by the NSW Premier on her daily Corona Virus updates at the nationally telecast press conferences! Sounds pretty clear.
But this advice was not brought to the attention of the Council by either the GM or the Mayor, nor was there any discussion initiated by Council’s leadership to postpone the Council Meeting scheduled for 25 March as recommended by Dr Chant.
Attempts to Postpone
Cr Peter Epov exchanged a series of emails with the GM and Councillors calling for the postponement of the physical Meeting.
Cr Peter Epov:
“Frankly, I was stunned at the attitude of some, particularly after Dr Chant’s advice. Council should be at the forefront of setting the example to the community at this time of crisis and not capitalising on the loopholes in the regulations relating to meetings and social distancing.”
There seemed nothing was going to stop this meeting of 25 March from proceeding as chief on the agenda were two items of paramount significance to the Administration: The re-signing of the Audited Financial Statements 2018/19 and the Appointment of the Head Contractor for the conversion of the Masters Warehouse.
Amidst a massive global crisis Council’s Administration and a select group of Councillors were determined that nothing would stop the Masters project going ahead and committing the community to a $40 million dollar debt.
Re-signing of the Audited Financial Statements 2018/19
The saga of the Audit Financial Statements also continues. It appears that the NSW Audit Office has refused to issue the Audit Report to MidCoast Council until the 2018/19 Financial Statements were re-signed.
This is damning to Council’s financial mismanagement.
In October, last year, all Councillors with the exception of Peter Epov and Kathryn Bell, voted to present the 2018/19 Financial Statements as provided to Council on that day for audit by the NSW Audit Office. The adopted Council Resolution required the Mayor, Deputy Mayor, the General Manager and one other staff member to sign a formal declaration verifying those statements.
Cr Epov’s reason for voting against the resolution was,
“I didn’t vote to approve the 2018/19 Statements for Audit in October as I believed they were incomplete and there were blocks of figures missing.”
A recent comparison between the October version of the 2018/19 Financial Statements and those presented in the March 2020 Report undertaken by several former senior council officials, indicates there were 330 adjustments and changes.
Former Greater Taree City Council Mayor, Paul Hogan stated, “This is just astounding and it demonstrates both the lack of financial acumen of many of the Councillors and the strength of the Administration to force things through the Council. The October version of the 2018/19 Statement should never have been approved for Audit. There are Councillors and Staff who are going around blaming the NSW Audit Office, and the bushfires, for the delay, but it all comes down to the quality of the material that was presented in the first place.” It is truly embarrassing to be one of only three Councils that did not have completed the audit by the required time.
This Council has now been established for 4 years and instead of things actually getting better – they are getting worse!” And we still haven’t seen the Auditor’s Report nor an update Long Term Financial Plan which is critical to budgeting, financial planning and making significant decisions like proceeding forward with the Masters Warehouse Office Centralisation.”
Council Meeting 25 March
The tone of the meeting was set when a motion was passed to change the order of the business of the meeting to bring forward the new 2018/19 Financial Statements and the Appointment of the Head Contractor for the construction and fitout of the Masters Warehouse.
Epov’s motion was high on the agenda at the beginning of the meeting but in a sudden move it was replaced with Report 22 over-riding the intent of Epov’s motion.
This had the effect of side-stepping the Notices of Motion that Cr Peter Epov had been filed some ten days prior to the Meeting, regarding the Corona Virus and its potential consequences on the Council and the community; and a Motion calling for the suspension of the Masters Project for six months during which time the economic impact of the Corona Virus on the local community could be assessed and reviewed.
Cr Epov objected to the change in order of business using the word ‘sneaky’ for which, after some argument, and a threat of suspension from the Chamber, he was forced to apologise and withdraw the word.
Cr Bell questioned the “fairness” of the change in order of business, but this was also ignored.
Cr Epov argued that there would be severe local consequences from the Corona Virus that could befall the MidCoast Region including, unemployment, businesses closing and the inability by up to 30% of the community to pay Council and Water rates.
Council’s Financing Strategy for the project could also be compromised as the real estate market was collapsing and Council could struggle to achieve the $7M plus from asset sales.
He suggested that during the crisis the Master’s warehouse should be reserved for potential use as an emergency medical facility.
All to no avail and the appointment of the successful head contractor to convert the Masters warehouse into an office was made 7 votes to 3.
Rather disappointingly, those that were in favour of the project failed to either speak or put forward any cogent grounds for the project to proceed. And curiously, following the meeting, Deputy Mayor Cr Pontin’s comments on Prime 7 suggested that the project may not now even be commenced for some time.
The effect of the Council Resolution was to grant the General Manager a blank check to negotiate a deal which will be well over $10 million without any further Council oversight.
The last time this happened was with that now aborted $16 million Desalination Plant.
Absence of Key documents
The decision to proceed with the Masters project was made in the absence of several key financial documents including the 2018/19 Audited Financial Statements; a complete and up to date Long Term Financial Plan (which in the current crisis would appear to be critical); and a complete and up to date Quarterly Budget Review Statement for the December 2019 quarter (which was due back in February), something that in the future may haunt Councillors who voted for the Masters project.
Corona Virus Motion
Cr Epov also tried to introduce a debate within Council on the local consequences of the Corona Virus with a detailed Notice of Motion that;
“Council has a key role to play in supporting Federal and State initiatives, as well as identifying what we could do ourselves to support our Community. Many Council’s throughout the nation are responding rapidly to the crisis, with intelligent debates and introducing initiatives aimed at supporting their communities.
I want our Council to demonstrate some leadership, to discuss and address important areas where we could support our community and our local economy in this time of crisis. Specifically, our businesses, our unemployed, the disability sector and council staff. Such things as rate relief, acting as an advocate to Government, co-ordinating support to the community making sure things don’t fall through the cracks.
As well as being vigilant, putting systems in place to ensure our regional community isn’t forgotten or disadvantaged in this time where funding packages are being introduced, with laws and regulations changing on a daily basis.”
Epov’s notice of motion was opposed by a Councillor, and the General Manager weighed in suggesting several of the items in Epov’s motion were already being addressed by State and Federal authorities. In other words, it is not our problem, nothing to see here!
At which point the Mayor interrupted, followed by the Councillor who had initially objected to the Notice of Motion for a debate on the Corona Virus, calling on the Mayor to ask Cr Epov to apologise and withdraw the statement. The Mayor agreed.
Cr Epov did not apologise nor withdraw the statement, but left the Chamber.
Mysterious Report 24
Report 24, was the Quarterly Budget Review Statement December 2019, which was not presented to Council in February, as required. It is a statutory document that must be signed by a responsible accounting officer (within Council), and it is used to inform Councillors and the community as to how Council is travelling in relation to the 2019/20 Budget. It is also a very important document which should be used to inform Councillors when making major financial decisions, such as the Masters warehouse office fitout.
After Cr Epov left the Meeting a motion was moved by Mayor West and Seconded by another Councillor to the effect that Council adopt a total of 21 Reports in one single hit, this included all the accompanying recommendations. The remaining Councillors then approved 21 reports without any debate or question in one single motion.
Buried in the 21 reports was No.24, the Quarterly Budget Review Statement December 2019.
Report 24 as published online and presented to Councillors in hard copy, was missing the first, and most critical two pages of the Quarterly Budget Review:
The Income & Expenditure Budget Review Statement – Consolidated, and The Income & Expenditure Budget Review Statement – General Fund.
It appears only Epov noted this omission and the Report, without any reference to the missing pages, was adopted by Council.
Curiously, if one now examines Report 24, the Quarterly Budget Review Statement December 2019 on Council’s website, the Report’s missing pages have been inserted and the pages have been renumbered.
The significance of these two added pages which were not in the printed and published versions of the Council business papers before the Council meeting is that the Income and Expenditure Budget Review Statement – General Fund showed that Council was heading for a $25 million deficit after only six months trading, which was a jump of almost $10M from the previous (September) quarter.
What makes Council’s financial position even more fragile is that whilst they have several hundred million dollars in investments, these are all restricted (by law) as special purpose funds. Council only has $8 million in unrestricted funds for times of crisis and with an impending projected deficit of $25 million at the end of the December quarter. What will follow in the March Quarter?
Former GTCC Mayor Paul Hogan commented,
“It is mind boggling that a Council, any Council would consider approving a Quarterly Budget Review Statement without the two critical pages. And in the absence of the information contained in those pages, how any Councillor could even consider advancing the Masters project in the current economic crisis.
It says a lot that these two pages were not available to the community prior to the Council Meeting!”
Having now reviewed these ‘missing’ two pages and in the context of the entire document, I am of the firm view that Council should have suspended all the work on the Masters project, as reasoned by Cr Epov.”
It will be very interesting to see how Council deals with people who cannot afford to pay the council and water rates in this economic crisis.
On Thursday morning, 26 March, Crs Epov, Bell and McWilliams submitted a Rescission Motion in an attempt to have the Masters decision reviewed.
Paul Hogan explains:
“Generally the aim of a Rescission motion is to place temporarily stop on the implementation of an decision, thus allowing some time for all parties to review the circumstances and the information, to allow for dialogue; and to look at any new and or additional material before a final determination is made.”
Rather than allowing the Rescission Motion to be debated at the next Ordinary Council Meeting, an Extraordinary Council Meeting was announced by the Mayor and General Manager for the next day, some 22 hours later (Friday 27 March).
This was then followed by a further announcement on Thursday Night nominating an Extraordinary Meeting for Monday 30 November 2020.
Councillors who had lodged the Rescission Motion were not consulted regarding the timing of the Extraordinary Meeting.
Over the next three days, at what seems record speed for the Council, and at some considerable cost, Council staff worked to set up an a remotely linked livestream Council meeting which could be broadcast online.
Ironically, twelve months earlier Cr Epov had proposed that Council meetings be livestreamed but the idea was vehemently opposed.
Adds Paul Hogan, “This really was an abuse of process. These people have gone to extraordinary effort and cost to circumvent and expedite the rescission motion meeting for a matter which rightly should have gone to the next Ordinary Meeting of Council. Extraordinary Council Meetings should not be called at a whim, nor devalued frivolously.”
Cr Jan McWilliams was unable to attend the Meeting as she was in voluntary isolation following a cruise, and she subsequently was admitted to hospital. (She is now recuperating at home.)
Cr Peter Epov also advised the GM he was unavailable to attend prior to the meeting, although neither the Meeting Minutes nor the audio recording acknowledge this, as is normal procedure.
Cr Kathryn Bell did join the online meeting and put forward a solid case, but it was all to nothing, as the decision had been seemingly predetermined, illustrated by fact that not one single Councillor had the courage to speak against the Rescission Motion nor to justify why the contract for the fitout of the Masters warehouse had to be determined in such a frenzied rush. The Meeting was over in 10 minutes.
Seems we’re done and dusted folks.
I don’t know about you, but with the state of our hospital and a self-centred council, who seem uncaring of the looming Corona crisis by their non action, I’m not feeling too happy when the curve starts to rise as is predicted.
Will we be seeing the Councillors and the Mayor in the queue waiting for a bed and a ventilator?