Carol Altmann – The Terrier

Why did the Warrnambool City Council last July suddenly move from a handshake deal to a written lease for a council-owned flat rented by a staff member for more than 30 years?

This question needs a whole separate story, and this is it.

 

To re-cap, the property in question is attached to the Archie Graham Centre at 130 Timor St, where the senior council staffer has lived since 1987.

And as I wrote yesterday, thanks to Freedom of Information* we now know that for decades the council had nothing in writing to cover this tenancy, including rent payable, any bond, term of the lease, utilities, repairs and replacements.

The council instead relied purely on a handshake deal, until July last year.

Why July last year?

Stay with me here, because this is where things get murky.

 

On 30 July 2018 I asked the council my first questions about this tenancy.

On 21 August 2018, the first story was published, prompting a huge response from readers.

In the days before that story was published, the council refused to provide a copy of the lease and shut down questions by saying it had “nothing further to add” – case closed.

Not quite.

 

I lodged an FOI application* asking for a copy of the lease agreement. These things take time, often a long time, and a copy of the lease was finally provided in mid December 2018.

The lease provided started on 1 July 2018 and ends on 30 June 2019 (and included at least three typos – see photo below).

 

It was immediately obvious to me that there was something odd about this lease document.

The big red light was the start date: 1 July 2018. 

Was it just a massive coincidence that I asked questions on 30 July 2018 about an on-going lease that just happened to be put in writing – after 30 years – from 1 July 2018?

 

The smell of fish was getting strong, but it became overwhelming when I asked the council spokesman in April why the council suddenly decided to put the lease in writing last July.

Here is his answer in full:  “While a verbal lease agreement is legally acceptable – and was accepted by both parties to the lease – given the external interest in the property Council decided to prepare a written lease.” (my emphasis)

So the written lease was in response to questions by The Terrier.

But hang on, there’s another red light: the official council date stamp on the lease is 18 June 2018 – five weeks before I began asking questions. (See photo below).

 

I went back to the council spokesman and asked if he could explain how the date stamp pre-empted my questions, and the explanation shifted.

The written lease was now the result of an internal review.

This review of council properties was apparently held in early 2018 and, blow me down, after 30 years, it zoned in on 130 Timor St.

“External advice was sought and provided and one of the actions arising from this review was the preparation of a written lease for 130 Timor Street,” the spokesman said via email.

“The lease was drawn up in June 2018 and executed by the tenant and returned to Council on June 18,” he wrote (my emphasis).

Wait a second. Which one was it? Was the written lease prompted by The Terrier’s questions in July, or by the internal review?

I again asked the council spokesman – (are you still with me?) –  and, this time, it was both:

“The move to have written leases for Council residential properties – although verbal lease agreements are legally acceptable – had two drivers. 

“One was you, the other – which preceded your interest – was external advice and a review undertaken by our property manager,” the spokesman said via email on 8 May. (my emphasis).

Whichever way I look at it, this date stamp just doesn’t add up. You can’t draw up a lease in June in response to questions asked in July.

So what am I trying to say here?

Well, I am saying that I believe when The Terrier started to ask questions and asked for a copy of the lease, this written lease was hastily prepared and dated retrospectively, to make it appear as if it had always been in place.

 

I don’t know who was involved in the preparation of this lease, but it was ready to go when I lodged my first FOI.

I believe things came unstuck, however, when I lodged a follow-up FOI, asking for a copy of any earlier written leases for this property.

There were none and this exposed the handshake deal that had been in place for 30 years – a handshake that I don’t believe we were ever supposed to know about.

Given the conflicting explanations, all the markers point to that conclusion.

Does any of this matter?

Yes, because this whole saga strikes at the very heart of the WCC’s transparency, governance and accountability for managing our public assets: that is the nub of it.

 

A 30-year handshake deal for a council-owned apartment might be legal, but it is a very dubious way to run the show.

As for the possibility of manipulating date stamps on documents, well, I will leave that for you to contemplate.

And this is why I am not naming the tenant. The name doesn’t matter: what matters is that this whole situation has been sanctioned by our council for years, to the point of hurriedly drawing up a lease, and this is of serious concern to me.

 

This is what makes this whole story of public interest and why I have pursued it for almost a year.

A final word from the council spokesman:

“Council no longer has verbal lease arrangements in place for residential properties that have a lease of more than 12 months.”

That, at least, is a start to ending the rot.

***

This story is the Terrier Tip Jar at work. All of the above is now public because of a series of Freedom of Information applications that were paid for by supporters of The Terrier. To be part of it, click below:

Terrier Tip Jar

Carol Altmann – The Terrier

Almost a year ago, The Terrier revealed a senior staff member of the Warrnambool City Council had been living in a council-owned, CBD apartment for more than 30 years.

Since then, I have been trying to get a copy of the lease.

As it turns out, there wasn’t one: the deal was based on a handshake deal.

This handshake deal – a verbal lease agreement – apparently covered everything from annual rental reviews, to repairs and the $12,000 replacement of a garage.

 

First, a quick recap.

The council-owned apartment in question is in the old bank building at 130 Timor St, which is part of the Archie Graham complex and where the staff member has lived since 1987.

According to the council responses to my questions last July and August, the apartment is leased for $190 a week, with the rent reviewed annually.

Any repairs to the property were also included in the rental agreement, it said, including a $12,000 garage that was built for the tenant mid-last year after an old garage was demolished as part of larger works at Archie Graham.

(To get the full background, you can find my earlier stories here and here and here. You can find the council’s original response and justification for the ongoing lease here. It essentially argues that because the property is linked to the Archie Graham complex, it would be difficult to rent out to most people.)

Given the prime property is owned by the people of Warrnambool, I was keen to see a copy of the lease agreement that had covered its use for three decades.

 

The council refused to supply a copy, so last October I lodged a Freedom of Information* application and in December last year was given a copy of a lease.

This lease shows a start date of 1 July 2018 and and end date of 30 June 2019. (More about this document later).

I lodged a second FOI application, this time for a copy of the lease that was in place before 1 July 2018 and that is when things shifted from the unusual to the unbelievable.

This FOI revealed that there was no written lease in place for a public building, for 30 years, before the one I was given that shows a start date of 1 July 2018.

 

To quote the FOI officer: “I have conducted a thorough and diligent search for the document you have requested, however as a result of gaining internal advice I have been informed that the document does not exist.”

“The reason for the nonexistence of the document is that prior to the current written lease, the preceding lease was verbal,” she wrote.

Verbal lease agreements are not illegal, but for long-term leases they are rare and I would suggest in government they are virtually non-existent.

The only time a verbal lease might be used in the public service is for short-term rentals, say up to three months, while a new staff member finds their own accommodation.

When it comes to a council lease of more than 30 years, for a CBD apartment owned by the public, you would assume a written lease would be mandatory.

 

I doubt you would find any other council among the 79 in Victoria that would have a similar, handshake deal in place with a council staff member, or anybody else for that matter.

In fact, when I first wrote about this apartment last year, I couldn’t find any other council that rented long-term accommodation to a staff member unless it was part of their contract, like a caravan park caretaker.

So it begs the question of who at the WCC started this handshake deal in 1987?

And who has since agreed to it continuing?

 

Most importantly, how did the successive WCC officers in charge of managing council properties ever keep track of it?

Were the annual rent reviews and any increases jotted down on a Post-it note?

And what about responsibility for repairs and replacements – including the $12,000 garage – was that documented in writing? Was there an understanding about the use of power, gas and water? How about a bond?

Apparently all of this detail was kept in somebody’s head.

 

This on-going, open-ended, verbal-only arrangement came to an end last July, when a written, 12-month lease was finally put in place, which opens up another whole storyline.

To be blunt, I believe how this written lease suddenly came about smells more than a fish-cleaning bin at the Hopkins River on a hot summer’s day.

That is the next instalment and you can read it tomorrow night.

****

This story is the Terrier Tip Jar at work. All of the above is now public because of a series of Freedom of Information applications that supporters of The Terrier have funded. To be part of it, click below:

Terrier Tip Jar

By Carol Altmann

It has been a bit like pulling teeth, but the Warrnambool City Council has finally released more detail about why it has rented two properties to two of its staff for – in one case – more than 30 years, and 14 years the other.

The five-page article posted on its website is a direct response to the stories that have appeared here about one senior WCC staff member living in the old bank building at 130 Timor St, part of the Archie Graham Centre, since 1987 and currently paying about $190 a week.

This property also saw about $43,000 from the Archie Graham capital works budget used to build a new garage, retaining wall, garden bed and sealed driveway in a spend that sources say incensed many of the Archie Graham staff.

The other property is a beachside former caretaker’s residence, currently rented at $221 a week.

Both are open-ended, on-going leases with no end in sight.

So, what is the council’s more fulsome explanation as to how these arrangements work and why they exist?

You can read the whole thing for yourself here – please, do – but the nub of it appears to be that these two properties are “unusual” and the council is lucky to find good tenants to rent them:

“Because of the unusual locations and nature of these properties if Council staff were not renting these properties they would not be made available for rent to the general public and Council would lose income.”

 

What exactly makes the properties “unusual”?

Well, according to the council’s explanation, the Archie Graham tenant is virtually a live-in security guard, turning off lights and appliances left on by the staff and centre clients, and, on occasion, even responding to attacks by vandals:

“Over a recent weekend the staff member was able to set in train urgent repairs when an intoxicated individual smashed a glass entrance door.”

 

Further, the tenant can only access the apartment via the main entrance to Archie Graham, which I guess when you put all of these things together, means that not all WCC staff could be entrusted with such an arrangement and they could not be guaranteed a good night’s sleep.

(Apparently councillors were also told privately in response to my stories that the tenant had to share a bathroom with the public. This does not appear in the public explanation and my sources say that such a claim is is not correct.)

The beachside house apparently has similar issues with noisy passersby:

“In the past the house at Shipwreck Coast Holiday Park has been made available to the public to rent but Council experienced difficulties in the rent being reliably paid and tenants finding the level of amenity acceptable with regard to being in close proximity to excited holiday makers.”

 

I will leave that image of the excited holiday makers for you to ponder.

As I say, read the full statement – it is too long to reproduce here – and I will finish with just one or two more points.

First, I recently asked the Local Government Inspectorate if these two lease deals breached the Local Government Act because, under the Act, a lease of more than 10 years must be advertised.

The inspectorate contacted the council CEO Bruce Anson and reported back to me that, no, the leases did not breach the Act because neither was for more than 10 years, even though one is 31-years long and the other inching toward 15 years.

I think George Orwell would be impressed.

I don’t know how frequently these leases are renewed, but the collective total for each is definitely more than 10 years. This, according to the inspectorate, is an “alleged loophole”.

Moving on.

Much of the council’s response has been about privacy and protecting people’s names and addresses:

“As a responsible landlord and to ensure the privacy and security of the tenants, Council will not broadcast the identities of the tenants in these homes.”

 

Some readers may also share this view.

But I have to point out that this issue is about due process, not particular individuals, which is why I have not published names.

Nothing written about the people in these two properties is not on the public record. You can visit the council offices and read the lease register, which is a public document and the reason it is public is because it deals with public property.

Of course Mr Anson, parts of the council, and probably the tenants in question, would all prefer we didn’t go poking about in lease registers and asking questions about rents and new garages and sealed driveways and forcing them to write long statements justifying their actions, but this is exactly what we need to do – and what I do on your behalf – because that, as we know, is all part of a healthy democracy.

A freedom of information application asking for copies of the two lease agreements is still being processed. Thankyou to those of you who donate $ to help me pay for these applications. If you too would like to support independent journalism, please consider making a small contribution below.

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By Carol Altmann

The Warrnambool City Council has pulled down the shutters on its leasing rules that have allowed a senior staff member to rent a council-owned apartment for more than 30 years.

It is two weeks since the story broke about a senior staff member renting a central apartment at the Archie Graham Centre for 31 years (@ $190 per week) and another staff member renting a beachside house for 14 years (@ $221 per week), with no end date for either lease.

Despite an enormous response to the story from people wanting to know more, the person in charge of such things, Revenue and Property Manager Glendon Dickinson, has declined to be interviewed.

A whole series of questions I sent to both him and the WCC media manager, Nick Higgins, have been left hanging.

These questions include basic things like who sets the rent? How often is the lease renewed? How were the tenants selected? How is the rent paid? Does the rent include utility bills?

After several days, the only comment forthcoming was this:

“Our leases are guided by State legislation including the Residential Tenancies Act.”

Do you find that answer satisfying? I find it insulting: not to me, but to all WCC ratepayers, who actually own these buildings.

The public service has very different rules around transparency, compared to a private company, but what we are seeing at WCC is not transparency, but secrecy.

One thing that is impossible for the WCC to ignore, however, is the new garage and sealed driveway that has appeared behind the apartment in question at the Archie Graham complex and has cost ratepayers $43,000.

The single garage was built by council to replace a dilapidated three-bay garage (two bays of which were used to store council junk) that was demolished to make way for new works at Heatherlie homes.

I understand the single garage was budgeted at $12,000. The project came in “around” $43,000.

Mr Higgins said the final cost included the garage ($11,638), rebuilding a collapsed retaining wall, restoring a garden bed and “the sealing of a previously gravel laneway”.

This laneway, which is the expensive part, is not used by Archie Graham clients, but, according to Mr Higgins, only “used by neighbouring tenants and the residential tenant at Archie Graham”.

The $43,ooo was pulled from the capital works budget for the Archie Graham Centre, the managers of which must be either scratching their heads, or beating it against a wall, at such an expense.

In explaining the cost, Mr Higgins said the council had received more rent from the “flat” over the years than it had spent on maintaining it.

You would hope so.

The rental income from the “flat” had also helped subsidise the maintenance of Archie Graham, he said.

Again, you would hope so. Paying rent, after all, is part of the deal when leasing a property.

But both of these things, really, are beside the point.

The point is that we still don’t know the full details of this lease agreement and how it came about.

The WCC – unlike dozens of councils I have looked at – does not have a property leasing policy which is designed to keep things transparent.

The only way WCC ratepayers would know these leases exist is to visit the council offices and ask for a physical document that very few people know is there.

So why does any of this matter? What is the public interest?

Well, first, the properties are owned by Warrnambool ratepayers. They are the “landlords” here and I think they deserve to know what is going on.

Second, these two leases are unlike any of the WCC’s other residential leases. Every other WCC residential lease either provides public housing for disadvantaged tenants, or short-term accommodation for new staff.

Thirdly, the leases are not part of a salary package and are not required as part of a job description, such as a caretaker at a caravan park.

So, combining all of these factors, the crux of this issue is twofold:

1. How did two council staff, out of more than 350 staff, manage to secure leases in prime-location, council-owned and maintained houses, that have lasted for decades?

2. Do these arrangements breach the Local Government Act?

I still don’t know the answer to #1 and I may never know.

But I do know that under the Local Government Act, if a council lease is to be for more than 10 years, the details must be publicly advertised. This is to allow people to a) know about it and b) have a say.

So how does an ongoing lease of 30-plus years slip under the radar?

Simple.

Break the lease into, say, five year lots – and keep renewing that lease each time. Presto, you have a lease that stretches for decades, with very few people knowing about it, and nobody having a say.

Something doesn’t add up here and until it does, we need to keep asking the questions, no matter how uncomfortable. And this is what I plan to do.

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[author] [author_image timthumb=’on’]http://the-terrier.com.au/wp-content/uploads/2015/11/vault3.jpg[/author_image]Welcome to The Vault – this is where Bluestone will place all sorts of subscriber-access-only material. If you have something you would like to submit, please email us at editor@bluestonemagazine.com.au[author_info][/author_info] [/author]

[dropcap style=”font-size: 60px; color: #A02F2F;”]F[/dropcap]ears of public liability was given as one reason for the Warrnambool City Council’s decision to chainsaw out a row of old tea tree from Pertobe Road. (See the story here).

Meanwhile, the roots of these two plane trees have lifted up sections of pavement in the Timor St council carpark, opposite the permit parking for the Archie Graham seniors’ centre and heading toward the walkway for Heatherlie Homes for the aged.

These sections of walkway, as of yesterday, remained open and unmarked.