Carol Altmann – The Terrier

Tonight I want to pause and reflect on this simple fact: the Warrnambool City Council is now the subject of not one, not two, but three investigations.

One of those investigations is the Ombudsman’s inquiry into the misuse of corporate credit cards.

The second is the council’s own internal inquiry into these credit cards.

The third is a Worksafe investigation into alleged bullying.

And the fourth – revealed here on Friday afternoon – is an investigation by the Local Government Inspectorate into the sacking of the former CEO Peter Schneider by Crs Sue Cassidy, Mike Neoh, Kylie Gaston and David Owen.

What a freaking mess.

And all of it – ALL of it – will come at a cost to ratepayers, which is the bottom line of this latest disgraceful manoeuvring, backroom dealing and secrecy.

We are footing the bill.

We will pay for Mr Schneider’s payout, whatever that is, because we still don’t know.

The Four Horsemen involved in lopping off the CEO’s head were happy to swing the sword, but haven’t had the spine to reveal how much it will cost ratepayers, because that information will undoubtedly upset voters as they head toward the October election.

The councillors don’t want that bitter truth spoiling their campaigns.

Best to distract ratepayers with other shiny things, like bike paths and taverns and new grass at Reid Oval.

And the four councillors involved in the coup brought in all the lawyers they needed to get rid of Mr Schneider, and guess who pays for that?

We do.

How much was spent on these lawyers? We don’t know.

And who decided to get that legal advice?

It sure as heck wasn’t supported by all seven councillors, because three of them – Crs Tony Herbert, Peter Sycopoulis and Robert Anderson – were dead set against the whole idea.

This begs another key question: can four councillors rack up a legal bill without the approval of the other councillors?

I am no expert on the finer details of the Local Government Act but the Inspectorate is, and I hope it will pull this question apart during its investigation, because, as a ratepayer, I have a vested interest.

We all have a vested interest, because the four councillors involved have been spending my money – and yours – and we deserve to know the full story.

Rates notices are going out as we speak and blowing people away: I am getting messages every day from people shocked by how much we pay in Warrnambool compared to other cities.

I am also talking to people worried about what lies ahead as the full economic impact of the C19 virus kicks in.

And yet here are four of our councillors, blowing hundreds of thousands of dollars on lawyers and payouts for reasons which are all secret.

The inspectorate’s investigation will probably take some time, but my hope is that the four councillors who are now part of this investigation will step up themselves and tell the public the full story about this coup and the cost.

They know the truth.

As we inch closer toward the October election, there will be many shiny distractions and photo ops and promises, but the two things that I am hearing voters want the most right now are transparency and integrity.

Transparency and integrity.

Over to you, councillors.

If you would like to support the work of The Terrier, please make a contribution to the tip jar.

Terrier Tip Jar

Carol Altmann – The Terrier

Here is a story of two lavish Warrnambool dinners, held two months apart, costing more than $2000 and paid for via another Warrnambool City Council corporate credit card.

“It’s just one credit card,” Mayor Tony Herbert keeps repeating, “just one”.

No, not one. Not two. Now three, and it’s not over yet.

I have to keep rolling these out, because two months’ after the first bombshell hit, the WCC still refuses to accept it has a deep-seated culture of entitlement and secrecy that has seen questionable spending of public money for years (#notallstaff).

This time it’s a dinner at the Myrtle Bar and Kitchen last July for perhaps three or four people, including a current councillor, who between them spent almost $700 on servings of eye fillet, five bottles of shiraz (@$79 each) and more wine by the glass before things wrapped up a few minutes before midnight.

The guests, I am guessing, must have had a decent old hangover the next day.

But wait, there’s more. There always is.

Another dinner, costing an eye-watering $1476, but for more people – maybe 10 – was held at Pippies By the Bay restaurant in late May last year and included dishes of eye fillet with crayfish tail, abalone entrees, yellowtail kingfish, duck breast, fresh oysters and desserts.

The food was washed down with five bottles of wine and six glasses of champagne, with several more wines bought by the glass before everyone piled out the door and into the night.

Both of these dinners were paid for by a senior council manager using a WCC credit card and were held less than two months apart.

I don’t know what these dinners were for and perhaps they were of enormous benefit to Warrnambool, so on Monday I asked the senior manager and the councillor three simple questions:

i) the purpose of each dinner?

ii) the demonstrable outcome for Warrnambool as a result of each dinner?

iii) who signed off on the cost of each dinner?

I still don’t know the answers to those questions, but you can read the response today from the WCC media adviser in full here.

I don’t want to incite a riot and this is a truth I hoped I wouldn’t have to expose, because I trusted the council would be in full blown action mode by now, but it just doesn’t get it.

All the council hopes to do is tweak a few internal policies and pray the whole thing goes away: it won’t.

Because this is not about catching people breaking the law – which is what Cr Herbert fails to grasp – but exposing the steaming pile of inappropriate and unjustifiable spending that gives so little return to the ratepayer.

It’s this unjustifiable spending – via poor governance – that people want independently audited, cleaned up and cleaned out.

There was the perfect chance for the Mayor, CEO Peter Schneider and the councillors to stand before the public at at last Thursday’s emergency meeting and say we are so sorry for allowing your money to be wasted. We are on to it. We are taking it very seriously and we are doing all we can to flush it right out.

Instead, they all – bar one in Cr Hulin – behaved like kids dragged before the headmaster, twitchy and testy, as if they didn’t want to be there, because they didn’t.

Local MP Roma Britnell recently confirmed to a resident that both she and the Local Government Minister were poised to intervene: “The opportunity was provided to the city council, by both myself and the Minister, to conduct an independent review, they have chosen a certain way to proceed,” she wrote.

So the council was dragged kicking and screaming to the table and it showed.

Cr Herbert stuck to his mantra. Cr Anderson sat there and said nothing. Cr Neoh – briefly – lost his temper, while Cr Gaston stood up and announced she was “very confident” all was well.

No, Cr Gaston, all is not well.

Let’s not forget that this council first talked about breaking the rate cap in 2017, yet throughout 2018, the unbridled spending on food, drinks and alcohol rolled on.

Nothing changed.

And because nothing changed, we are now picking up the bill through higher rates.

It is outrageous and yet we know it is just one part of a much bigger picture where so much waste was and is allowed to happen.

There was nothing illegal about a senior manager buying a shed for $100,000 and the council selling it for $2000. There was nothing illegal about throwing $3 million of taxpayers’ money into Flagstaff Hill and it now costing ratepayers $750,000 a year to prop up. There is nothing illegal about building an unnecessary roundabout outside the Warrnambool Bowls’ Club where Cr Anderson is a member.

And there was nothing illegal about council staff spending hundreds of dollars on food and wine, because it was happening in plain sight and approved by those in charge.

I have now reported on three council credit card holders who have indulged in questionable spending, and there are more (#notallstaff).

If our councillors don’t know about all of this by now, then our CEO is not doing his job for his $320,000-a-year package.

I know Mr Schneider is a busy man, but he did find time to email me last week, not with any answers or insights, but asking me to refrain from naming council staff.

As a journalist, I never publish a name without it being relevant, but I will wait and see – in this case – if the senior manager and councillor involved will step out and name themselves.

In the meantime, those of us outside the tent will continue to dive deep, down to the very bottom of this culture of entitlement and waste, and use every muscle we can to turn it around.

We still have some way to go.

If you would like to be part of The Terrier, you can throw something into the tip jar below.

Terrier Tip Jar

Carol Altmann – The Terrier

These were my questions about the two dinners:

i) the purpose of each dinner?

ii) the demonstrable outcome for Warrnambool as a result of each dinner?

iii) who signed off on the cost of each dinner?]

I will let the Warrnambool City Council response speak for itself. Here is it in full:

“We are aware you recently emailed questions relating to credit card expenditure to a councillor and Council officer.

This is Council’s response to those inquiries.

As we have previously advised, Council is fully aware of its reporting obligations to referral authorities and any actions that are required.  Those obligations are taken very seriously. The regulations around reporting responsibilities mean that Council cannot confirm whether a referral has been made and nor can Council provide publicity or commentary on the process.

The constraints on Council around the referral process have been made known to the media on several occasions in recent weeks.

The questions you have asked are also part of a current FOI inquiry initiated by you. Given these matters are yet to be finalised, it would be inappropriate to provide further detail at this time.

In addition to the above, at the recent Special Council meeting the following resolution was passed:

1a)       That Council, via the Audit & Risk Committee, immediately (Audit & Risk Committee Meeting of the 27 August 2019) engage an External Auditor to undertake an audit to review and assess the adequacy of:-

• Existing policies, governance, reporting and investigation processes/procedures in the handling of the current credit card misuse issue that was identified in September 2018.

1b)       The scope of the audit to include:-

            SCOPE

Review the adequacy of Council policies, procedures and processes in relation to:-

• Dealing with expenditure authorisation and delegation;
• Trigger points for reporting (unusual transactions and/or misuse and/or fraud) to the Audit & Risk Committee (via confidentiality reports or meetings);
• Trigger points when an auditor should be brought in (i.e. the period after unusual/misuse has been identified to when possible fraud is suspected);
• Guidelines on “taking face value explanations” vs “appropriate inquiry”;
• Guidelines to ensure there are procedures to mitigate and prevent the acceptance of face value assumptions;
• Adding another layer of probity and transparency by providing trigger points for the use of an auditor.

1c)       Should the External Auditor require clarification of the scope of the audit, as outlined in 1b) then the Auditor shall communicate directly with Cr Neoh and Cr Cassidy and the Chair of the Audit & Risk Committee.

1d)       Once appointed, the External Auditor to meet, in camera with Cr Neoh, Cr Cassidy and the Chair of the Audit & Risk Committee, to outline the scope (in accordance with 1b).

1e)       That the External Auditor report directly to the subsequent (post 27 August 2019) Audit & Risk Committee Meeting or early if called by the Audit & Risk Committee Chairman.

Carol Altmann – The Terrier

It has taken a while, but I finally have an official response from Mayor Tony Herbert as to when councillors were told about thousands of dollars worth of unauthorised spending on a Warrnambool City Council corporate credit card.

And, thanks to a growing tribe of trusty terriers, I can also tell you more about thousands of dollars spent by the council for accommodation at Flemington, including a Saturday when the races were on.

First to the Mayor.

Cr Herbert’s statement is in full below, but the short answer is Cr Herbert was the only councillor told by former council CEO Bruce Anson about the credit card misuse.

The briefing happened in November, shortly after Cr Herbert was elected Mayor, and after the errant spending by a former senior manager, David McMahon, was apparently picked up by finance staff in September.

The council’s Audit and Risk Committee wasn’t told.

The then-mayor Cr Robert Anderson wasn’t told.

None of the other councillors were told, and I believe at least one found out about the rort when it was exposed by The Terrier two weeks ago.

Remember, councillors are there to represent us and the CEO answers to them, not the other way around.

 

As we know, the council holds briefings with councillors all the time. It’s where all the good stuff happens: the real discussion, debates and arm wrestles that used to happen in open council meetings that stretched on until midnight.

It’s also where confidential issues are raised.

But for some reason, our elected representatives –  other than one – were not told of a major financial breach by one of the council’s senior managers who, at that point, had been asked to pay back more than $4000 and I believe up to $6000.

If I had not lodged an FOI in October last year, none of us would know a thing about any of this and Mr McMahon would still be in his highly paid job.

And if we hadn’t, between us, blown this thing right open, the fresh investigation into Mr McMahon’s spending and the use of all 81 corporate credit cards would not be happening.

That is how things were allowed to operate within certain circles at council for years.

Even now, we are still not allowed to know who within council has a credit card, the spending limits, and the value to ratepayers, such as what tangible results or reports we see from the thousands of dollars spent on numerous conferences.

Thanks to the terriers out there, however, we can find out more than what the council officially tells us.

For example, through Freedom of Information I learned that more than $3500 was spent on sending up to six council staff to Flemington Quest for four days in July 2017.

Even though we paid for it, the council has refused to answer questions about this event, including why the accommodation included a Saturday and a Sunday night for at least one person, if not two.

It turns out – thankyou terriers – that the Flemington Quest is next to the Flemington racecourse which hosted the 2017 Victorian Tourism conference on the Monday and Tuesday, 24-25 July.

So perhaps the council sent six people, including two senior managers, to the conference. (It sent seven people to the same conference last year – site of the infamous Cape Schanck booze up.)

But wait, there’s more. There always is.

It also turns out – thankyou again tenacious terriers – that Flemington was also hosting a major racing event, Recognition Race Day, on Saturday 22 July 2017. Trainers Darren Weir and Jarrod McLean had horses running.

So, did some council staff arrive on the Saturday so they could go to the races?

I am a hopeless punter, but in the absence of any other explanation from the council spokesman, I bet they did. 

As we know, this whole issue is not just about unauthorised credit card use, but also spending which was considered – for years – to be perfectly okay. 

 

To get to the bottom of it, we will keep peeling back the layers. There is so much more to come.

In the meantime, here is Cr Herbert’s statement in full:

“I am responding to your question about the exact date of notification.

If you would like to support the work of the The Terrier, you can  always throw something into the tip jar.

Terrier Tip Jar

Carol Altmann – The Terrier

How to save $700,000 in seven days, instalment #2:

When Warrnambool Mayor Tony Herbert revealed last December, without a hint of irony, that up to $30,000 would be spent on consultants to test how ratepayers felt about a rate rise, it raised an obvious question: how much does the Warrnambool City Council spend each year on consultants?

The answer for 2017-18 is close to a million dollars, or $927,000 to be precise.

Unfortunately that is about as precise as I can be, as the council has not provided any significant detail on what these consultancies entailed or how this figure compares to other years.

What this means is I can’t tell you if $927,000 is normal in one year, or lower, or much higher than for other years.

I am going to take a punt that other years would not be lower, based on the number of council reports, masterplans and projects that have been rolled out in recent years.

The only breakdown provided for the $927,000 was this from council spokesman Nick Higgins:

“Examples of consultants used in 2017-2018 include: valuation of the Warrnambool Art Gallery collection (necessary for insurance), participation in the Community Satisfaction Survey (required by the State Government), arterial road assessment (for advocacy to improve roads managed by VicRoads), heritage advice and for the management of the community solar bulk buy program.”

I had a line-by-line look at the council’s annual report for 2017-18, and learned consultants were also hired to prepare a strategic plan for the foreshore caravan parks, prepare the kerbside recycling contract, and for a valuation of the council’s land and buildings.

Mr Higgins said via email – quite correctly – that all councils use consultants.

“Warrnambool City Council’s use of consultants and the expenditure on consultants would be unexceptional,” he added.

This may be true, but in an environment where ratepayers are being asked what services they are prepared to see cut to avoid a rate rise, I think we could do with some more detail, don’t you?

At a state and federal government level, spending on consultants is included in the annual Auditor General’s report and is picked over by political journalists to determine where the dollars are going.

No such transparency is enforced at the local government level.

It may well be, as Mr Higgins explained, that “consultants are used because they have specific expertise or knowledge that council does not have” and hiring short-term consultants is cheaper than permanent staff.

(It is worth remembering that there are 731 people working at Warrnambool City Council – full time, part time and casual – and last financial year the cost to ratepayers was $31.5 million.)

Again, however, we have no way of being able to make that assessment or, to be frank, keeping an eye on how much is spent each year in total.

It is a figure that is simply not reported in any of the council’s financial statements or annual reports.

Instead, the $927,000 for this year is treated as an unavoidable expense and one that, I note, didn’t make it into the ratepayer survey that closed earlier this month.

Is there any fat to be trimmed on that figure? Do we, for example, really need a consultant to tell us what to do with our caravan parks? And how many consultants’ reports end up going no further?

Before there is any attempt to push rates above the rate cap, these questions deserve to be answered.

More tomorrow.

A follow up: I tried to get a further breakdown on the $775,610 cost of the two public toilet blocks I wrote about yesterday, but the council says such a breakdown is commercial-in-confidence.

A builder contact, however, said while he wasn’t sure about that particular tender, which he agreed seemed high, there were often less obvious costs with construction work including:

architect fees 20-40k, engineer 15-30k, feasibility study 10k, land surveyor 10k, legal fees 10-20k, traffic engineer 5-10k, fire engineer 5-10k, town planning 5-10k, building permits 10k, Wannon Water fees $50-$80k, council project management 30-60k, Aboriginal heritage study 30-40k, demolition 10-20k, associated paths 50-80k, landscaping 20-20k, safety management plan 5-15k, site safety 15-25k, traffic control 10-20k.

As to how many of these actually applied to the toilets in the botanic gardens and Swan Reserve, we will never know but I am still at a loss as to how they could cost more than a whole new home.

If you would like to see The Terrier keep digging up, sniffing out and chewing on local issues, please make a small contribution below.

Donate