Cr_Andrew_McEwanCr Andrew McEwen, pictured, and his colleague Cr Don Hill have pre-empted the details contained in the South Gippsland Shire Council’s next budget, including the projected rate rise, by declaring their opposition to it. It’s not a good sign.

TWO South Gippsland Shire Councillors have broken ranks with their colleagues, only a week out from the release of the draft 2015-16 budget, and called for a complete overhaul of the way the council does business.
In a pre-emptive strike designed for maximum disruption, Cr Don Hill and Cr Andrew McEwen have declared that the shire council has got to stop spending “like a drunken sailor just expecting our community to pick up the tab”.
Accordingly they have called for the Nyora Hub (“save $8m”) and Splash Hydrotherapy Pool (“save $3.7m”) to be removed from the budget.
And while they haven’t publically called for consideration of any new shire offices in Leongatha to be dumped as well, at an anticipated cost of $18 million, it’s clear the issue is a sore point.
They say the shire should set savings and efficiency targets across all of its operations to stave off the slash and burn approach that will almost certainly follow the capping of rates by the State Government to the CPI in the 2016-17 financial year.
And they say the cutbacks should start at the top.
“The shire’s management structure is 20 per cent above what it needs to be compared with like councils and we’re out of step with best practice when it comes to setting clear targets for productivity growth and efficiency gains,” Cr McEwen said.
“To give him his due, (CEO) Tim Tamlin has foreshadowed a reduction in the number of directors.”
The two councillors have declared the shire’s ratepayers can no longer sustain “unaffordable rate rises” averaging 7 per cent per annum.
But their nemesis at the council table, Cr Jim Fawcett, has wasted no time in returning fire.
He has called their alternative budget statement a “look at me press release” rather than a genuine attempt to make a difference.
Instead he said last week the council was not in a crisis at all, it had low debt levels, higher infrastructure renewal rates than its peers and would meet the challenge of rate capping in its stride.
And he didn’t shirk the proposed offices issue either.
“We are spending $119,000 to determine our accommodation needs for the next 40 years. It’s almost 40 years since the present offices were built for the old Shire of Woorayl,” he told Gippsland ABC Radio.
But it’s likely the comments from these opposing camps are just the opening salvos in a budget review process that could be the most hotly contested in years.
It has already prompted strong feedback on the shire’s ‘My Say’ website.
Here are a few comments from Round Two of My Say:
(1.) “Your survey questions were awful! Where was a question on running services more effectively and efficiently? So many services waste money e.g. morning tea for MOW volunteers. Where was a question on looking to trim admin overheads? Where was a question on do we need new Council offices?”
* Response from shire: We have heard the message loud and clear that the community expect us to run our operations more tightly. We are proactively implementing ways to deliver our services more efficiently. This is a given, and why we haven’t asked those questions. Council is currently capturing over $5 million in productivity savings into the draft budget over the long term financial plan that we’ve achieved so far. More efficiency improvements are already being investigated and planned.
(2.) “Most organisations and government agencies have had in the past 10-20 years improved productivity and performance through better leadership. Most organisations have the capacity to raise productivity annually. Why should councils be exempt?”
* Community response: Absolutely agree – we need accountability of management – the size and cost of the administration needs to be restrained a leaner structure developed and a service delivery maintained and improved and a productivity agenda developed.
(3.) Comment about council taking the wrong approach by trying to identify less popular services than taking an overall approach to cost-saving: “I feel it’s too simplistic to prioritise the five broad functions, because within them there are lots of important activities. When I look at the big picture I can’t say that one function is more important than another. I can’t get past the first page on this basis.”
* Response from council: I think you might be starting to see how difficult it can be for Council to decide the level of importance to be given to different services, even at this broad level. It becomes even more complex when deciding between every service Council provides. It is a challenge and this is why we are asking people to consider, as a starting point, which of these main broad functional areas you care the most about.
Crs McEwen and Hill said in their statement this week that they believe “council is clearly at a crossroads. It can either continue operating as it has in the past and be forced into a draconian austerity budget, if the situation deteriorates through lack of strategic action or get on with running the business strategically”.
“Two paths are in front of it and indeed the community.
“One is to continue as is the other is to be driven by strategic business principles and measurable productivity and performance targets and to diversify income. Our alternative budget can save $101m over the long term financial plan and reduce rate rises to 2%.
“We have been raising the need now for two years for council to focus on productivity, performance, diversifying income streams and avoiding unnecessary expenditure ($34m unallocated last year). We have advised council frequently that the lack of action would put us into the predicament that we now find ourselves.”
Cr Andrew McEwen and Cr Hill said jointly that:
“Council’s current budget is a gamble in the short run and in the medium term, as it relies on both being able to increase rates above CPI, and running down asset renewals that force the costs onto future generations. It assumes that CPI will be 3% when it is currently tracking under 2.0%.”
“We are a $60m business and we need to develop a business strategy and approach to how we set targets for overall affordable budget, productivity growth, efficiency and effectiveness. We need to:
• Establishes clear quantified targets for cost savings in the organisation to deliver affordable rates rises and allow us to renew our 21st century infrastructure (community hubs etc).
• To develop business strategies/plans for shared services, raising productivity, asset realisation and organizational development to reduce costs and raise productivity, efficiency and organisational effectiveness.
• To develop business strategies for Coal Creek, caravan parks, pools and other key council assets/service to reduce costs and increase returns (to include establishing a money-making school camp at Coal Creek).
• Strategy to pursue more cooperative partnership between council and communities in the management of local facilities especially pools.
The budget will not officially released until Wednesday, March 25 but it is expected to detail an overall increase in rates and charges of 5.29 per cent.
The public consultation period is open until April 29, the council will respond to calls for changes in mid-June and approve the final budget document on Wednesday, June 24.