After perusing some of the published financial affairs of the South Gippsland Shire Council, I continue to express my deep concern with the management, governance and professionalism of the operations of this council.
Regretfully, I find no positives.
I see massive overstaffing at the top with nine councillors, one CEO and 14 executives.
At 19,000 ratepayers that is a KPI of 792 ratepayers per executive. I find that unbelievable.
It would be of great public interest to discover the employee establishment in relation to each executive.
To date I have been unable to find this but hope to detail positions and numbers (as full time equivalents) including relevant contractors not on the official establishment in the near future. This would translate into a very interesting and telling KPI indeed.
The Comprehensive Income Statement published by SGSC for the year ended 2012 contains an expense of $4.612 million which appears on the balance sheet as a liability.
The Cash Flow Statement for the year ended 2013 contains a cash payment to Vision Super of $4.588 million, extinguishing the liability. The difference being the discount allowed.
Note 35(b) to the Financial Statements 2013 refers to the Defined Benefits Plan, one of two Superannuation Plans the SGSC operates.
Apparently, the Local Authorities Superannuation Fund’s actuarial investigation as at 31 December 2011 identified an unfunded liability of $ 406 million, excluding tax.
Council was made aware of this shortfall on 2 August 2012. The liability to the Council was $ 4.612 million. No mention is made in the documentation to the council’s past or future involvement in this fund or expectations of future payments and amounts.
In relation to this financial and operational disaster I would like to ask council the following questions:
1) Who is responsible for the maintenance and administration of this fund.
2) Why was this person(s) not aware of this liability.
3) Why is this archaic, out-dated and outrageously expensive Defined Superannuation Benefits Scheme still in operation by the SGSC, and what employees or what class of employees are the beneficiaries.
4) Why was no provision made in prior years for at least an estimate of the most likely shortfall in the fund and who is the accountable person(s).
5) Is the person(s) accountable still employed by the SGSC and if yes, why.
6) What system is currently in place to prevent similar occurrences and what professional approach has been adapted to mitigate the volatility of this fund, particularly in the present uncertain environment.
I am much surprised that the outrageously high council rates have been allowed to develop for so many years to such an extent that all I see is an unmitigated disaster.
As a young accountant, my then mentor told me that the art of taxation is the ability to pluck as many feathers from the goose with the least amount of hissing; and to be very wary of hissing geese.
I can only conclude that the deafening amount of hissing, around for some time, has not been taken seriously, but treated as irrelevant instead.
A 1,150 metre block of land with a very pleasant dwelling, 17km from the Brisbane City Centre in an expensive suburb, attracts a council rate of just under $ 2,000 per annum.
A 750 metre block of land in Venus Bay with a pleasant but modest house demands council rates of just under $3,000.
Comparison between the two blocks is difficult due to the Venus Bay land being in an area totally bereft of any service whatsoever and in that regard vastly inferior.
The difference may well be much worse if all factors are taken into account.
I am happy to continue to meet interested parties to discuss issues and solutions and would welcome relevant comments, suggestions and proposals.
There is sufficient time before the next council elections to formulate and develop appropriate, effective alternatives.
Gus Blaauw, Venus Bay