The 2016 -17 Budget Consideration;

Budget Considerations;

Councillor Peter Harle JP

Peter Harle JP

Some Councillors had been involved in budget considerations for several months. Most discussions dealt with the “big picture” and the state Government requirement that Liverpool City Council be “Fit for the Future” or face amalgamation. Much later, Councillors were made aware of major unforeseen asbestos problems and the enormous remediation costs and the obvious impact on the any proposed budget.

Initial discussions focused on budget deficits ranging from around $840k to as high as $10M, the latter if Council continued to spend at the previous year’s rate.  Clearly major cost cutting to Councils overall operation was essential.

Note, from 2008 onward Council had operated without a deficit budget. So how is such a high deficit possible this time?

This term of Council (2012-16) implemented many new but costly initiatives.

One outstanding example is the expanded operation of the Councils Media Department, a costly new initiative consuming several million dollars annually. It included significant costs in publishing the Mayor and Deputy Mayors messages in multiple ethnic newspapers despite opposition from several Councillors labeling it a “vote buying exercise” of particular benefit to the Mayor and Deputy Mayor.

Another is the operational cost of Mayors unit, its Staff tripled, the one part time PA to the Mayor increased to full time plus several additional full time staff. Theses included; a Policy Advisor, and when that position was challenged, (the Mayor does not make policy, Council does) renamed it to a Political Advisor and appointed two more full time positions renamed as “Research Officers”. That change allowed both positions to be “moved” financially from the Mayors unit to the CEO’s unit. It “appears” to reduce the real cost of the Mayors unit and adds it to the unquestionable CEO’s Unit; overall cost was around $2M.

Several worthwhile but costly innovative changes were implemented that will pay dividends in the future, such as the implementation of a computerised “e-planning” system resulting in streamlining the time and cost of lodging Development Applications by using Digital Technology. This Council is one of the first to implement such a system and supported by all Councillors.

There was also the costly re-branding of the City logo, glossy colour brochures, media campaigns and fan-fare costing several million dollars. Was it worthwhile at this time? Residents may have had reservations about our previous Logo, affectionately referred to as the “bar graph” it was unique and incorporated Liverpool’s Heritage.  The Colourful “Kindergarten building block Logo” may be modern “eye candy” it never the less is a questionable cost, driven by ego and a need to be different to our past.

There were the costs of challenging the proposed Twin Intermodals, the Concrete Recycling plant and several Development Applications, all worthwhile but adding significantly to the operating budget including numerous consultancy costs on top of significant Industrial Relations Issues and consequent Court representations.

So where else has Council spent money it did not spend in previous years?

There were several Interfaith Dinners and in particular one that ended with a highly controversial event leading to the cancellation of similar future events. There were monthly Street Markets and the Starry-Sari night taken over from a previous community funded festival, all were innovative but questionable in terms of their objectivity and success.

The above considerations resulted in various “cost cutting” proposals including cutting the operational cost of Media Unit and reducing the CEO salary by $50k.

Also included were “efficiency” savings to the operation of Councils Works depot. The latter was “code” for implementing external consultants to manage Councils outdoor workforce and outsourcing its cleaning staff.  The proposal is often referred to as the Propel Management system.

Certainly efficiency savings should be implemented where possible however Council should be in control of its staff, not an external management organisation. Council should be capable of developing a management system that includes Key Performance Indicators (KPIs) in line with those developed in neighbouring Councils to ensure an efficient cost effective system is in place.

I am not aware of any Council in NSW contemplating introducing outsourcing its workforce management to an external “profit” driven organisation. That proposal has effectively been stopped in the current modified budget. However Management should be addressing inefficient work practices with all parties concerned using a conciliatory approach rather than a provocative one.

If the budget is analysed carefully it is obvious the “fees and Charges” have been raised considerably compared to previous budgets, yet no-one commented. These increases were not apparent until brought to my attention by several submissions from concerned ratepayers. The “fees and charges” had increased by an average of 6.5 times the CPI increase (CPI = 1.7%) or 11% and in some instances by up to 53% on the previous year’s figures.

One such rise is the increase in the Waste Collection Charge that is separate from the Rate Charge, it has risen from $371 to $411 pa, an increase of around 10% which will net Council an additional $3.8M.

Families with children participating in competitive sports are already paying heavily for the use of Community Facilities; they face the same increase, a significant burden on most families especially those with several teenagers. Wages have not increased by 11%.

That is one reason among many that I reconsidered my support for a motion to change the publicly exhibited budget. The fact that no-one wrote to Council in support the proposed budget does not mean that all ratepayers agreed with it, in fact six submissions were critical of the budget.

Council under the Mayor’s leadership has spent records amounts of money, money it did not have and would not receive from current rates and fees and charges. To put it bluntly, Council has been sadly lacking in its fiscal responsibility by spending at an unsustainable rate leading future Councils into greater levels of debt.

The budget issue is not settled and subject to further debate and a Rescission Motions. It may include proposed cuts to the $500k for the Men’s Shed, the $200k to the CCTV and the cancelling of the Starry-Sari Night in addition to the previous proposed cuts. Irrespective, the budget will be in deficit once all proposed changes are implemented, but exactly how much is yet to be revealed.

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