Addendum Agenda of Extraordinary Meeting

Extraordinary Meeting 4 May 2016

Motions of Urgency

MOU 01

Resignation of Councillor Anne Stanley - Request to Minister of Local Government to Dispense with By-election

Strategic Direction	Leading Proactive Council Provide business excellence and financial sustainability to deliver services that meet community expectations
Key Policy	Local Government Act 1993
File Ref	112890.2016
Report By	Maree Stewart – Council & Executive Services Coordinator
Approved By	Gary Grantham – Chief Financial Officer / Director Corporate Services

Executive Summary

On 29 April 2016, Anne Stanley resigned from the Office of Councillor at Liverpool City Council, effective immediately.

This report seeks a resolution of Council to allow the Acting Chief Executive Officer to request permission from the Minister of Local Government to dispense with a by-election and fill the casual vacancy left by Anne Stanley‘s resignation at the Local Government elections scheduled for 10 September 2016.

RECOMMENDATION

That Council:

1. Respectfully seek leave from the Chairperson to deal with this matter as a matter of urgency pursuant to clause 17.2 of Council’s Code of Meeting Practice.

2. Note the resignation of Anne Stanley from the role of Councillor for the City of Liverpool, effective Friday, 29 April 2016.

3. Delegate authority to the Acting Chief Executive Officer to write to the Minister for Local Government on behalf of the Council, seeking that the requirement for a by-election to fill Anne Stanley’s seat be dispensed with under the provisions of s.294(2)(a) of the Local Government Act 1993.

4. Notify Councillors of the Minister’s response as soon as possible after it is received.

5. Thank Anne Stanley for her service to the Council and the residents of the City of Liverpool.

REPORT

Clause 294(2)(a) of the Local Government Act 1993 authorises the Minister for Local Government to grant permission to dispense with a by-election when a casual vacancy in the Office of Councillor exists within 18 months of the next ordinary election. Clause 294 of the Local Government Act 1993 is shown below:

“294 Dispensing with by-elections

(1) This section applies if a casual vacancy occurs in the office of a councillor, including a mayor elected by the electors of an area, within 18 months before the date specified for the next ordinary election of the councillors for the area.

(2) If such a casual vacancy occurs in the office of a councillor (but not the office of a mayor elected by the electors), the Minister may, on the application of the council:

(a) order that the vacancy not be filled, or

(b) order the holding on a stated day of a by-election to fill the vacancy and revoke any earlier order made under paragraph (a).

(3) If such a casual vacancy occurs in the office of a mayor elected by the electors, the casual vacancy is to be filled by the Governor appointing to the vacant office a councillor nominated by the council.

(4) If the council does not nominate a councillor for the purposes of subsection (3), the Governor may appoint one of the councillors to the vacant office.”

It is recommended that the Acting Chief Executive Officer be authorised by Council to seek permission from the Minister of Local Government to dispense with a by-election and to instead fill the casual vacancy left by Anne Stanley’s resignation at the ordinary elections scheduled for 10 September 2016.

The reasoning behind this recommendation is that:

a) A by election will be costly. An estimate of cost is difficult to make, but it is worthwhile noting that a by-election requires a commitment of resources that is almost as great as an ordinary election.

b) The next local government election is due in September 2016, meaning that the utility of a by-election is limited.

ATTACHMENTS

Nil

Extraordinary Meeting 4 May 2016

Chief Executive Officer Report

CEO 01

Budget 2016/17

Strategic Direction	Leading Proactive Council Provide business excellence and financial sustainability to deliver services that meet community expectations
Key Policy	Long-Term Financial Plan
File Ref	114502.2016
Report By	Deborah Cuthbertson - Executive Assistant to the CEO
Approved By	Michael Cullen - Acting Chief Executive Officer

Executive Summary

At its meeting of April 27, 2016 among other items regarding CFO 05 “Draft Delivery Program including the draft 2016/17 Budget and Revenue Pricing Policy (Schedule of Fees and Charges”), Council sought a report on how the deficit can be reduced by the CEO in the following areas:

1. Reducing the Business Improvement Directorate budget by $250,000

2. Reducing the CEO’s budget by $100,000 in the research area

3. Reducing the Strategic Communications & Research budget by 50% and/or $570,000 whichever is the higher

Council has gone through a rigorous process to identify potential savings across its operations, including the areas identified. Indeed the Business Improvement Directorate has an important role in assisting all areas of Council identify and implement service and productivity improvements. This is critical to ensuring Council has a focus on meeting its Fit for the Future obligations.

Major savings of the order requested in these areas cannot be achieved without compromising delivery of services and activities detailed in Council’s 4 year delivery program.

The order of savings sought cannot be achieved without substantial restructuring of the organisation. Implementation of substantial restructuring in these areas at this time is not recommended. A newly appointed Council following the September elections and a newly appointed Chief Executive Officer will have views about a suitable structure for Council operations that are best not constrained by decisions prior to the election.

Importantly any major restructure of the units identified is unlikely to yield the saving levels identified, given redundancy and other separation costs likely to be incurred.

RECOMMENDATION

That Council:

1. Note the Report

2. Note that Management’s recommendation is that costs should be reduced across the whole of Council’s operations to achieve a budget outcome in line with its Fit for the Future submission consistent with previous and ongoing budget discussions.

REPORT

At its meeting of April 27, 2016 among other items regarding CFO 05 “Draft Delivery Program including the draft 2016/17 Budget and Revenue Pricing Policy (Schedule of Fees and Charges), Council sought a report from the CEO on how the deficit can be reduced by the CEO in the following areas:

1. Reducing the Business Improvement Directorate budget by $250,000

2. Reducing the CEO’s budget by $100,000 in the research area

3. Reducing the Strategic Communications & Research budget by 50% and/or $570,000 whichever is the higher

GENERAL COMMENTS

A Council election will be held on September 10, 2016. Given the proximity of the election a substantial restructure of the Strategic Communications and Research unit and Business Improvement Directorate is not recommended. Savings of the order suggested for these areas of Council cannot be achieved without restructuring. An incoming Council and incoming Chief Executive Officer will have views about an ongoing structure for the organisation that are best not constrained by decisions prior to the election.

The order of funds sought to be reduced from the three areas nominated will have significant operational implications. Communication with its ratepayers, businesses and residents is a key component of Council’s delivery program under its “Vibrant Prosperous City” direction. Similarly, business improvement activities are key to delivering Council’s “Leading Proactive Council” direction.

Council described a range of initiatives as part of its Fit for the Future case submitted to the NSW Government. The case for Council standing alone included strong initiatives around productivity and service improvements that allowed Council to progressively meet Fit for the Future benchmarks. Reducing the Business Improvement Directorate budget will mean existing and future improvement initiatives cannot be progressed and the ability to meet Fit for Future benchmarks will be at significant risk.

The cuts sought will require restructuring in the areas of operation nominated. There is a process agreed with staff and the unions with respect to restructuring involving managerial discussions, consultation with staff, advice to the union and Joint Consultative Committee discussions. Workplace change and redundancy procedures also require redundancy payments in line with years of service with an employer. For senior staff, depending on the term of a contract, a payout of up to 38 weeks may be required. Between the timing for consultation necessary, resources required to manage the process and likely payouts for any impacted staff any budget savings will be significantly eroded.

For all of these reasons operational savings across the whole of Council’s operations in line with current budget discussions is a better mechanism to yield an outcome consistent with Council’s Fit for the Future submission.

SPECIFIC MATTERS

Reduction of the Business Improvement Directorate budget by $250,000 is not possible without a reduction in staff. Restructuring will be required with consultation timeframes and redundancy and termination costs meaning negligible savings will be realised in 2016/17.

The Research function attached to the CEO’s office provides an important intelligence gathering role in relation to key issues impacting Liverpool, including transport, technology and emerging community issues. However, to broaden the function to support Mayoral and Councillor needs I intend to transfer the function to Council and Executive Services. The Office of the CEO’s budget will be reduced by the transfer of that function.

Reduction of the Strategic & Communications Unit budget by $570,000 or by 50% (whichever is the higher) is not possible without considering restructuring of the unit or cessation of a number of activities. If restructuring is required, timeframes and costs incurred in implementing that restructure will mean any savings will be significantly eroded. Council also has a number of commitments in relation to existing communication and media activities that will need to be met.

CONSIDERATIONS

Economic and Financial	A sustainable budget is a key to Council meeting Fit for Future benchmarks
Environmental and Sustainability	There are no particular environmental and sustainability considerations.
Social and Cultural	There are no particular social and cultural considerations.
Civic Leadership and Governance	To ensure compliance and good governance requirements a budget needs to be placed on public exhibition for 28 days and approved with required timeframes.

ATTACHMENTS

Nil

Extraordinary Meeting 4 May 2016

Chief Financial Officer

CFO 01

Supplementary Report - Draft Delivery Program and 2016-17 Operational Plan and Budget (including Revenue Pricing Policy)

Strategic Direction	Leading Proactive Council Position Council as an industry leader, delivering best practice and innovation
Key Policy	Long-Term Financial Plan
File Ref	110357.2016
Report By	Vishwa Nadan - Manager Financial Services
Approved By	Gary Grantham - Chief Financial Officer / Director Corporate Services

Executive Summary

Council at its meeting on 27 April 2016 considered a report on the Draft Delivery Program and 2016-17 Operational Plan and Budget (including Revenue Pricing Policy).

The resolution from that meeting is shown below in italics.

A Councillors Briefing Session was held on Monday 2 May 2016 and a supplementary report, detailing the information discussed is now being provided.

RECOMMENDATION

That Council:

1. Approve the amended 2016/17 Budget with a deficit of $3.734m as detailed in this report.

2. Delegate to the CEO to amend the draft Delivery Program, draft Operational Plan and the draft Revenue Pricing Policy (Schedule of Fees and Charges) that was presented in CFO 05, 27 April 2016 as a result of changes resulting from the approved 2016/17 Budget.

3. Places the draft Delivery Program and Operational Plan including the draft 2016-17 Budget and Revenue Pricing Policy (Schedule of Fees and Charges) on public exhibition for a period of 28 days to allow for public comments and submissions.

4. Receives a further report after a review of public submissions at the June Council meeting.

REPORT

Council at its meeting on 27 April 2016 resolved:

That:

1. A report (in relation to point 1) to come back to an Extraordinary Council meeting on the reduction of costs and options on how the deficit can be reduced by the CEO in the following areas:

i. reducing the Business Improvement Directorate budget by $250,000

ii. reducing the CEOs budget by $100,000 in the research area.

iii. reducing the Strategic Communications & Research budget by 50% and/or $570,000 whichever is higher.

2. Eliminate expenditure on all consultants in the Strategic Communications and Research budget.

3. Redirect the money from item 1 above to employ six new staff for the Carnes Hill Library rather than redeploy staff from our existing libraries which will put a strain on our resources and impact services to the community.

4. Eliminate the $500,000 efficiency savings from the budget numbers as these numbers are not real and cannot be quantified.

5. Eliminate the $800,000 efficiency savings from salaries as there is no specific detail behind the reality of these numbers. At a time when we are already short staffed in many of our front line services, we cannot put at risk our service level agreements with our ratepayers.

6. No rates are to be increased via the domestic waste charge with savings to come from departments and options to be presented by the CEO at the next Council meeting rather than our ratepayers bearing this cost.

7. Review the $1,425,000 asbestos cleanup cost item in the budget to show supporting working papers on how that item was determined. Considering that $5,000,000 has been spent in this financial year and that the total cleanup cost are estimated around $13,000,000, this item needs to be verified. A report is to be provided at the next Council meeting on the estimated clean-up costs of asbestos over the next 5 years. How these numbers were determined considering 6 months ago Councillors were advised that it wasn't even a $1.

8. No funding to be allocated to the stadium proposal from the budget given the concerns of Oasis in the past and its impact on the budget. Let’s not forget that an Administrator was appointed to the Council when our rates went through the roof to pay for the Oasis. This motion will protect ratepayers from the risk associated with the Mayor’s stadium funding model as our rates are one of the highest in SW Sydney. If we have $400m to spend on a stadium let’s spend it on rates relief, roads and parks. Council writes to all media in particular the Liverpool Leader and Daily Telegraph advising them of same.

9. Remove all funding for the night markets until the budget is brought back to surplus.

10. Charge a commercial rent on the coffee shop immediately as the current annual rental is only $1.

11. A 12 month freeze on all non-essential frontline service consultant fees.

12. Reduce the expenditure of the Destination Management Plan by $200,000.

13. Delete participation in the US studies project and cease all payments to the Mayor advisor Professor Blakely – (that’s over $65,000 a year currently).

14. Mayoral ball to be cost neutral (whatever gets raised is donated over the redemption of costs of the event.)

15. 50% reduction of funding to Starry Sari night whilst the budget is in deficit.

16. Cease budget funding for CCTV whilst the budget is in deficit (this is housed in the police station and has not reduced crime as it was being reduced anyway).

17. A complete analysis of the budget item listed as additional salary savings depot of $1.2m focusing on how it was calculated and what impact this will have on front line services?

18. Council prepare and submit a reconciliation for the period from 1 July 2015 to 31January 2016 showing total payments to Propel and details of the savings achieved for the same period focusing on:

i. breakdown of how the savings were generated

ii. confirm that these savings were made from the first month of the operation of the Alliance

iii. Council provide a breakdown of all expenses incurred by Council relating to Propel employed staff for the period 1 July 2015 to date and details on whether Council was reimbursed for these costs

iv. confirm if a substantial payment was made to Propel in January 2016

v. confirm if a purchase order for $48,000 to buy laptops for the Propel employed management team was raised this month and paid by our ratepayers.

19. The above changes to be incorporated into a new budget with the changes to be brought back to an Extraordinary Council meeting for review.

Amended Budget

Six Councillors, the CEO and the CFO participated in the fourth 2016/17 Budget Briefing on 2 May 2016. Table 1 below summarized the resulting budget position

Table 1

The amendments to the 16/17 Budget of an unfavourable $3.072m, results in a deficit of $3.734m. The deficit does not take into account any contingency relating to Council approving additional expenditure throughout the year.

Please note, Table 1 reflects the financial impact relating to NOM 02, 27 April 2016 relating to the Committee of Liverpool.

Additional Information Requested

Rates (Item 6)

As per CEO 01 from this Council meeting, once Council is advised of a final target, the CEO will implement an operation plan to achieve the approved budget position.

Asbestos (Item 7)

A broad budget of $6.4m was identified in December 2015 for the remediation works on the 22 sites identified in the Environmental Waste Audit. This was based on minimal investigation and information resulting from the EPA Audit. $5m was allocated for high priority works programmed for the 15/16 Year and $1.4m for the remaining lower priority works programmed for 16/17. The $5M budget was determined over two successive Budget reviews as more information became available. Works covered by the $5M are progressing very well.

As a result of the focus on the high priority sites, with the exception of two sites no further investigation has been undertaken on the 16/17 programmed works. For the two sites where investigations have occurred, Council is awaiting EPA input to finalise the approach and scope of the remediation works. As a result, no new information is available to adjust the $1.4m asbestos remediation currently allocated to the 16/17 Budget. If Councillors have access to additional information regarding asbestos remediation, if possible they should forward the details to the Director Infrastructure & Environment

CCTV (Item 16)

No direct budget lines exist for public CCTV, however the costs are estimated to be approximately $30,000 annually. Management advises against discontinuing the services as significantl funding was received from the Federal Government.

$1.2m Additional Salary Savings Depot (Item 17)

Note, a detail analysis has not been performed as this would require significant allocation of funds. At a high level, the $1.2m was estimated as a 6.9% overall efficiency relating depot salaries. A 5 day week would provide an average of 7.2 hours per day. The potentially unproductive time takes into account working practices and matters such as hours of daylight. The high level assessment concluded that workers impacted by the unproductive issues would typically lose 45 minutes per day on the 4 day week and nothing on the 5 day week. These savings were then compared to the total hours available and a % efficiency saving calculated. As not all staff are impacted by this issue, weightings were applied to the potential efficiency saving across the workforce ranging from 0% for clerical staff who do not suffer the impact of these matters to outdoor operational staff, such as in Parks and Road Maintenance, where we felt that the full impact would be felt.

Propel (Item 18)

Note, these items are “Commercial in Confidence” and are detailed in the confidential addendum.

CONSIDERATIONS

Economic and Financial	Further develop a commercial centre that accommodates a variety of employment opportunities. Deliver and maintain a range of transport related infrastructure such as footpaths, bus shelters and bikeways. Encourage and promote businesses to develop in the hospital, health and medical precinct (of the City Centre). Provide efficient parking for the City Centre. Enhance the environmental performance of buildings and homes. Deliver a high quality local road system including provision and maintenance of infrastructure and management of traffic issues. Facilitate economic development. Facilitate the development of new tourism based on local attractions, culture and creative industries. Further develop a commercial centre that accommodates a variety of employment opportunities (in the City Centre).
Environmental and Sustainability	Minimise household and commercial waste. Manage the environmental health of waterways. Manage air, water, noise and chemical pollution. Retain viable opportunities for local food production while managing land use to meet urban growth. Enhance the environmental performance of buildings and homes. Protect, enhance and maintain areas of endangered ecological communities and high quality bushland as part of an attractive mix of land uses. Raise community awareness and support action in relation to environmental issues. Promote an integrated and user friendly public transport service. Support the delivery of a range of transport options.
Social and Cultural	Raise awareness in the community about the available services and facilities. Provide cultural centres and activities for the enjoyment of the arts. Support policies and plans that prevent crime. Preserve and maintain heritage, both landscape and cultural as urban development takes place. Regulate for a mix of housing types that responds to different population groups such as young families and older people. Support community organisations, groups and volunteers to deliver coordinated services to the community. Promote community harmony and address discrimination. Support access and services for people with a disability. Deliver high quality services for children and their families.
Civic Leadership and Governance	Act as an environmental leader in the community. Undertake communication practices with the community and stakeholders across a range of media. Foster neighbourhood pride and a sense of responsibility. Facilitate the development of community leaders. Encourage the community to engage in Council initiatives and actions. Provide information about Council’s services, roles and decision making processes. Deliver services that are customer focused. Operate a well developed governance system that demonstrates accountability, transparency and ethical conduct. Actively advocate for federal and state government support, funding and services.

ATTACHMENTS

Nil