Warrnambool City Council CEO to conduct operational review

"I have no preconceived ideas about the outcome of such a review, preferring not to speculate before I have the results at hand," he said in a statement.

The news follows a call by mayor Tony Herbert for an organisation-wide review of the council, which he said was "unsustainable in its current form".

With assets deteriorating faster than the council can fund their repair and maintenance, councillors this week ignored the outcry from ratepayers about an additional hit to the rate bill.

Despite a $30,000 public consultation which found most were against the move, councillors voted this week to seek approval from the Essential Services Commission to lift rates above a State Government-imposed cap in a bid to raise $2.1 million over three years.

The mayor and Cr Peter Hulin voted against the move.

The city now faces an eight-week wait to find out if the application will be successful. If the council gets the nod from the commission, the additional funds would be spent on roads, footpaths and other assets in urgent need of attention during the first two years.

In the third year, additional funds will go towards further asset renewal and to offset the increased costs for the new library/learning hub.

Mr Schneider said that while the prospect of higher taxes would never be popular, the commission would thoroughly examine the council's financial position before making its decision.

"The ESC applies an extremely stringent review criteria to ensure that all reasonable steps have been taken or are being taken to find efficiencies before an exemption to the rate cap would be granted," he said.

"Due to factors such as cost shifting by other levels of government, a reduction or the freezing of external grants as well as a drop in council revenue, we are now in a position where our assets are deteriorating faster than we can fund their maintenance and repair.

"Council will remain focussed on finding further efficiencies and reviewing the appropriateness of the level of services provided to the community."

He said this included a move to share software and business processes with Moyne and Corangamite councils, which would save time and money in finance, payroll and permits.

He said that while there had had been a number of efficiencies achieved over the past few years, it was his experience that "the answers to most challenges we face, lie within".

"It is the remit of management to harness the collective wisdom and knowledge of staff in order to resolve the day-to-day issues that confront us," he said.

"Following an organisational review, an analysis and assessment will be undertaken of the services we provide for council to consider, with a view to looking at how we can make the city more sustainable from a social, environmental and financial perspective.

"Everything we do is with the best interests of the community at heart."

Since 2015, the commission has allowed 11 councils to raise rates above the cap.

Warrnambool city councillors have mixed views on mayor Tony Herbert's call for a full organisational review, with most saying it is warranted, and others saying it is the job of chief executive officer Peter Schneider to conduct it.

At Monday's special council meeting to approve an application to the Essential Services Commission for a rate rise, Cr Herbert said he could not support it without a review of the council being conducted to find where efficiencies could be made.

Cr Peter Hulin said he "absolutely" supported a full review.

"I have been calling for a complete restructure of council for 10 years," he said.

"I believe there are serious issues that need to be addressed. I could never get four votes to make it happen. I would say a full forensic audit needs to be undertaken."

Cr Hulin said a review should be started "from the very top" and needed to be worked down through each department.

He said he had no doubt that Mr Schneider was more than capable on making the decisions that need to be made.

Cr Robert Anderson said it wasn't the councillor's job to call for an operational review.

"I think it is the chief executive officer Peter Schneider's job to do that," he said. "He has come in and he has to find his feet. That's what he is there to do. That's what we employ him to do. He reports back to us."

Cr Mike Neoh said it was "always good to review any organisation". "I guess it just depends on what it entails," he said.

"It's always good to take stock on what we are delivering, particularly the critical services.

"We often get funding to run programs and a lot of them are fully-funded. While younger people may not understand programs for the older people and vice versa, a lot is state and Commonwealth funded."

Cr Neoh said Cr Herbert had also made a good point at Monday's meeting about council offering services which were also offered privately. "That's a fair comment," he said.

"Generally council steps in where there is market failure. We always need to look at whether those services can be provided by private operators. When the ABC childcare centres went into liquidation that's where council provided the continuity. There are certainly services that the private sector won't provide such as libraries or swimming pools.

"There are some councillors that are expecting Peter Schnieder to be the Messiah, but the bottom line is that the buck stops with councillors because we actually approve the budget."

Cr Kylie Gaston said it was up to Mr Schneider to take on any new operational direction. "I am happy to listen to the input and observations of our new CEO," she said.

"He clearly is looking at us with fresh eyes and I will be interested to understand his observations. I have faith that he will look into our organisation and communicate with ourselves and staff any future directions."

Cr David Owen supports the review. "It is overdue if it hasn't been done for 14 years. In any business you have annual reviews, particularly we should have one in an organisation like the Warrnambool City Council where we are handling an $80 million budget. Who knows what you would find. It is our new CEO's job to look at cost savings. I'm sure he is doing that."

Cr Sue Cassidy said Mr Schneider was coming into the job "with a fresh set of eyes". "I'm sure he has his ideas on what he wants to implement," she said.

"With fresh eyes you see things differently. Our infrastructure has got so bad and there wasn't that money put aside to maintain it - we have 56 playgrounds that are nearly at the end of their lives and how do we fund it? How do we fund everything, that's the worry."

Almost 90 per cent of money Warrnambool City Council collects from rates and charges goes on staff costs.

The council's total budget is about $85 million and $38 million of that comes from from rates and charges.

In 2018/19, more than $33 million was spent on staff which $27.7m goes to wages and salaries while the rest is made up of superannuation, casuals, workcover and fringe benefit tax costs.

Of the staff budget, $1.779 million was spent on its 12 key management staff.

Employee costs were $1.7 million higher in 2018/19 than the previous year, driven up by its enterprise agreement.

Since 2004 staff numbers have increased by about 20 per cent from an equivalent full-time workforce of 318 to 391 in 2018.

Many of the extra staff came from a state or federal government push for them to deliver extra services and programs, the council said last year.

At the time, the council's director of corporate strategies Peter Utri said the council had already cut two per cent from a budgeted three per cent growth in its wages bill by not filling vacant positions.

Casual positions had been dropped and part-time hours reduced.

The rate bill for the average Warrnambool ratepayer has more than doubled over the past 14 years, jumping from $788 in 2003/4, to $1772 in 2017/18.

The council's reliance on revenue from rates has also risen.

In 2004, rate revenue made up 30 per cent of the budget but now it makes up about 45.6 per cent

Read more: Mayor calls for organisational review

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