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August 2005

Ratepayers want Accountability

 

A lengthy report was tabled in Parliament  last week following a year's investigation by the Auditor General  of the attempt by the East Gippsland Shire to sell their former headquarters on 14.9 hectares with magnificent views over Lakes Entrance and Bass Strait.

The Association of Ratepayers & Residents of East Gippsland (ARREG) who had taken successful Supreme Court action to block the fire sale of $1.5m  now want for further action to regain costs incurred in the prolonged action.

Strong feeling was expressed at a large meeting of ratepayers at Lakes Entrance this week. With council elections in November there is  a sense of much unfinished business.

ARREG wants persons responsible for ongoing breaches of process to be held accountable for their actions. The Council paid out $912,000 in legal fees and settlement costs as well as employing extra staff during the action, beyond this the Auditor General's costs to investigate the matter cost taxpayers $140,000.

The Auditor General's Report describes the  failure of senior staff and particularly the CEO to provide Council with timely advice; there was non compliance with local government requirements for current valuations for property sale and inappropriate communications during the tender process.
The Contract of Sale was apparently signed prior to public submission hearings and this document was withheld despite Freedom of Information attempts and Supreme Court Discovery request.

The public were informed that the property was valued at $750,000 although the Council's own real estate agent had valued the propertty $6.9 million.

Probity checks on prefered purchaser Lakes Village and its syndicate were not carried out
"OzCapital Pty Ltd was a company registered on March 2000 with a share capital of 100 $1 shares fully paid up and owned by a single shareholder;

Interstar Securities Holdings Pty Ltd was registered as a company with ASIC in April 1999 with a share capital of 5 $1 shares fully paid up and held by a single shareholder."

Council was not informed of the bankruptcy of Dr Bennett and of his being being found guilty of breaches of Corporations Law. The Auditor General notes "On the very day that he had been declared bankrupt, Dr Bennett wrote to the council on behalf of a new entity Lakes Entrance Likestyle  Corporation and made a new offer to purchase the property for $2.5 million."

 
From the Auditor General: "In summary the chief executive failed to act on his own advice to undertake a check on Dr Bennett's financial standing and the council failed to ensure that such checks were undertaken . Whilst initially rejecting Dr Bennett's offer, the council continued negotiating with him over many months."

East Gippsland ratepayers  are incensed that there appears to have been a softening down of recommendations by the Auditor General despite clear and continuing breaches described throughout the Report .

A property developer and  past mayor Tom Courtney who features in the Auditor General's Report and who had on a number of occasions berated ratepayers using such termas as "inbred", "demented" and "loonies,"  has further incensed locals when he was interviewed on ABC radio on Friday and slammed the Auditor General as "incompetent" as well as further denigrating ratepayers in the legal action.

The ratepayers association meeting moved

* To request the East Gippsland Council to seek independent legal advice with a view to recovering moneys expended on on costs associated with the Supreme Court action regarding Palmers Road from those parties involved in the seriously flawed tender process.

* To request the Fraud Squad to investigate matters surrounding the activities of Dr Ian Bennett who was involved in the attempted sale of the Council property at Lakes Entrance. This follows the referral of associated matters to ASIC by the Auditor General.

ARREG has requested that the shire make available extra copies of the Auditor General's Report to the shire business centres and libraries across East  Gippsland  so that the account could be accessible to ratepayers .

President of ARREG,  Robert Nettleton said  "The present Council which includes 5 elected from the ratepayers association has put out a press release which appears to be trying to dampen down further action but by the mood of the ratepayers the issue is not going to go away.
 
"Ratepayers of East Gippsland have not only lost close to $1,000,000. We were abused and derided while we knew that proper processes were being blatantly flouted. There has to be accountability in Local Government and those most responsible must be answerable in law.
What went on was a disgrace and now  it's told in the Auditor General's Report but if there is no follow up action the message is that you can get away with anything.
Now some councillors who were elected from ARREG seem to have got too comfortable. We expect them to follow through this matter to the end."
 
Ratepayers Victoria, President Jack Davis JP said " Ratepayers are disappointed that the Auditor General did not recommend processes to be mandated to ensure greater transparency across all activities in  Local Governrnent .
 
 Councils across the State carry out most of their deliberations in closed informal sessions , FOI can be thwarted as it was in East Gippsland and the Ombudsman appears limited to intervene in Local Government. Confidential  'in camera' sessions are held too frequently and beyond the intent of the Act. Of special concern is the now common practice of moving resolutions 'in camera'  so decisions can be hidden indefinitely.
 
There is a need for a special Commissioner of Local Government, accessible to the public and with real powers independent of political influence, " said Mr Davis. " The present systems are inadequate and what happened in East Gippsland is just an example of what happens when there is the wrong mix of predatory intent, incompetence and contempt for proper process.
 
To say as did Bob Cameron when Local Government Minister, and as did last week the President of the MAV, that ratepayers have control because they can vote out councillors at election time, is quite irresponsible. A lot of damage can be done in a four year term of council. "
 
Jack Davis Mobile 0412 238 974
Linette Treasure 5155 9498
 
(AG REPORT AVAILABLE www.audit.vic.gov.au. )
 

 

Additional Info
From Ratepayers Meeting Lakes Entrance 25/7/05
 

 

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