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Legislative Council - Fifty-First Parliament, Third Session (51-3)
2009-10-28 Daily Xml
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BURNSIDE CITY COUNCIL

The Hon. DAVID WINDERLICH (19:57): I move:

That this council—

1. Notes that—

(a) Since being placed under investigation, numerous witnesses report that the Burnside city council has continued to breach provisions of the Local Government Act;

(b) The legal status of the Chief Executive Officer of the Burnside city council under section 97(2)(a) of the Local Government Act has been questioned by councillors and by local businessmen on the basis of legal advice;

(c) The extension of the final date of the investigator's report until February 2010 creates a situation whereby Burnside council is able to make major decisions about a wide range of matters, including the control of bushfire hazards; and

(d) There is scope under section 273(1)(a) and section 273(2)(b) of the Local Government Act for the Minister for State/Local Government Relations to give directions to council upon the receipt of a report by the investigator.

2. Hereby calls on the Minister for State/Local Government Relations to request a report from the investigator under section 273(1)(a) of the Local Government Act on whether there are any matters of concern that require consideration prior to the receipt of the final report.

3. Urges the minister to give such directions to the Burnside city council under section 273(2)(b) of the Local Government Act as are necessary on the receipt of such a report.

In essence, this motion poses the questions: is there a reason for serious concern about ongoing decision-making of the Burnside city council? In fact, is it capable of being a responsible decision-maker and local government for the people of Burnside? If so, what can be done?

The context, as members are aware, is that the council is under investigation for serious breaches and irregularities —and, in some cases, already well documented breaches—of the Local Government Act, and in other cases for serious but as yet unproven allegations. The Burnside council could even face being declared a defaulting council—in effect, being sacked. So, in that period when you would think it would be under probation and on its best behaviour, it is continuing to breach the Local Government Act and continuing to demonstrate irregularities in its decision-making, and that is of some concern.

Since the minister announced, on 22 July, that the Burnside council was under investigation, councillors and members of the public have continued to allege that there have been serious breaches of the Local Government Act and irregularities in decision-making. I will give just a small sample. They include issues such as the refusal of questions on notice. At the meeting of 15 September 2009, Councillor Rob Gilbert presented a number of questions on notice. They are:

1. Would the CEO please advise what, if any, evidence, from any person including elected members of staff, has been presented to Council, its lawyers or its insurers that Cr Jacobsen has acted dishonestly with regard to seeking Section 39 protection against legal claims being made against him?

2. If he has received evidence from any source, would he please provide that information to elected members at Tuesday's meeting?

3. If he has received evidence, would he please advise why he has not forwarded that evidence to elected members as a matter of priority already?

4. Given implicit in Council's decision, to deny the protection afforded to elected members under section 39, that is Councillor Jacobsen's statutory right, is the allegation that Cr Jacobsen has acted dishonestly, and as such Council and its elected members may be liable for a range of civil and criminal offences as a consequence of this allegation? What steps does the CEO propose to take to resolve the impasse, given he is refusing to discuss the issue with Council insurers and the Local Government Association's Mutual Liability Scheme?

5. Is it the intention of the CEO to continue to distribute all information, provided by Cr Jacobsen to Council's insurers in confidence to assist them with minimising their exposure, to the elected members or member of the public who are currently taking or threatening to take legal action against Cr Jacobsen?

6. Is the CEO concerned, given that he has already potentially compromised Cr Jacobsen's case by forwarding a detailed outline of Cr Jacobsen's case to the elected members taking action against him, that when Council is eventually co-joined to the action, it will cost this community even more than would otherwise be the case in both legal expenses and possible subsequent damages?

Four of those six questions were refused by the mayor, and the following email exchange then took place. The CEO sent an email advising that the mayor ruled questions one to four and six as being 'improper in the entirety of the circumstances as making unfounded assertions and the risk exposure for the Council'. Councillor Gilbert responded:

These questions are hardly improper, if Council has acquired a risk in relation to this matter it already exists. Questions may not always be palatable, but they need to be answered. I request that you reinstate my questions for tomorrow night's meeting.

And on it went. The questions themselves exposed the level of conflict and dysfunction at the council, but the key point is that questions were being denied. The ability to ask questions is fundamental to the governance of council. When large numbers of questions are denied, that creates serious concerns about whether debate and the flow of information is in fact being suppressed.

In the case of Councillor Jacobsen, he posed four motions in relation to the Chelsea Cinema, which would have had the effect of declaring previous motions passed by the council as invalid or null, because they had not had the proper required period of notice (five days) under the act. Those motions were left off the agenda. A motion by Councillor Jacobsen—and this also relates to the meeting of 15 September—to declare the position of the chief executive officer vacant was also refused. As I said, this is a small sample of the number of times questions or motions are refused.

A Burnside resident contacted me with concerns about the Council Review Committee. The Council Review Committee was formed, and it excluded councillors Jacobsen and Gilbert. Its first meeting on 14 September was called off because the proper period of notice had not been given. On the 22nd when it met, the three members of council who were not on the committee attended the council. They were ordered to leave, and when they refused the chief executive officer threatened to call the police to evict the councillors. So, following two occasions of the Burnside council's calling the police to evict residents, the threat was then made to have the police evict councillors. I would say the prospect of councillors calling police on to other councillors is, at least, irregular and, again, a sign of the conflict, and raises questions about the extent to which responsible decision-making can be going on.

Following that debate, the Burnside council then sought to clarify whether it could exclude other members of council from committee meetings of that review committee. It based it on an interpretation of section 96 of the Local Government Act. My layperson's reading of the act is that that is a dubious interpretation but, in any case, that interpretation was provided without the benefit of legal advice being provided to all members of council. That motion was then passed by virtue of the fact that it had the support of the dominant faction.

As I said, there are numerous examples but the general trend is: questions being refused; motions being refused; and deliberate attempts to exclude specific councillors. I think these go to the heart of some of the terms of reference for the investigation into the City of Burnside which refer to such things as dealing with conflict between elected members and between elected members and staff. Critically, the general term of reference that applies to many of these issues is whether the council's meeting practices, since the 2006 election, have fulfilled the council's obligation to act as a representative, informed and responsible decision-maker in the interests of the community.

To briefly sum up, to date: the council is under investigation. It is under investigation as the result of some serious unproved allegations and some serious, well documented breaches of the Local Government Act. At a time like this it is very important to have a good chief executive officer in place to ensure that good advice is provided to the elected members, and to ensure stability and good decision-making.

If we look at the role of the CEO under the act, it is clear how critical is the role this person plays. The chief executive officer must: ensure that the polices and lawful decisions of the council are implemented in a timely and efficient manner; undertake responsibility for the day-to-day operations and affairs of the council; provide advice and reports to the council on the exercise and performance of its powers and functions; coordinate proposals for consideration by the council; provide information to the council to assist the council to assess performance against its strategic management plans; ensure that the assets and resources of the council are properly managed; ensure that records required under this act or another act are properly kept and maintained; give effect to principles of human resource management; and exercise, perform or discharge other powers, functions or duties conferred on the chief executive officer by or under this or other acts and to perform other functions lawfully directed by the council.

Some of those powers, functions and duties confirmed under other acts include the ability to order the destruction of a dog; the ability to order the demolition of a house; the ability to order the sale of property to reclaim unpaid rates; the ability to order a landowner to address bushfire hazards on their property; the ability to carry out roadwork to allow water from a road to drain into an adjoining property if there is a risk of flood. There is a wide range of powers exercised by the position of the chief executive officer.

The question arises: what if that person's appointment was not legal, had not been carried out in accordance with the act and, therefore, what if that person and their decisions could be challenged? Given the importance of the role and the importance of some of the decisions made by such a person, that would seem to be a matter of some concern.

Earlier on in the year, in my earlier speech on Burnside, I read out legal advice in relation to the position of the chief executive officer at Burnside. Just to remind members: Neil Jacobs resigned on 11 September 2009. He then withdrew his resignation and was, effectively, reappointed as chief executive officer by the Burnside council. Under section 97(2) of the Local Government Act, a CEO's employment is terminated if the CEO, amongst other things, resigns by notice in writing to the principal member of the council. Once that happens, there is a four stage appointment procedure, which has the effect of the council appointing a person to be acting CEO until the vacancy is filled, inviting applications by advertisement, appointing a selection panel and then making the appointment.

As I outlined earlier in the year, that legal advice took the view that council should follow the legislative procedure for filling the vacancy created by that resignation. However, as I said, Neil Jacobs effectively went straight back into his position without there being an acting chief executive officer and without any of that process of appointment going on. That is the theory of the status of Chief Executive Officer Neil Jacobs, or the illegal chief executive officer, as many Burnside residents now call him.

Earlier this month, Mr Murray Willis, Director of Foothills Water Company, was in the media stating that he refused to recognise any decisions made by Neil Jacobs. A letter to the council from Mr Willis reads:

Your Worship,

Attached is a letter from our lawyers to your lawyers about the illegality of the man doing the CEO's job. I advise you that neither the Foothills Water Company, Mrs Willis or myself accept that the CEO is working at Burnside council in an official capacity. We say he is there illegally and, as a result, we three ratepayers will not accept any directions, legal notices or advice under the hand of the man doing the CEO's job (Mr Neil Jacobs) or any of his delegated officers. We have no confidence in your alleged CEO and say under the Act he has no right to be doing the work of the CEO.

I request that you hand both this email and its attachment from Mr J Danvers to each of your council members and discuss both of these documents in a full council meeting as a matter of urgency.

And on it goes. So, the theory has already become reality in that a local businessman will challenge decisions made by Mr Neil Jacobs. As I said before, if you look at some of the roles performed by Mr Jacobs and the powers he exercises, that seems to be a matter of concern.

So, to recap the situation, the council is under investigation but, despite that, it is continuing to make decisions which a number of different quarters are alleging are breaches of the Local Government Act and which, according to my reading at least, are highly questionable, and the council continues to demonstrate a level of conflict and dysfunction that raises questions about its ability to provide good governance. Should that be allowed to continue, and would you expect in a responsible minister to act to address that if she could? Well, in fact, it has been allowed to continue by the extension until February 2010 of the investigation by Mr Ken MacPherson.

The extension is quite reasonable; it is a complicated matter. All the information I have is that the investigation has been extremely thorough, and that is all to the good. However, it does mean that, in the meantime, the council could effectively sign contracts, build a new hall, employ or dismiss staff, destroy a dog—all those other functions and powers I listed earlier. It could make very significant decisions.

As the Minister for State/Local Government Relations has said, there are not clear caretaker provisions in the Local Government Act. She has pointed out that I voted against caretaker provisions in the Local Government Elections Act, and that is true. That was, I guess, a lineball decision. In the end, I decided to vote against it, and I make no apology for that. I think the matter of a council that is operating normally and about to face the voters is quite different from a council that is under a serious cloud and under investigation. So, I believe that that does raise some sort of need for the exercise of caretaker-style powers.

These are not clear in the act at the moment, but the minister is not powerless by any means. If we look at the action the minister can take on receiving a report from the investigator, we see that section 273 of the Local Government Act provides:

(1) The minister may, on the basis of—

(a) a report of an investigator or investigators under this division...

take a range of actions.

I have not read it all, but that is part of subsection (1). The section goes on to provide:

(2) The action that the minister may take is any of the following:

(a) the minister may make recommendations to a council;

(b) if the minister considers—

(i) that a council has contravened or failed to comply with a provision of this or another act; or

(ii) that a council has failed to discharge a responsibility under this or another act; or

(iii) that an irregularity has occurred in the conduct of the affairs of a council (in relation to matters arising under this or another act)

the minister may give directions to the council to rectify the matter, or to prevent a recurrence of the act, failure or irregularity.

So there are no limitations on the directions that the minister give to the council; it just says that the minister may give directions to the council to rectify the matter or to prevent a recurrence of the act, failure or irregularity.

There is certainly a very strong question as to whether the Burnside council is consistently breaching regulations of the act that relate to the provision of information and the accepting of motions and questions. Those appear to be regular matters of concern. There are also matters of concern regarding whether it is going into confidence too many times, and there are provisions under the Local Government Act regarding the Ombudsman acting on that. Section 94(1) of the act provides:

The Ombudsman may, on receipt of a complaint, carry out an investigation under this section if it appears to the Ombudsman that a council may have unreasonably excluded members of the public from its meetings under Part 3 or unreasonably prevented access to documents under Part 4.

I think there are quite compelling questions that require answers regarding the regulations associated with those sorts of decisions by the council. I would have thought that the very act of refusing to fill the position of CEO—if it is determined that that is what has happened—raises a whole series of breaches of the Local Government Act—probably half a dozen. The council is required to have a chief executive officer, the council is required to appoint someone to act in the chief executive officer's place if the chief executive officer is unable to act, the council is required to follow a certain process if the chief executive officer resigns. These are all under sections 96, 97 and 98. There are at least half a dozen provisions in that act that the council would be breaching if, indeed, it were concluded that the chief executive officer had not been appointed in accordance with the act; that is, in fact, he should have been in an acting position and, at the conclusion of the acting position, the new chief executive officer should have been appointed.

So the minister appears to have broad powers to give directions if she receives a report from the investigator. Now, the essence of this motion is simply that the minister does just that: that she requests an interim report from the investigator, and that interim report would give information about particular issues of concern. It may say that there is no concern, but that would be up to the investigator. Once the minister had that report, if she did have concerns she could act and give directions to council. She could give specific directions around the handling of meeting procedures; she could direct the council to appoint a chief executive officer in accordance with the act. I do not see how this would in any way compromise the remainder of the investigation.

Although an investigation is under way, it seems to me that the central issue is that, if there are serious concerns about the sorts of decisions being made, the minister has a couple of options. She could ignore those and wait until February 2010, by which time all sorts of other breaches of the act may have occurred and all sorts of flawed decisions may have been made, or she can seek to act. I have suggested to the minister that she get legal advice—I do not pretend to be qualified to make any sort of legal assessment of this—to clarify whether under section 273 she can ask for a report and, on the basis of that report, give broad directions. My reading of the act is that she can.

The minister has very forcefully said that that this is somehow a manipulation of the investigation process, that it somehow interferes with the integrity of the process. As I said, I do not see how it need do so. In essence, I am suggesting that the minister write to the investigator and outline the information she has been given that is causing her concern about Burnside city council. She would ask the investigator whether he shared those concerns and whether he thought action was warranted. If he did share those concerns, and if he did think action was warranted, that in itself would give the minister the power to take such action.

The investigator might say that he thought there was no need for a report, or he might provide an interim report that stated that, essentially, there was nothing that could not wait until February 2010. So be it: at least the minister would have taken the minimum steps necessary to make sure that she is looking after the welfare of the people of Burnside—and not just the people of Burnside.

As I outlined before, there are council powers over roads and properties in relation to bushfires. We are coming into bushfire season and, if some bushfire hazard has not been removed, or some action that council has ordered was not being responded to because of this controversy, I believe that there is a broader duty of care to the South Australian public and that the minister has to ensure that the council is carrying out its obligations under the act.

That is essentially my argument: there are reasons for concern; the council has important powers; the responsible exercise of those powers is of interest to all South Australians; and I believe the minister has a duty at least to make some further investigation into whether she needs to take short-term action before February 2010 to ensure that the council is capable, in a responsible way, of exercising some of those important powers. I commend the motion to the council, and I look forward to other members' contributions.

Debate adjourned on motion of Hon. R.P. Wortley.

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