The dismissal of the
Port Macquarie-Hastings Council
Port Macquarie-Hastings Council is a local government area in the Mid North Coast region of New South Wales, Australia.
The area is located adjacent to the Hastings River, the Pacific Highway, the Oxley Highway and the North Coast railway lin ...
on 27 February 2008 marked the end of a series of events involving a project which was initiated in 2001 in the
New South Wales
)
, nickname =
, image_map = New South Wales in Australia.svg
, map_caption = Location of New South Wales in AustraliaCoordinates:
, subdivision_type = Country
, subdivision_name = Australia
, established_title = Before federation
, es ...
coastal town of
Port Macquarie
Port Macquarie is a coastal town in the local government area of Port Macquarie-Hastings. It is located on the Mid North Coast of New South Wales, Australia, about north of Sydney, and south of Brisbane. The town is located on the Tasman Sea co ...
to build a cultural and entertainment centre, known to locals as the Glasshouse.
The project, initially a joint venture with the management of the neighbouring shopping centre, Port Central, was originally expected to cost the Council A$7.3 million. However, by late 2007, despite the centre not yet having opened, the costs had blown out to over A$41.7 million, with interest repayments likely to extend the council's liability to A$66 million.
On 27 July 2007, a full public inquiry was announced by the
Minister for Local Government,
Paul Lynch. The inquiry reported its findings in February 2008. It found that the council had failed to provide appropriate financial and project management and had lost control of the costs, that the project costs had harmed the council's ability to provide services and amenities to the community, and that the council's communications management strategy had resulted in inadequate consultation with the public and inappropriate regard to their concerns. The Minister for Local Government dismissed the council and its mayor, Rob Drew, and appointed an administrator upon receiving the inquiry's report. Drew was critical of the process throughout, maintaining that errors had been made and misinformation had been accepted as fact; however, the New South Wales Urban Task Force, a property development lobby group, believed the sacking served as a warning to other councils to stick to "core responsibilities".
[
The events continued to impact upon the community and the individuals involved. At a federal by-election for the normally safe National Party seat of ]Lyne
Lyne may refer to:
Places
* Division of Lyne, an electoral division in New South Wales, Australia
* Lyne, Denmark, a town in southwest Denmark
* Lyne, Surrey a village in southern England
* River Lyne, a river of Cumbria in England
* Lyne, Sco ...
in which Port Macquarie is located, the former mayor, who was the endorsed National candidate, failed to win against Rob Oakeshott
Robert James Murray Oakeshott (born 14 December 1969) is a retired Australian politician. He was the independent Member of the House of Representatives for the Division of Lyne in New South Wales from 2008, when he won the 2008 Lyne by-electi ...
, an independent
Independent or Independents may refer to:
Arts, entertainment, and media Artist groups
* Independents (artist group), a group of modernist painters based in the New Hope, Pennsylvania, area of the United States during the early 1930s
* Independ ...
politician, and a former state member of parliament who had been openly critical of the council throughout the drama. During the period under administration, voluntary redundancies were offered to 27 staff in order to improve the council's financial position.
In 2012, the community elected a representative council and mayor, replacing the administrator appointed in 2008.
Background
On 30 March 1999, the Council met to initiate planning for a centre to house the visual and performing arts at the former Civic Centre site in the Port Macquarie central business district
A central business district (CBD) is the commercial and business centre of a city. It contains commercial space and offices, and in larger cities will often be described as a financial district. Geographically, it often coincides with the "city ...
. It recommended a project plan be developed by 2001. On 21 August 2000 a Cultural Facilities Taskforce was created. In December 2000, the Council approached the management of the neighbouring shopping centre, Port Central, about a possible joint venture on the site, and the Council endorsed further negotiations on 28 May 2001. The joint venture was expected to cost around A$13.5 million, with the Council contributing A$7.3 million.[Inquiry report, chapter 3.] The joint venture collapsed in August 2002 because the council was not prepared to accommodate the needs of their commercial partner to make the project viable, and decided to go it alone. The new centre became an icon building under the direction of the council's General Manager, managed by a Project Control group including the Mayor and Deputy Mayor. The costs blew out considerably by 28 June 2004, when the Council unanimously backed the project, outlays had already reached A$15–A$20 million, and by late 2007 they had reached A$41.7 million. This was due to a range of factors including, that the Council bought and demolished neighbouring shops to make the facility big enough to include meeting rooms and conference facilities, and a drain built by convicts
A convict is "a person found guilty of a crime and sentenced by a court" or "a person serving a sentence in prison". Convicts are often also known as "prisoners" or "inmates" or by the slang term "con", while a common label for former convict ...
in the 19th century, and still in remarkably good condition, was discovered by archaeologists and needed to be preserved.
The Payne report
In October 2006, the NSW Department of Local Government announced it would investigate the council's financial management and would try to determine whether it properly considered the impact the added costs could have on its other functions. The investigation, which commenced on 6 November 2006, was conducted under Section 430 of the , which allows the Director-General of the Department to investigate any aspect of a Council or of its work or activities. The report, delivered in May 2007 to the Minister of Local Government, concluded that the Council did not exercise due diligence and that there had been a failure to scope the project, and recommended to the Minister that a Section 740 public inquiry, which would be independent and have some of the powers and protections of a Royal Commission, be held. A Section 740 inquiry is a necessary step before a Council can be dismissed.
On 21 May 2007, Councillor
A councillor is an elected representative for a local government council in some countries.
Canada
Due to the control that the provinces have over their municipal governments, terms that councillors serve vary from province to province. Unl ...
s Lisa Intemann and Jamie Harrison, who believed the council had exceeded its mandate and failed to consult with the community, led a public rally in Port Macquarie
Port Macquarie is a coastal town in the local government area of Port Macquarie-Hastings. It is located on the Mid North Coast of New South Wales, Australia, about north of Sydney, and south of Brisbane. The town is located on the Tasman Sea co ...
. The Mayor, Rob Drew, believed the centre development should be an exciting time for Port Macquarie and was critical of opposition to the project, characterising it as "slanderous accusations" and "fomenting discontent". He acknowledged the report raised concerns about the processes behind the project, but insisted the project itself was sound, saying in a press release, "I for one make no apologies that this is a multi-purpose facility which will provide for performers, community groups, which will provide for conferences, seminars and meetings, which will provide for activities never seen before in Port Macquarie." Harrison meanwhile told ABC News
ABC News is the news division of the American broadcast network ABC. Its flagship program is the daily evening newscast ''ABC World News Tonight, ABC World News Tonight with David Muir''; other programs include Breakfast television, morning ...
, "The report has said categorically that heCouncil has lied to the community about the cost of the arts centre at every opportunity it's had and it's put a gloss or a spin on it".
By June, the mayor was looking for political support to avert a full public inquiry. The National Party, whose members were dominant on the council,[ and MLC ]Melinda Pavey
Melinda Jane Pavey (; born 1969), an Australian politician, is the Government of New South Wales, New South Wales Minister for Planning and Public Spaces#Water, Property and Housing, Minister for Water, Property and Housing since April 2019 in t ...
had been particularly critical of the actions of the Department of Local Government in the General Purpose Standing Committee. Local independent MP, Rob Oakeshott said, however, that the council should instead address the findings of the report, and stop arguing about the facts or using emotional arguments in support of it. He also cautioned against getting politicians involved, stressing that this was a formal legal process.[
]
The Willan inquiry
On 27 July 2007, the Minister for Local Government announced a Section 740 inquiry into Port Macquarie-Hastings Council and the Glasshouse project, with particular regard to aspects of financial and project management, the project's impact on the council to provide services and amenities to the community, and the openness and transparency of decisions made by the council. He appointed Frank Willan, a former administrator of Glen Innes Severn Council in 2004, as Commissioner. The mayor expressed disappointment, asserted the methodology of the earlier Section 430 investigation was faulty, and believed the council's management and decision-making processes would be vindicated.
After 18 days of public hearings and a total of 765 submissions, Willan released the inquiry report in February 2008. The report contained a number of critical findings. The key finding was that the Council and its Councillors had not been rigorous in seeking accurate information about the project, had been swayed by developers and supporters and had failed to plan and manage the project and had lost control of the "uncontrollably escalating" cost. The result was an adverse impact upon works and services in other areas of the council's operation. The Glasshouse, in the commissioner's view, would not have been able to generate the projected income once it opened. It further found that the community had been "consistently misled", that the council had improperly used its support group to campaign against critics and its "communication strategies have driven its processes". The council had therefore failed to meet its charter. Willan recommended to the Minister that all civic offices be declared vacant, an administrator be appointed, and that changes to the way Councils dealt with their own proposals be enacted.
Sacking and aftermath
Upon the report's release, the Local Government Minister, Paul Lynch, concluded on 27 February 2008 that it gave him no choice but to dismiss the Council and appoint Dick Persson
Richard Mark Persson (born 1950) is a former senior New South Wales and Queensland public servant and local government administrator.
Early career
Richard Mark Persson was originally from Randwick, New South Wales, where he graduated from the U ...
, who had administered Warringah Council
Warringah Council was a local government area in the northern beaches region of Sydney, in the state of New South Wales, Australia. It was proclaimed on 7 March 1906 as the Warringah Shire Council, and became "Warringah Council" in 1993. In 1992 ...
in 2003, to serve as administrator. He said of the development, "What seems to have happened is that a reasonable community facility has been treated by the Council as an icon which must be built come hell or high water, regardless of the cost to ratepayers." He emphasised that in his view, incompetence rather than corruption was the reason for the cost blowout, which would reach A$66 million once interest repayments were accounted for. The outgoing Mayor, Rob Drew, criticised the dismissal, calling it "atrocious".
The New South Wales Urban Task Force, a property development lobby group, believed the sacking served as a warning to other Councils to stick to "core responsibilities", and in late March, the administrator adopted stricter financial measures listed in an independent review of the project.
In September and October 2008, by-elections in the Port Macquarie area at both federal and state level gave a new forum to some of the players in the controversy. When the member for the federal seat of Lyne
Lyne may refer to:
Places
* Division of Lyne, an electoral division in New South Wales, Australia
* Lyne, Denmark, a town in southwest Denmark
* Lyne, Surrey a village in southern England
* River Lyne, a river of Cumbria in England
* Lyne, Sco ...
, Mark Vaile
Mark Anthony James Vaile (born 18 April 1956) is a former deputy prime minister of Australia and former leader of the National Party of Australia. Vaile is currently a non-executive director of a number of public listed corporations.
Early li ...
, retired from politics on 30 July 2008, Oakeshott and Drew, the latter standing as the endorsed National Party candidate, emerged as the major candidates in the resulting by-election on 6 September. With the Glasshouse as a major issue, Oakeshott won 63.80% of the primary vote to Drew's 22.88%, with a further 10.07% coming to Oakeshott via preferences. In Oakeshott's old state seat of Port Macquarie
Port Macquarie is a coastal town in the local government area of Port Macquarie-Hastings. It is located on the Mid North Coast of New South Wales, Australia, about north of Sydney, and south of Brisbane. The town is located on the Tasman Sea co ...
, former Councillors Jamie Harrison and Lisa Intemann ran as independents, between them attracting 15.8% of the vote, whilst former Oakeshott staffer Peter Besseling went on to win the election against the endorsed National candidate.
On 17 December 2008, the council announced that some staff would be offered voluntary redundancies as part of a strategy to address the $7.1 million deficit it faced for the 2008–2009 financial year without increasing Council rates. The following day, it set a deadline of 19 January 2009 and clarified that 27 positions were being made redundant, while 29 vacancies would not be filled. The redundancies proceeded as planned, although forced redundancies down the track were not ruled out.
On 20 January 2009, administrator Dick Persson announced his decision to step down at the end of the month, largely due to the demands of being away from his Sydney home for several days a week. He described the Glasshouse project as a "wrong decision" by the council, attributing it to "woolly thinking with the best of intentions from people not experienced with planning and delivering major capital works." He was replaced in the role by Garry Payne, head of the Department of Local Government.[
On 8 September 2012, the community elected a mayor and councillors, to form a new Port Macquarie-Hastings Council. Former State member for Port Macquarie, Peter Besseling, was elected mayor and Lisa Intemann, the only member of the dismissed council to contest the 2012 election, was re-elected as councillor.]
References
{{good article
Local government in New South Wales
Public inquiries in Australia