On the 20^th March CoPP meeting, Councillor Clark introduced a motion requesting that the CEO in preparing the 2024/2025 budget seek spending reductions by 1.6% (savings of $3.6 million) with the aim of no increase in rates for that year. The motion was sadly defeated.

In short, the economic case is clear:

Considering the economic backdrop we face; Councillors need to look beyond ideology. Many residents of our community who own property have large mortgages; many cannot afford a rate increase. Landlords are also facing higher charges and taxes including steep land tax increases.

As one disgruntled ratepayer wrote recently:

This attitude tends to be supported within the City of Port Phillip where a recent survey found a large dissatisfaction rating with our Council.

Clearly with families doing it tough, the justification for a rate increase currently is unjustifiable, but let’s look at the Council financials over the period 2016-2023.

A review of Council finances from the period 2016 to 2023 demonstrates a very strong and improved balance sheet. This improved position also supports the case for not only a rate freeze but a deeper look into potential savings that Council could make.

Using the year 2016 as a base line of 1 and compounding the annual movement in aggregates the following was ascertained.

 

The key takeaway from the analysis suggests the following:

While a large portion of the $149 million in financial assets has been committed, this has been on the back of large annual council budget surpluses totalling $127.5 million over the same period 2016-2023. That is, rate payers have been the largest contributor to that annual budget surplus. While we should all support council surpluses and a strong balance sheet, the question remains when is ‘enough, enough’ in consideration of today’s economic climate?

In summary, no matter how you wish to present, dice, or interpret the financial statistics over the period, revenue has well outstripped Council expenses and large surpluses have been the norm.  In fact, the 2024 budget surplus is currently projected at $4.4 million.

Councillors should always be seeking ways to reduce costs and take on some of the tough decisions on what services to prioritise. Similarly, there needs to be more than a passing interest in cost management. In the private sector, a full review of expenses line by line and a razor mentality is generally the norm year in year out.

At the Council Meeting in March, some of our Councillors spent their time justifying council spending levels and the need for higher property rates. It could be argued there was a lack of curiosity on council expenses with a simple quick fix band aid solution of more rates and more spending - tax and spend unfortunately within an ideological framework that extends beyond basic council remit.

Sadly, for some Councillors, the ideological framework remains core. It allows them to stretch the boundaries of what councils are meant to be about and demonstrate to their “political masters” that they are ready for preselection at State or Federal level: - like peacocks displaying their feathers.

Ironically some of the Councillors who voted for rate increases do not personally pay rates in the CoPP. Do they believe as representatives of Council they can spend hard earned rate payer money better than we the rate payers can! And with no skin in the game, it is easy to put a hand up for higher rate increases.

I wonder whether some Councillors understand that these rate increases one way, or another also put upward pressure on rents. Increasing rates affect property owner and renters alike: One Councillor at the meeting doubted the nexus, which I find extraordinary.

In the 2023 Annual report, staff costs increased by 7.7% and staff numbers went from 918 to 975 a growth rate of 6%.  At a time of financial difficulties, Council should be reigning in staff numbers, implementing natural attrition as a means of reducing staff, and doing more with less. Sadly, we see the opposite occurring. A survey by Council Watch found that the City of Port Phillip had a staff ratio to 1,000 of population of 8.16 [third highest in Metro Melbourne] – Average 6.01 staff per 1,000. The City of Port Phillip came in an alarmingly second place in terms of average salary costs at [$129,174].

Heritage and art are valued at $23 million in the financials. Why is the Council continuing to purchase art when most of the existing portfolio is not and cannot be displayed. There maybe even an argument to sell down this portfolio.

Consultancies went up 17% to $8.9 million from $7.6 million. Consultancy costs have been a concern for some time both from excessive use and who gets to do the work. All consultancy contracts over the last three years should be sent to the Audit and Risk Committee for a full evaluation – both in necessity for the work and what outcomes if any were delivered of a tangible nature. As well, future consultancies planned should be revisited for relevance to the basic council remit of roads, rates and rubbish.

A village in Timor Leste is outside Council remit for funding. Over the last decade it is estimated that more than a $1 million dollars of our rates has been spent on this project. It should cease immediately.

The real issue is of course is much wider than the disregard of ratepayer interests in this annual ongoing grab for higher property rates. The never addressed issue is the urgent need for Council reform through a detailed change management process, transforming the CoPP to a “fit for purpose” organisation that is true to its basic remit. Unfortunately, as Council politics stands now, ideology tends to triumph over the sensible centre where most of us sit.  

The CEO of Port Phillip has in a short time in the role demonstrated that he is up to the task, and generally the feedback on him has been very positive. The missing link however is a concerted/ united effort by all Councillors to give strong direction on a cost review and get on with the job of unpacking the 2024 budget and implement some real savings.

This means removing duplication of services that is provided at the State or Federal level along with better delivery mechanisms through welfare agencies. We also need the aim of a longer-term trajectory of moving the CoPP budget roughly in line with more modest neighbouring council budget ratios as reported by the organisation Council Watch.

Councillor Clark and the two supporting Councillors (Sirakoff and Pearl) should be praised for their stand in opposing rate increases for the 2024/2025 year. It demonstrates that these Councillors are in touch with community sentiment, at a time of hardship and financial difficulties within our community. While I am not a member of the RoPP or any political party, I believe they deserve our full support.

 

Rod Mitchell