Kangaroo Island, 2014.07.11
Fourth interview of Kangaroo Island councillor Graham Walkom
by Dr Gabriel Bittar
Kangaroo Island Council not functioning properly
– Following your last interview where you presented Kangaroo Island Council [KIC] dire financial situation, pinpointing a number of accounting problems, I would like to ask you what other key problems are significantly affecting the performance of this council.
– I would say these are three : extremely high staff turnover, no effective direction strategy, and failing to act on financial direction given from council.
– Just on the face of it, every one of these three problems are potentially explosive. I’ll ask you please to detail each one. Let us stay to your order. When it comes to employment, council is indeed regarded as a revolving door, and the problem seems to particularly affect the senior management. Could you elaborate?
– It is dreadful. Staff turnover is extremely high in our council but it is something that is not objectively reported on to the elected members; staff confidentiality appears to be misused, as an excuse to not keep councillors informed.
Let me paint the broad picture. Typically government turnover in Australia is very low. Local government employees are well paid, so there should be much incentive for them to stay and retain their local government job, particularly on an “Island paradise” like ours; also their positions are secure compared to private companies who can close their doors and put off the entire workforce overnight.
Council has 62 equivalent full-time [EFT] positions (note two 50% part-time employees equates to one EFT). I have been provided with a summary of employee turnover in our council over the last three years and it totals 33 people if you count the employee currently being sacked for allegedly lodging a complaint or two against the CEO. Keep in mind you can’t entirely compare “people” (who do not necessarily work full-time) with EFTs, but these two numbers tell you obviously something’s wrong. Over the last three years our senior management turnover (all are full-time positions) is on average in excess of 66% per year; and overall staff turnover is around 50% for the three years, for various reasons but ‘forced to resign’ features very highly.
– There are different levels of staff turn-over acceptable or advisable depending on the business. I am pretty sure no administration, private or public, can operate effectively with nearly a fifth of employees quitting or being dismissed each year.
– I knew it was high but had no idea it was that high until a document landed in my lap. With the many and varied payout and confidentiality ‘bonuses’ that go with that and ‘redundancy’ packages we understand why council needs a $1.5 million administrative loan earlier this year to stay afloat. This is an obscene result for an organisation that promotes itself as ‘an employer of choice’.
– There are the immediate financial costs of such an abnormal turnover, but it also must have a destructive impact in terms of morale, overall efficency and effectiveness.
– Sure. High employee turnover is one of the largest costs for any organisation and particularly so for recruiting to an island like ours – removals, fares and additional time all have to be paid for. Productivity is reduced, as that employee’s workload is not being carried out or is allocated to someone else and then those assisting cannot do their own job effectively. Time is lost as managers need to concentrate on replacing the employee with the penalty that if recruitment is not done correctly the new employee will not settle and will move on and we push replay. For every employee that leaves, even if they leave because they are not suited, they take with them significant knowlege of the business that those remaining and the new employees are unlikely to know.
– What do you reckon as the primary cause for this aberrant state of very high staff replacement rate at council ?
– To me the primary fault is council’s, itself. It has refused to develop and adopt a strategic plan that is appropriate for our situation of a small struggling council. It does not have any recognisable published directions and workable objectives for the organisation. There are other significant factors like working with KIFA [Kangaroo Island Futures Authority] who similarly seems not to know where it is going. With the recent departure of our general manager of finance, we seem to have been left with no people experienced in local government management.
When this council was elected in November 2010 it inherited a newly developed Strategic Plan that had its genesis from a large community circus called ‘Futures Search’. All participants were told to come up with ideas for council to implement and those ideas were not to be limited by financial considerations. The former council in its wisdom called about 80% of these ideas its 2010 to 2014 Strategic Plan and that has essentially been what our administration have had to work from for the life of the current council: some 412 ‘Key Performance Indicators’ [KPIs] with negligible funds to carry them out. A hopeless and totally unachievable plan.
– If I recall correctly you were very critical of this plan before you were elected to council?
– Indeed I was. I know what I am talking about, because I participated in this circus, though as a critical voice !
I put a lengthy submission for the draft Strategic Plan, to the then council as part of their community consultation process. Some of the criticisms were:
no clear direction is identified;
the plan is predominantly cash burn not cash earn;
the KPIs avoid any link to financial efficiencies;
and I warned that “One could be forgiven for forming the opinion that KIC will be in the same position in four years as it is now.”
But they were not going to take any notice because it would have meant admitting the Futures Search nonsense was indeed a nonsense.
Having been elected to council I have been a persistent and consistent critic of this “plan” as our erratic attempts to follow it and patronise KIFA have contributed significantly to our current financial situation.
The situation now is far worse than it was almost four years ago, when the newly elected council took the reigns. But, undaunted, it is about to repeat what the previous council did – finalise a new four year plan and hand it to a new council to implement.
– What advice on strategic direction would you give to the next council after your experience with this one ?
– Take this current council’s new Strategic Plan with a pinch of salt. Consider it as only a possible or draft plan. Genuinely review it and decide where you need to go, not where you would like to go. I take only partial comfort, after years of disagreement with fellow councillors and the CEO about our plan being without direction and unworkable, from reading in the tender documents provided to prospective consultants, that the current Strategic Plan is a “(…) thoroughly horrible document (…)”. [sic]
Compounding these problems has been our disorganised resource-hungry patronising of the directionless nonsense that is KIFA [the Kangaroo Island Futures Authority]: many of its stated objectives are not council’s, but this council nevertheless pours many resources into supporting wherever its government-appointed members decide to go. That is not good for any council and particularly bad for one such as ours that is broke.
Our main strategy must clearly address the financial situation. And this needs to be addressed urgently ! And if council decides this cannot be done with serious cuts to non-essential services, then it will inevitably raise rates even more than they have been, very significantly more, to cover its deficit and maintain its assets.
– Well it seems you have raised these points quite a few times. Why do you think the majority in council ( excepting councillor Liu, who’s quite aware of these problems) is not convinced of the need to address them ? It really looks like democracy at it worst: the leading pack, being the council majority, leading all island ratepayers over the cliff.
– That’s a dangerous aspect of the problem… But there’s another dangerous aspect : the administration not carrying out the directions council has determined, preferring to chase rainbows, such as commercial passenger jets coming to KI, the unnecessary duplication of the undersea power cable to the island, spending big on consultant studies to generate wind power and develop bio-fuels on the island… spending hundreds of thousands of dollars in these pursuits rather than doing what council has directed.
As I emphasised in an earlier interview, all councillors have a clear obligation to review our financial situation and direction. Once council has issued a direction to the CEO, he is legally bound to carry those instructions out – ref section 99 of the Local Government Act “to implement the lawful decisions and polices of the council in a timely and efficient manner”. I do not consider that the CEO has the option to be selective about which resolutions of council are implemented in a timely and efficient manner.
Yet a casual observer would be forgiven for thinking that the CEO is being selective or that he is unable or unwilling to comply with council’s directions.
For example, council has acknowledged and continues to promote that “The most critical issue is the long-term financial sustainability of this council.” To reinforce this priority council accepted, by resolution, advice from the audit committee on 14 Dec 2011 at Item 9.1.4 “That the audit committee wish to highlight the significance of the operating deficit and urge council in its budget process for 2012/13 and subsequent years to work towards improving its financial performance in the future.”
– We’re close to three years later. Has this instruction been implemented ?
– No, it hasn’t. In that year 2011/12 when the audit committee restated the “elephant in the room” needed to be attended to by way of this resolution, our deficit ended up at $3.4 million (adjusted, as explained in the previous interview, with the $1 million depreciation removal); the following year 2012/13 it was no better at $3.5 million, and then in 2013/14 the deficit blew out to $4.6 million. So council is trending heavily in the opposite direction to that required.
– So is council at least trying to tackle its huge deficit ?…
– Not that I am aware of. They appear much more interested in making things worse by giving away hard cash by way of community grants so that council gained popularity.
– You mentioned that the administration seems not to have carried out a number of council instructions. What were the others of importance ?
– Also at it’s December 2011 meeting, council resolved “That the CEO provides a broad based overview of expenditure reduction options in conjunction with best medium and worse case scenarios for projected revenue increases. The overview should identify indicative reductions and revenue increases and how they might be achieved to target that our key financial indicators will be within those of a sustainable Council within 7 years and within 10 years as a maximum.”
I believe this is abundantly clear that council wants options to sort out our finances, but by the 8th August 2012 council meeting nothing appeared to have been actioned. I asked formal questions at this meeting and basically was answered that this had not yet been addressed, but was likely to be provided to council in the next quarter. Well, this did not happen !
I followed up this apparent failure again with formal questions at the council meeting on 9th October 2013. The CEO responded with the following advice: “Clearly the expiration of 22 months between resolution and this month’s meeting may well be considered to be a failure to ‘implement in a timely and efficient manner’”. So there we had an official acknowlegement that council’s requirement was not complied with and needed to be.
But by the 9th October 2013 there was still no report or apparent progress towards one. In view of this, it was resolved that “(…) council allow the CEO to 1st july 2014 for delivery of this information (…)“
Well, to this date, there has been no report to council ! So it would appear that the CEO is either unwilling or unable to comply with council’s direction despite it being a clear requirement of the Local Government Act to do so.
– So more than two and a half years ago council directed that steps be taken to identify options to stop the financial haemorrhaging, and the CEO did not comply with that direction. When the CEO was reminded he had not complied, he offered a lame excuse and still did nothing. When asked again 14 months later, he did the same – more excuses… so council gave the CEO a further, lengthy deadline, to the 1st of July 2014 – which passed two weeks ago. Thus he has missed that latest deadline, again. Well, on the face of it, this elected council seems irrelevant and impotent. Is there more that would confirm this impression ?
– Another resolution of council that has apparently been ignored also came from the audit committee. At the May 2013 council meeting it endorsed this committee’s recommendation that a high level service review be undertaken incorporating the value-for-money principles of “Economy, Effectiveness and Efficiency“. It’s purpose being that council could assess the financial priorities it should be directing toward the services council provides, and “That a further report be presented to the Audit Committee detailing how the high- level service review could be conducted and funded and/or resourced.”
As the audit committee agenda item explained, “The purpose of this report is to recommend to Council that a high-level internal review of Council services be conducted over a 12 month period, in order to ensure that the provision of Council services represents an efficient use of finite financial and human resources, within the context of working towards the long-term financial sustainability of Council and completed within twelve months, with a report to be provided to the Audit Committee for consideration.” In other words it recognises that council needs to get some direction and priorities sorted against its very limited resources. Likewise, it has not been actioned after 14 months…
Again, despite the occasional lip service by the elected members, a casual observer of council business could presume that there is a clear and total indifference by them to deal with council’s financial situation in any meaningful way, as council’s deficit appears to be the area of council’s responsibilities that the CEO, the mayor and most councillors simply do not want to know about.
These three resolutions of council seem very clear in that council states that it wants the financial situation of council addressed. To me that is a quest I have fully supported. But it appears also very clear that this administration is unable or unwilling to meet the formal demands of council, and that council does not follow up.
– From what you’re saying, there’s a pattern of avoiding implementing council’s directions on financial concerns. Does this kind of major disfunctioning, with the CEO not implementing council resolutions, spill into other areas than finances ?
– Apart from financial aspects, there are other resolutions which are also not complied with and you would be very aware of one regarding fire matters that was passed way back on 9 February 2011: “That KI Council liaise with the Country Fire Service, the Bushfire Management Committee, the Native Vegetation Council as a priority to clarify and define the responsibilities for each body so that safe precinct classifications are achieved for all communities.”
Surely this is not difficult to understand, it is clear and concise requiring liaison with those three bodies, but apart from a meeting with the CFS on general issues (where this resolution was not even addressed), in effect, there has been no effort in 3.5 years to comply with this resolution ! I find this a very reckless attitude towards our several communities with very high fire risk. Let us not forget how close it came during the Cygnet River fiasco in February 2013.
– With the CEO responsible for implementing council directions, and apparently refusing to do this on some important cases, how are these and similar matters addressed when council reviews the CEO’s contract ? Which was recently extended was it not ?
– My view is that the review is less effective than it should be. We have the exact same CEO performance review panel as we had for the CEO recruitment panel; mayor, deputy mayor, the same councillor throughout, and the same advising consultant on that panel, who is also the CEO’s contracted mentor. That panel sets the CEO’s KPIs [Key Performance Indicators], coaches, reviews performance, runs the assessment and marks the exam paper. A casual observer of council might think there was a conflict or two there.
– Quite ! No need to say more. It was another informative interview, thank you councillor Walkom.
– I need to emphasise again that these views are my own and not necessarily those of council or any other councillor…
– And like in the previous interviews, I shall add that I understand your usual caveat, you have enough “code of conduct” complaints lodged against you by those who feel ruffled by you. Thank you for your time and explanations, councillor Walkom.
Related posts:
Kangaroo Island Council dire financial situation, part 2 – Interview of Cr Walkom, 2014.07.07
How to undermine a conscientious councillor — Interview of Cr Walkom, 2014.07.04
Why is Council in financial and management trouble ? — Short interview of Cr Walkom, 2013.09.29
Thank you for your time and explanations, councillor Walkom.