Bayside Council will seek a $17 million contribution from the State Government to recompense ratepayers for costs related from the misappropriation of funds by employees of the former Botany Bay Council.
Last July, an investigation (Operation Ricco) by the Independent Commission Against Corruption (ICAC) found that former Botany Bay chief financial officer Gary Goodman, who passed away late last year, and 11 other people, mostly employees of the former council, acted corruptly raising more than $5 million in bogus invoices.
Bayside Council mayor Bill Saravinovski said the real cost is much more and is impacting on the council.
“The legacy of the misappropriations and costs of remediation result in a net fund deficit of $17 million, placing Bayside Council at a significant disadvantage,” Cr Saravinovski said.
Bayside Council’s former administrator Greg Wright said in his end of term report that the total cost of the merger will exceed the $10 million provided by the State Government to pay for the merger costs.
“At the time of writing (July, 2017), it is estimated that $3.7 million has been spent on merger related activity and $14.7 million is still required to be spent over the next two years,” Mr Wright said.
In a mayoral minute presented as last week’s Bayside Council meeting, Cr Saravinovski called on the council to make representations to the NSW Premier and the Minister for Local Government seeking a financial contribution of $17 million.
He was unanimously supported by his fellow councillors.
“The council is progressing in the significant work associated with the merger of the two former councils in endeavour to achieve the community benefits and targets set by the State Government,” Cr Saravinovski said in his mayoral minute.
“The cost of implementing this work will far exceed the funding provided by the State Government to meet these merger costs.
“The burden of this change has been compounded by the legacy related to the significant officer’s misconduct that occurred at the former Botany Bay Council and publicly reported by the ICAC as part of Operation Ricco.
“The former Administrator acknowledged that the loss from misappropriation of funds by former Botany Bay Council employees was well above that reported by the ICAC.
“The magnitude of the loss impacted on the former council’s operations and the maintenance of its assets. Bayside Council wears that legacy and carries the cost burden of the legal proceedings, recovery action and the significant work associated with responding to the ICAC and the NSW Audit Office.
“The legacy of the misappropriations and costs of remediation result in a net funding deficit of $17 million, placing Bayside Council at a significant disadvantage.”
Cr Saravinovski said that the council’s capital works program identifies a number of projects which will be impacted by the $17 million funding deficit.”
Speaking to the Leader, Cr Saravinovski would name which works may be impacted.
“I don’t want to be alarmist but we have projects that needed to be looked at including operational facilities on both sides of the Bayside area,” he said.
“We are in an unusual situation because of the forced amalgamation, with the corruption and the amount of money we have had to spend. We have to go after every single person that had fraudulent transactions at Botany
“It is unfair that the people of Bayside lose out because of these guys.
“The State Government gave us $10million to pay for the costs of the forced amalgamation. But we are in a unique situation to other councils that have been amalgamated because we have inherited the deficit from fraudulent activities (of the former Botany Council.)
“We have moved on and accepted we are Bayside Council, but we need this money which could have been spent on community facilities.”
Ongoing costs borne by the new Bayside Council include the costs of auditors to examine the books of the former Botany Council, as well as legal costs, he said.
“I’m sorry that Mr Goodman has since passed away but at the end of the day, we have to make sure we recover all this money,” Cr Saravinovski said.
Speaking in State Parliament this week, Rockdale MP Steve Kamper also supported the Bayside Council’s request for additional financial help.
“Following the Government's forced merger process, it has since become clear that in many cases the funding provided to facilitate the merger process has been woefully inadequate,” Mr Kamper said.
“I believe after the poorly implemented, and now abandoned, merger process the least the Government can do is provide fair funding to councils like Bayside that have been unable to comply fully with their merger obligations with the funds provided.
“In addition, the residents of Bayside have had to face the incredible indignity of discovering that they were being robbed blind by a group of corrupt council officers at the former City of Botany Bay.
“The State Government's funding has simply not been anywhere near enough to cope with the dual issues of merging the councils while dealing with the fallout from the gross misconduct of the officers identified by Operation Ricco.
“Mayor Bill Saravinovski and the elected councillors are doing the best they can to fight for the community, but the time has come for the State Government to step in and do what is right.”