Wednesday, May 30, 2007
The vote of no-Confidence was moved following John's So's inability to properly manage the City of Melbourne fiscal budget and his decision to introduce a deficit for the 2007-8 financial year.
The Melbourne City Council, in what was seen as another blow to John So was that he was forced to invite the Dalai Lama to visit the Town Hall on his trip to Melbourne next month. The Dalai Lama has previously been welcomed at Town Hall during his past visits but ever since John So has been at the helm Town Hall, acting on the instructions of the Chinese Government have refused to extend a cordial invitation to the Tibetan spiritual leader. The Dalai Lama in 1992 had officated at a planting of a Budhi Tree in the Council designed 'Peace Garden' located in Carlton Gardens. The original tree was attacked by Vandals and the City Council under Rob Adams has not reinstated the tree.
Mayor survives attacks, but loses Dalai Lama fight
Clay Lucas The Age May 30, 2007
LORD Mayor John So has been forced to use his casting vote to stop a vote of no confidence in his leadership — the first such vote in his six years at the helm of Melbourne City Council.
And at a special meeting of the council last night, the Lord Mayor was forced to invite the Dalai Lama to visit the Town Hall on his trip to Melbourne next month.
Cr So, who is closely aligned to Melbourne's Chinese business community, came under fire two weeks ago for trying to ensure that no councillors met the Tibetan spiritual leader.
He came under renewed attack last night from four of the nine councillors, who confronted him on issues ranging from his failure to attend council committee meetings to accusations of economic mismanagement and claims that he ordered council spending without proper authority.
Cr So normally controls the numbers on the council, but with Deputy Lord Mayor Gary Singer in Europe, visiting the mayors of London and Milan, the Lord Mayor was forced to use his casting vote to defend himself from the attacks.
Shrugging off accusations from Cr Peter Clarke that his mayoral style was becoming reminiscent of former Queensland premier Sir Joh Bjelke-Petersen — because he "made decisions behind closed doors" — the Lord Mayor said: "Melbourne is doing very, very well."
Last night's meeting comes ahead of today's announcement of the biggest shake-up at the council in 14 years.
Consultants Ernst & Young last month completed a $300,000 report on how the council could cut costs.
Chief executive David Pitchford, who deemed the report highly confidential, will give his recommendations to the council's 1100 staff today.
The recommendations could could result in lay-offs at the council.
But the biggest news may have already been revealed inadvertently by the Lord Mayor.
Cr So last week appeared to break the confidentiality agreement surrounding the report when, under pressure from 3AW's Neil Mitchell, he said: "Yes, we get some staff redundants. Yes, of course."
Immediately after staff are told their fate today, the chief executive will hold talks with the Australian Services Union.
Other related coverage
Rare revolt on budget as So confirms job cuts ahead
Councillor to attend Dalai event, even if So doesn't
Budget blow-out a 'turn on' for media man So
As you spend, So shall you reap?
Rudd's Dalai Lama drama
In addition to the John So's media unit Counil governnace is expecetd to also come under review.
The full costs of early termnination payout's and redundancy has not been dislosed. It is expected that the City Council would be up for over 2 million dollars in early redundancy payouts.
Senior executives to go in council cull
Clay Lucas May 30, 2007 - 4:41PM
Melbourne City Council could cut up to 100 staff in a second round of redundancies, a report reveals.
The council is expected to save $1.5 million by sacking 26 people, including several senior executives, in the first round of redundancies, announced earlier today.
It would save a further $5.7 million in redundancies in the second round, the report says.
In the first round of redundancies, the Council will sack several senior executives, including its controversial spin doctor.
The council is set to reveal 26 redundancies as part of its biggest shake-up in 14 years, theage.com.au understands, with up to 100 more to go in the coming months.
Two directors, 10 executives and 14 staff are among those expected to be made redundant today.
Corporate affairs director Hayden Cock, whose package is worth $220,000, is believed to be among those to be made redundant.
Chief executive David Pitchford notified each of the 26 staff this morning.
The move follows the completion last month of a $300,000 report by consultants Ernst & Young on how the council could cut costs.
The report found a massive blowout in labour costs at the council, huge problems with its parking officers, a blowout in executives at the council on more than $100,000, and an explosion of spending on marketing.
Lord Mayor John So, who did not return calls, will come under immense pressure now the confidential report is public.
The report's highly critical findings have found many problems at the council have emerged since 2002 - the year after Councillor So became Lord Mayor.
Thursday, May 24, 2007
Not so marvellous
Herald Sun May 24, 2007 12:00am
GOLD rushes aside, Melbourne has rarely been as marvellous as it is now.
Pulsing with life, it's attracting visitors and new inhabitants in growing numbers. So why are the city's finances in such disarray?
Melbourne City Council, which in the coming year will pocket almost $300 million from its various revenue streams, is in financial difficulties. It faces a budget deficit of more than $4 million and is searching for ways to fill the black hole.
The process will play out behind closed doors, but already council has flagged one measure: extending parking meter hours to 7.30pm weekdays and adding Saturday afternoons.
That ought to do wonders for one of the reasons cited for the revenue shortfall - fewer drivers coming to the city because of rising petrol prices.
Chief executive David Pitchford says cost reduction could include job cutting. But, curiously, the Herald Sun has learned that the council is actually putting on staff.
Here's another potential starting point: Lord Mayor John So should consider parting with the Lord Mayoral limo which is estimated to cost $100,000 a year. Or else park it at one of his meters.
Melbourne City Council commissioned a now confidential $300,000 report by efficiency experts Ernst and Young.
Exact details of the report have been kept secret and away from ratepayers prying eyes. It is understood that the report has recommend major cuts in staff and expenditure, expected to generate up to 10 million dollars in savings, by cutting the fat.
The Council bureaucracy under John so has gotten fat and its now time for a crash diet and exercise to trim the fat.
The Council's governance department in particular has come under scrutiny with the report identifying that some staff were employed, but were not really sure as to what their job entailed. The City Council had gone through a fast pace staffing growth spurt with senior executives redesigning their jobs to suit their life-style as opposed to the needs of the organization.
How the media preceived the So budget.
Herald Sun 24 May 2007
Mayor sharpens axe at Town HallMary Bolling
Herald Sun May 24, 2007 12:00am
LORD Mayor John So is swinging an axe over his staff, admitting a Melbourne City Council budget black hole will result in cuts.
The admission could put Cr So under investigation, with his comments potentially breaking a confidentiality agreement.
Cr So was on the back foot yesterday, after council's big-spending budget included $4.2 million in undisclosed spending cuts, to keep the budget out of the red.
Quizzed about the cuts, the Lord Mayor was asked if Town Hall staff would be sacked.
"Yes, but there are places where staff can be relocated elsewhere," he replied, and later qualified his statement. "Yes, we will have some staff redundancies, of course."
The budget included the $4.2 million hole after a $300,000 efficiency review recommended ways to cut council fat.
The review was shown to councillors three weeks ago after they signed a deed of confidentiality promising not to reveal the contents.
But Cr So confirmed speculation that the review recommended staff cuts, potentially breaking the confidentiality agreement.
Last night, fellow councillor Peter Clarke said he understood the Lord Mayor and Deputy Lord Mayor Gary Singer were already being investigated over the comments.
"To make those comments were completely inappropriate," Cr Clarke said.
"Council has to take action -- there cannot be one law for all the councillors and another for the Lord Mayor."
Council has already asked Victorian Local Government Minister Richard Wynne to investigate one alleged breach of the deed, after a report revealed contents of the review.
Any councillor found to have breached a confidentiality deed could be sacked or fined.
Yesterday, the Australian Services Union slammed Cr So for his comments, and branch secretary Brian Parkinson called for honesty.
"Rather than clarify the situation, John So has chosen to add to the stress and pressure on MCC staff by talking of redundancies in the media without keeping his workforce informed," Mr Parkinson said.
"Everyone thinks their job is on the line."
In this week's budget, council actually allowed for funds to increase staff by 66, taking the total figure to 1076.
The details of the efficiency report and any planned sackings won't be released publicly until next Wednesday.
Former mayor Kevin Chamberlin said the situation showed Cr So was unfit for his job and called on the State Government to sack councillors.
"John So is all about just getting re-elected, and he doesn't care what the cost is," he said.
Yesterday, Cr So said he was regularly congratulated on his work as Lord Mayor. Launching a talkfest about the future of Melbourne, he flagged interest in running for mayor again in council elections this year.
Rare revolt on budget as So confirms job cuts ahead
The Age May 24, 2007
Cash woes send council running to the meters
As you spend, So shall you reap?
Budget blow-out a 'turn on' for media man So
Council stamps feet over post office rent
A LACK of transparency and a "frivolous" plan to light the Tan running track around the Royal Botanic Gardens were the "last straw" for Melbourne City Council's finance chairman Brian Shanahan.
This week, in an extraordinary vote of no-confidence in Lord Mayor John So, Cr Shanahan became the first finance chair at the city council for at least 20 years to vote against his council's budget.
Cr Shanahan yesterday spoke out against Cr So's plans to "ignore" a $4.2 million deficit in the council's budget. This figure has been calculated by consultants Ernst & Young in a cost-cutting review of council operations.
Its report has been deemed confidential by chief executive David Pitchford and has not been released to the public. However, its recommendations will be relied on to find $4.2 million in savings to balance the council's 2007-08 budget.
Cost-cutting methods could include sacking staff, asset sales or abandoning council projects.
The budget, released on Tuesday night, does not indicate where the necessary spending cuts will be made.
Mr Shanahan said his decision not to back the budget was not "made lightly".
"It probably hasn't happened before that a finance chair has voted this way, against their own council's budget," said Cr Shanahan, an ALP member who until recently supported the Lord Mayor in most council votes.
"But the public simply does not have enough information for us to set this budget in the way it should happen," he said.
Cr Shanahan said that a stubborn insistence by Cr So and his team that a plan to light the Tan running track must proceed was the final straw.
"If we spend $1.6 million lighting that track, and not on saving the city's trees, people will be able to run at night and have a view of dead trees," he said.
Other significant items in the budget, revealed on Tuesday, include extending the operating times of city parking meters until 7.30pm on weekdays and Saturdays to raise extra money, dumping plans for a $7 million child-care centre at Docklands and increasing child-care fees by 10 per cent.
Cr Shanahan was to appear alongside the Lord Mayor on Tuesday afternoon to sell the annual budget but he withdrew mid-morning.
Cr So came under renewed pressure yesterday after saying there would be sackings at the council.
He was reluctant to answer questions on the topic but said on 3AW that "of course" there would be redundancies.
Fellow councillors jumped on the admission, calling on Local Government Minister Dick Wynne to investigate whether Cr So had revealed confidential information from the Ernst & Young report.
All nine councillors are already under investigation over the leaking of details from the report to The Age earlier this month.
Unions also snapped to attention after Cr So's comment, demanding that the Lord Mayor reveal possible job losses.
"How many job losses is he proposing and where they will come from?" Australian Services Union secretary Brian Parkinson asked.
Rumours were circulating among staff that up to 400 jobs would go, Mr Parkinson said. "John So has let these rumours and unsubstantiated claims run rife for too long," he said.
Asked whether he would run for lord mayor at November's council election, Cr So said: "I'm running" but quickly changed this to say he was "considering" running.
Earlier the Melbourne City Council had received a $300,000 efficiency report from experts Earnst and Young consultants.
In order to prevent the details of the report becoming public the City Council's CEO had declared the report confidential thus preventing ratepayer's right to know the details of the recommendations. It is understood that the report has recommended up to 10 million dollars in savings, including the reorganisation and reduction in Council Staff, can be made to the Council's recurrent budget.
Reports in the media, earier this month, have given rise for concern by the David Pitchford, Melbourne's CEO, that Council's right to confidentiality had been breached.
David Pitchford in his report to Tuesday's Council meeting, which was brought forward one week in order to discuss issues related to Council finances, had expressed concern that:-
An article on the front page of The Age newspaper on 9 May 2007 (See insert), there are a number of quotes and assertions made by the journalist which could imply that one or more Councillors had possibly breached Section 77 (1) of the Act.
The article states:
- ‘However, one councillor, who spoke on condition of anonymity, has described the report as “a bombshell” ’.
- ‘A second councillor told The Age the Ernst & Young consultants had “identified
some very serious inadequacies within certain departments” ‘.
- ‘”It implies what a lot of us have been wanting: a shrinkage of directors,” the councillor said.’
Guilty of what? Discussing the issues confronting Councils budget and finances in general terms in the course of public debate.
The report to Council made no mention of the fact that the Lord Mayor, John So had just yesterday made mention of details of information contained in the report that Council want hidden, leaving the question is the CEO being a tad bias and overreacting by seeking to intimidate the Council for passing general comment on a document that is in the public interest and should be made public.
Transcript 3AW Morining Radio: Neil Mitchell (8:35AM 23 May 2007)
The following is a transcript of John So on Melbourne Radio 3AW. I leave iot upt to you to read and decide. Does John So really know anything about budgets and fiscal policy?
NEIL MITCHELL: So you're not going to cut $4.2 million?
JOHN SO: This is not cutting. This is a saving…
NEIL MITCHELL: How are you going to save $4.2 million?
JOHN SO: It's very… I mean that's like any business. I run business. As a business operator, I definitely can identify ways, ways to do things more effectively, more efficiently and every budget you factor into 10 per cent increases in like, you get the budget now. I mean the Family Needs funding has increased by 10 per cent and these…
NEIL MITCHELL: Okay, but are you going to cut any spending at all?
JOHN SO: No, no. We have significantly increased the services right through the city.
NEIL MITCHELL: How much are you going to pick up by productivity improvements?
JOHN SO: $4.2 million.
NEIL MITCHELL: So you are going to save $4.2 million somehow, but you're not going to cut it. So you want to say save, rather than cut, right?
JOHN SO: Oh yeah, absolutely.
NEIL MITCHELL: Okay, are you going to save any jobs? Are you going to cut any jobs? Are you going to reduce staff anywhere? Oh for God's sake.
JOHN SO: [indistinct] administration where we'll drop into the overall [indistinct] organisation and how, you know, where they can identify productivity gains…
NEIL MITCHELL: But what does that mean? Are you going to cut staff or not? Are you going to cut staff or not?
JOHN SO: We - there are some - yes, there is places that will be new, that staff can be relocated to it elsewhere. But this is - the report hasn't come in…
NEIL MITCHELL: Well, then, come on, are you going to cut staff or not? Relocate, where to? Within the same organisation? Are we playing games here, $4.2 million or are we…
JOHN SO: That $4.2 million as I say, we identify as a core, and we will, and the positivities are core savings but this something that neither have been factored in. it's a year process. At the moment, I can't give you the figures.
NEIL MITCHELL: No I don't want figures. I want a principle. Are you going to cut staff? Hello.
JOHN SO: Yes, we get some staff redundants. Yes of course.
NEIL MITCHELL: Can you tell me how much the budget is on marketing and public relations?
JOHN SO: I haven't got the figure in front of me. Have you?
NEIL MITCHELL: Do you know how much it's increased since 2001?
JOHN SO: In that area, that's what we will be [indistinct]. You can find something but I think that we will do it, yes.
NEIL MITCHELL: Yeah, I know but has it increased significantly since 2001?
JOHN SO: Oh yes. It has…
NEIL MITCHELL: What percentage, roughly?
JOHN SO: There has been significant increase in many areas but not just the marketing, but in the events and that the events is based on the number of activities in the city centre.
NEIL MITCHELL: Okay, thank you very much for your time.
JOHN SO: Okay, nice talking to you Neil.
NEIL MITCHELL: Councillor John So, the Lord Mayor of the City of Melbourne. Look, there's not just a language barrier there. I mean John So's a little hard to understand but his English is pretty good. It's not just a language barrier there, it's a political barrier. I don't know what the hell he's talking about. But I do know the City Councils is headed for the red. Deficit. I suspect I know why.
Tuesday, May 22, 2007
John So's financial management of the City Council is now faced with reality of having to pay for his spending spree.
The City Council at a cost of $300,000 has commissioned an efficiency report. the details of the report are secret and the public kept in the dark. it is understood that the report recommends a major reduction in staffing levels and reorganisation of the councils administration. The City Council has seen a blowout in staffing and administration costs since 1996.
The City Council now faces a 4 million dollar short fall in his recurrent budget and current levels of expenditure are unsustainable.
John So is has the reputation as being the man that an not say No has been the biggest spender in the Council's history. The council has got away with this high level of expenditure in the past due to significant increases in property values and inner city development which has generated substantial income for the city council. having access to more funds the city council went on a spending spree. Councillors and staff regularly travel overseas on junkets staying in five star accommodation with all expensive paid holidays.
It understood that the efficiency report was critical of Council's governance and financial reporting which the consultants claimed mislead the council as to the level of expenditure. one such example was the attainment by Ms Linda Weatherstation when asked why costs associated with former City Councillor Anthony Nicholson had not been reported. Ms Weatherson responded by saying that the costs had not been acquitted therefore had not been reported.
The efficiency report has identified savings of upto 10 million dollars in Council's current expenditure. It is time to cut the fat from the dim Sims - Question is John So up to it..
Melbourne council considers cuts for balanced Budget
Tuesday, 22 May 2007. 18:16 (AEST)
The Melbourne City Council is considering cuts in staff and services to balance its $354 million Budget.
The council needs an extra $4.2 million to pay for its budget initiatives.
An efficiency review is due to be completed next week.
The extra funds are likely to come from cuts to jobs and services or extra sponsorship and grant money.
Chief executive David Pitchford denies the council is spending money it does not have.
"The council preference is for a balanced Budget so the only way that we can balance the Budget is to work out how we will deliver those savings across the year," he said.
The city's parks and gardens, including new drought initiatives, have been allocated $6.4 million.
Almost $30 million will go towards promoting events and $22.2 million will be spent on new capital works.
Melbourne drivers will have to pay for an extra hour of parking in the city from July, with plans to increase parking times in the city from 6.30pm until 7.30pm released today.
The increase in restrictions is part of a number of changes to parking expected to provide council with an extra $1 million in revenue.
The council has already seen an increase in parking revenue.
Melbourne city drivers paid more than $70 million in parking fees and fines this financial year, an increase of $5 million on 2005-2006.
But a reduction in street parking places in the city is expected to cost the council more than $500,000.
Meanwhile, Melbourne's newest inner city suburb will cost Town Hall more than a $1 million over the next 12 months.
The urban development will be transferred to the council from Vic Urban in July, and it is the first time the financial impact of the inner city area has been taken into account by the council.
Residents and businesses moving to the new suburb are expected to pay a total of nearly $10 million in rates next financial year.
But the impact of depreciation on the $204 million development will cost council $3.5 million initially.
The council's three-year vision for the Docklands is expected to be released early next month.
Wednesday, May 09, 2007
Source: The Age
There is no doubt that the City Council is overstaffed and over governed. Finances in the City Council are overstretched with John So having raided the Councils reserves on an unchecked spending spree reducing the Councils working capital ratio to the lowest on record.
The City Council is facing a major crisis in the retail sector as the cost of doing business in the City Center soars and customers prefer to shop else where where parking is free and their dollar goes further. The City center is no longer the home of Melbourne entertainment or shopping. Major cultural assets such as the Museum of Victoria have been located at the outskirts of the city centre instead of taking center stage.
The city is facing serious decline as a result poor planning and governance policies undertaken over the last 10-15 years. Rob Adams should either take on more responsibility or be sacked, he has created his own portflio and job description excluding the tasks that he does not want and can not to deal with.
The Council administration has become fat and non-productive. It exist to support itself taxing the life from the city itself. Walk down Melbourne's Swanston Street and you will soon see the quality of retail more $2 junk shops and sex shows then Kings cross.
We have no doubt that the City can and should undergo a major cut back in the top end. Two directorships at least should be scrapped and their functions merged.
The Ernst & Young consultants report should be published. the ratepayers and citizens of Melbourne have a right to know the true extent and recommendation that are before the City Council prior to the City Council doing a butchers hatched job to dress the mutton up as being lamb.
Council rejig to cut jobs
The Age - May 9, 2007
RADICAL overhaul of Melbourne City Council appears certain, after consultants recommended the sacking of at least two layers of senior management in a secret report.
A number of top-level staff — including two directors — are likely to lose their jobs in what is looming as the biggest shake-up at the council in 14 years.
Senior staff today will be given the report on how the council can cut costs — for which consultants Ernst & Young were paid $300,000.
But the confidential document — which contains crucial financial recommendations — will be kept from the public for several weeks until budget negotiations near completion.
Council chief executive David Pitchford last week forced councillors to sign confidentiality agreements before they were given a copy of the report.
The nine councillors were warned they risked being sacked if they discussed publicly any of the report's findings before its official wider release on June 3.
However, one councillor, who spoke on condition of anonymity, has described the report as "a bombshell".
The Age believes Ernst & Young has recommended how the council can cut its costs by more than $5 million.
In part, the report recommends slashing senior staff numbers, which have almost doubled under Mr Pitchford, who is Victoria's highest paid council officer on a salary of up to $396,000.
At least 85 staff at the council are on salaries in excess of $100,000; when Mr Pitchford became chief executive in 2003 there were 46 in that bracket.
Lord Mayor John So last night said: "Like any organisation, (the council) can actively find opportunities to do things better, smarter and cheaper."
The Age believes the report finds the council:
■ Should reduce its number of directors from seven to five.
■ Needs to undergo a structural reorganisation.
■ Should reduce its salary bill by cutting the number of staff paid more than $100,000.
■ Is too reliant on consultants.
■ Should consider farming out some services, including child care, to the private sector.
The likelihood of a major restructure comes despite Mr Pitchford last year reorganising the council to try to make it function more effectively.
The Lord Mayor came under fire last night for allowing the report to be made confidential.
"John So should not allow this sort of thing to go on behind closed doors," former lord mayor Kevin Chamberlin said.
"This is a misuse of the confidentiality provisions of the Local Government Act. It is using the act to hide financial information from the public that will embarrass the council."
A second councillor told The Age the Ernst & Young consultants had "identified some very serious inadequacies within certain departments".
"It implies what a lot of us have been wanting: a shrinkage of directors," the councillor said.
Mr Pitchford last night defended having spent $300,000 on the report.
"This is not a public review," he said. "It is for internal purposes. The report will remain confidential until its findings and recommendations can be fully assessed."