Resignation letter from Manningham City Council

August 8, 2012

Cr Geoffrey Gough
Manningham City Council

Delivered by hand

cc Leigh Harrison, Steve Goldsworthy

Friday, August 3, 2012

Dear Cr Gough,

After almost 4 exhilarating years it is with some regret that I hereby tender my resignation as a Manningham City Councillor with effect from 5pm on Monday, August 6, 2012.

As you know, I will be nominating for Melbourne City Council next month and the Local Government Act forbids serving councillors from contesting an election in a different municipality. With just 2 council meetings left in the term, the time is right to depart.

Since the last council election we have worked extremely hard in trying circumstances to limit the damage caused by a noisy group of councillors on a chaotic crusade against a well-run council.

For a nerve-wracking two year period until your election as mayor in December 2010, this group of inexperienced and grudge-bearing councillors had the capacity to manipulate and dictate council affairs to their own end.

Fortunately, with the support of Manningham's strong management team and a group of sensible councillors, we were able to resist the worst excesses of the self-interested ruling faction.

Slowly, but surely, common sense prevailed with the turning point being the resignation of then deputy mayor Fred Chuah in November 2010 after a comprehensive 40-page finding of misconduct by an independent Councillor Conduct Panel.

The resignation of factional chief and former mayor Charles Pick in June 2011 was another important step forward and we now have what I believe is a contained minority of just 3 unsuitable councillors who, unfortunately, are still hell-bent on waging war against perceived injustices.

Having lost the debate and failed to implement their agenda, the 3 residual members of the faction are now clearly focused on inflicting as much damage on me and my family as they can muster. For two years, you played good cop and I played bad cop and it worked. In a final chapter of this sad saga, the bad cop is now being drawn into a destructive quagmire of deceitful mud-throwing.

After long discussions with Paula, we have decided it is in the best interest of everyone concerned to make a dignified exit from a toxic situation and concentrate on the forthcoming Melbourne campaign.

As you are aware, on July 23 Cr Ivan Reid, Cr Meg Downie and Cr Graeme Macmillan initiated a Councillor Conduct Panel against me and publically raised the spectre that I am some sort of criminal facing the serious prospect of being sent to prison. Truth be known, I did nothing more than criticise their excesses, poor conduct, fanatical obsessions, arrogant factionalism, poor attendance records, colourful associates, endless negativity and wacky ideas, eventually winning most of the political arguments.

The Local Government Act clearly envisages that a Councillor Conduct Panel is a confidential process – something which I studiously observed during the 7-month CCP involving former deputy mayor Fred Chuah in 2010.

As was evident from events in the council chamber on July 31, the minority faction authorised the leaking of their 37-page CCP application to Kristian Silva, an inexperienced reporter from Fairfax Media's Melbourne Weekly Eastern.

Consequential media reports referencing criminal charges and prison in both the Melbourne Weekly Eastern and the Melbourne Times, which covers the City of Melbourne, have been extremely hurtful. Indeed, there was even a cartoon published involving a divvy van. This followed a series of vicious attacks by the same group of malcontents in The Sunday Age, which Labor supporters then used in an anonymous dirt sheet during the recent Melbourne by-election, something none of the 3 councillors concerned ever expressed any concern or regret about.

I only received the 37 pages of material for the Councillor Conduct Panel through the formal channels on Tuesday, July 31, 7 days after the Fairfax journalist was provided access to an online version through an electronic drop box which I believe was used by Cr Ivan Reid.

Having reviewed the material assembled by the three councillors it is clear that claims of criminal misconduct are baseless and trivial.

They claim I'm criminally conflicted on matters related to the Bulleen Boomers because I coach a team for the club. This is factually wrong. I coach my daughters' primary school basketball team which is nothing to do with the Bulleen Boomers.

Cr Reid even claims some form of criminal offence after he pocketed $500 over a friendly bet we had on the outcome of a council countback following the resignation of Fred Chuah in late 2010.

If he's so concerned, I've asked him to donate the money to Doncare, Manningham's only charity which ejected Cr Reid from its board recently for failing to attend board meetings or submit apologies. Cr Reid was presumably pre-occupied with pursuing his campaign against me, which has even extended to duplicitously soliciting information from groups I've dealt with over the years.

If the CCP had proceeded, I am confident the application would have been struck out at the first directions hearing as a malicious and vexatious political smear designed to damage my reputation through media reports. This has already happened and no doubt there will be more through the Labor smear-sheet Vexnews, which the Charles Pick-led Labor faction at Manningham used regularly to defame, distort and intimidate over the past 3 years.

The inappropriate media leak of all the CCP “material” was a clear demonstration of intent, which was further confirmed by statements in the council chamber on July 31.

Even worse, the faction then distributed an unauthorised and defamatory press release on August 1 which misrepresented the council's position and was head-lined “Someone had to blow the whistle on this cancer”.

These comments by Cr Reid were particularly hurtful and defamatory and on departing council I will consider all options in choosing how to deal with them:

Extract from Reid-Downie-Macmillan press release

Manningham City councillors confirmed reports today that Stephen Mayne is being investigated for 13 conduct and 8 alleged breaches of the law, carrying penalties up to $6000 or jail.

Members of a Councillor Conduct Panel have been appointed this week to investigate the misconduct allegations. Council has also requested an investigation of the charges by the Local Government Inspectorate.

Cr. Reid asked, "Will Stephen Mayne deny he was reprimanded for trying to derail a legitimate tender process? Or that he had financial motives when he tried to block a community organization's lease? Such actions are serious crimes which betray our community.”

Absolutely I will deny that this incoherent grab-bag of issues cobbled together by these 3 councillors constitutes anything which remotely warrants state government intervention or criminal charges.

The confidential tender process Cr Reid references is something that his colleague Cr Macmillan and myself both agreed at last Friday's audit committee probably should never have happened, because it involved a council-created and council-funded community group tendering for the management rights to council-owned sporting facilities. After a long process, the confidential tender is still not resolved. Perhaps more will be said once it is finalised, but I obviously won't be involved and believe my actions were entirely appropriate for an elected councillor.

Cr Reid continues to back his factional colleague Fred Chuah

As for having “financial motives” in “trying to block a community organisation's lease” this involved a piece of council business which should have been tendered, namely the $250,000 rental subsidy at council's just completed $40 million MC2 building on Doncaster Road to a group with a paid board chaired by Cr Reid's factional colleague, Fred Chuah.

I declared a conflict because at the time this council largesse was dished out, this group was indeed still suing me and Cr David Ellis for defamation over issues related to the misconduct findings against its chairman, Mr Chuah. However, contrary to Cr Reid's claims, I never had a personal financial interest in this matter as the litigation was fully covered by council's professional indemnity insurance policy.

From a governance perspective, I'm disappointed Cr Reid never shared my concern that ratepayers handed out a $250,000 rental subsidy to a group chaired by a former councillor who still hasn't apologised to council as directed by an independent Councillor Conduct Panel and is still suing Cr David Ellis for defamation in the Victorian Supreme Court. And as Cr Reid argued hard to push through these arrangements, he never declared a conflict of interest on these matters despite his formal factional association with Mr Chuah.

Bizarrely, these 3 councillors have spent the past 18 months refusing to accept the independent umpire's decision about their factional colleague, yet now they've embraced the same Councillor Conduct Panel process which they've been attacking and denigrating.

Whilst I am more than capable of responding to and dealing with the specifics of the fanciful and inaccurate claims outlined in their submission, the processes triggered will further destabilise and distract the sensible majority and our long-suffering senior management team going into a council election.

It has been less than 2 weeks since our excellent CEO, Lydia Wilson, departed 6 months earlier than expected, partly due to frustration at dealing with the endless antics, criticisms and incoherence of the old faction.

Why should our acting CEO, yourself and other senior managers be forced to meet at short notice last night and put out the following press release correcting the calculated distortions of these three councillors?

Media Statement by Manningham mayor Geoff Gough

Wednesday, August 1, 2012

“I wish to put on record, in the strongest possible terms, that the media release issued today by Councillors Reid, Macmillan and Downie, is not an officially endorsed position of Manningham City Council.

“At the request of Councillors Reid, Macmillan and Downie, I personally referred their letter of complaint to the Local Government Inspectorate for consideration.

“In referring the complaint, I made no assessment of the validity of the allegations. There is no implication that any of the allegations are justified. It is not true to say that the matters are under investigation by the Local Government Inspectorate. It is up to the Inspectorate to decide whether the letter of complaint warrants an investigation. I have heard nothing further from the Inspectorate.”

I have great respect for the work that our senior governance executive, Steve Goldsworthy, has done over the past 4 years. He has provided calm and sensible advice on a range of matters in very difficult circumstances.

If I was to stay for another few weeks before resigning to contest the City of Melbourne election, much of Mr Goldsworthy's valuable time would be wasted as the official registrar of the Councillor Conduct Panel.

Indeed, the processes against Mr Chuah produced 7 boxes of documents over 7 months and the applicants all know there is a little prospect of reaching a conclusion before proceedings must be put on hold when the caretaker provisions commence.

Since I've long been on the record as leaving Manningham to run in Melbourne, these 3 councillors knew full well their CCP process would have been terminated. If genuinely serious, they would have initiated the Councillor Conduct Panel months earlier. Instead, this is nothing more than a media stunt as will be proved when the Municipal Inspector takes no action.

In my estimation, the actions of the old faction have wasted many hundreds of hours of officer time as well as close to $1 million in lawyers, accountants, consultants, mediators, probity auditors, countbacks and VCAT appeals. They have also damaged the reputation of all Manningham councillors, as well as council as a whole.

It is remarkable in the circumstances that decision-making at Manningham has continued to function quite well and we remain one of the six financially strongest councils in Victoria as rated by the Auditor General.

Indeed, the opening of the $40 million MC2 facility next month will deliver the best integrated community hub in Victoria, something Cr Downie and Cr Macmillan have previously predicted would be a white elephant delivering nothing more than a legacy of debt.

As you know, Manningham is debt free, held more than $30 million in cash as at 30 June and has net assets of $1.57 billion, up from less than $1 billion 4 years ago.

Governance reforms in Manningham

As a long-time campaigner for good governance and transparency, I'm particularly pleased that the officers and a majority of councillors have embraced a range of reforms over the past 4 years which have made Manningham Victoria's most transparent council.

# We have abolished ward grants, the questionable system by which groups of ward councillors could randomly dish out $120,000 a year to individual community groups.

# We've moved from having a councillor-chaired and controlled audit committee to one with a mandated majority of independent members and an independent chair.

# The system of public questions at council meetings has been opened up by adding the ability to ask oral questions at the beginning of a meeting to the old system which requires written questions after all formal business has been dealt with.

# We were the first Victorian council to voluntarily disclose its planning win-loss record at VCAT online.

# We will be the first Australian council to voluntarily embrace ASX-style disclosure of senior executive pay in the forthcoming annual report.

# Audio recordings of council meetings are archived on our website to maximise community participation in democracy and provide a more comprehensive record of proceedings.

# After controversy relating to untendered and highly subsidised tenancy arrangements in council buildings such as MC2, we resolved to disclose all such community rental arrangements on our website.

# And finally, the forthcoming August council meeting will comprehensively disclose all councillor expense claims since 2008, allowing the community to compare this against the $300,000-plus budget for the 4-year period. This was a reform long resisted by Cr Downie.

Whilst not a governance matter, we also pushed through a double rates proposal on pokies venues which will fund important problem gaming programs into the future.

Despite the occasional skirmishes which are always expected in politics, I've really enjoyed working with yourself, Cr Grace Lavella and Cr David Ellis over the past 4 years.

It just goes to show that a Liberal, a Green and two independents can work well together, especially when bound by a basic belief in honest dealings, courtesy and the need to support professional advice from a highly regarded management team.

After all the abuse that our resilient Chief Financial Officer Rob Spargo was subjected to, I was particularly proud to be one of his referees when he was declared public sector CFO of the Year by CFO Magazine in 2010.

There was no need for a $400,000 independent financial inquiry into Manningham to investigate grave matters akin to a Royal Commission. There was no need to sack highly regarded executives and hundreds of staff. There was nothing fundamentally wrong with the reporting arrangements and management competency of those operating our well-regarded nursing home facilities, something which was clear to all reasonable people after almost $400,000 was spent on investigations, lawyers and reviews.

How 5 elected councillors could go to war for 2 years over a much-loved nursing home and aged care provider led by a volunteer board remains one of most bizarre elements of this rollercoaster ride. With three former mayors on the Manningham Centre Association board, maybe it just got caught up with this mentality that everything before 2008 was rotten at Manningham.

Mr Mayor, I'll miss those regular 3-5 hour meetings every Tuesday night as we wrestle with the complexities of governing our 120,000-strong community with its “balance of city of country”.

However, I won't miss the negativity of the marginalised malcontents. Local government is unique in the way it often attracts candidates for office who are motivated by revenge after brushes with council on local laws and planning issues.

I hope the community chooses to re-elect both you and Cr Lavella in our Heide ward in October and that you are joined by other constructive individuals who have the temperament, skills and capacity to make a positive contribution.

I've learnt a lot at Manningham which should stand me in good stead to make a positive contribution if elected in Melbourne, a cohesive and well-run capital city council under the leadership of Lord Mayor Robert Doyle.

I'm also looking forward to stepping up my commitment to corporate governance as a director of the Australian Shareholders' Association.

One of the key lessons from the past 4 years is that the importance of good governance cannot be understated. I've long argued that any institution or system requires the following four criteria for ongoing success:

1. Capable, honest, educated, consultative and inspiring leaders.

2. A well-designed system that encourages these leaders to maximise stakeholder benefit and achieve optimal outcomes.

3. Maximum transparency and timely information disclosure about the performance of leaders and the systems in which they operate.

4. An ability to seamlessly change leaders and system-design if warranted by the information disclosed about performance.

Local government reforms

In terms of reform, I believe the Victorian local government electoral system needs to be changed so that individuals with criminal convictions or serious regulatory contraventions with councils cannot run for public office in order to either be elected themselves or deliver preferences to like-minded candidates.

The annual horse-trading around councillor mayoral selection can also be quite destructive and distracting. Victoria should move to a NSW-style system of directly-elected mayors where candidates for the top job must also simultaneously run for council, unlike the Melbourne City Council model. This will attract stronger fields and retain the services of defeated mayoral candidates with much to offer. To improve capacity and diversity of elected leadership, I would even support a model where 1 or 2 voting councillors were appointed by some form of independent commission.

Similarly, councillors should focus more on strategic decision making and high-level community consultation, thereby spending less time on low-level customer service issues which should be efficiently processed by staff. Such a change may help attract more experienced business people and corporate directors to the sector as they are sadly under-represented at present.

Finally, I'm firmly of the belief that Victoria has the best local government system in Australia with minimal corruption, appropriate scale, good transparency, strong financial metrics and an excellent record on both service delivery and infrastructure development.

The Kennett reforms around amalgamation and competitive tendering of the 1990s, plus some good governance initiatives on disclosure, auditing and councillor conduct by the Bracks and Brumby Labor Governments have combined to serve the community well.

I'm hopeful the belated introduction of IBAC will further improve conduct and governance issues in the sector but firmly believe that maximum disclosure and well-resourced journalism are the fastest, cheapest and most transparent ways to maintain standards.

To that end, I repeat part of my submission to last year's Finkelstein Inquiry that with newspaper business models under siege, governments, including councils, should facilitate the establishment of online journalism ventures dedicated to independently covering a complicated and vital sector more comprehensively than currently occurs.

Many councillors I know are frustrated by their dealings at the local level with a revolving door of young, under-paid and over-worked reporters and then getting slammed by shock jocks and tabloids whenever the mainstream media covers the sector.

There have been some awkward moments simultaneously operating as an elected Manningham councillor, governance campaigner and a disclosure-oriented journalist for the past 4 years.

I had no intention of being so visible. However, Manningham endured some destructive elements attempting to malign a well-run council since the 2008 elections and I firmly believe my various disclosures and public utterances have contributed positively to the overall outcome for the community and those who deal with council. Public pressure and the discipline this created helped us dodge a bullet.

Thank you again for your wise counsel and leadership as Mayor over the past 2 years and I look forward to following your progress in the period ahead.

Yours Sincerely
Cr Stephen Mayne