March 19th, 2025Leaked report on Hepburn Hub at The Rex project
The Hepburn Shire Council has acknowledged an apparently unauthorised release of the Local Government Inspectorate (LGI) draft report on the Hepburn Hub at The Rex project.
The draft report concerns an investigation of the management of the project which proposed to convert an art deco shopping arcade (Rex Theatre) on the main street of Daylesford into a community facility, including library and council offices.
The council also acknowledges that due to the report’s release, the community will be feeling a range of emotions; frustration, anger, sadness, discontent and discomfort.
The council has been calling for the finalisation and release of the LGI report for many years, to bring closure to the situation.
In a media release issued this week the council has stated that: “The way the confidential draft report has been made public is concerning and Council has formally written to the LGI to request a thorough review of the situation.”
The council’s media release also states that:
“As far as Council’s awareness of the matters raised in the report, in 2021 a number of Councillors and Officers were provided with an earlier draft for comment.
“However, they were under a legal obligation not to reference receipt of the report or disclose its contents. This 2022 version of the report, though, is unfamiliar to our organisation and Councillors and Council cannot comment on its origins or accuracy.
“The report obviously highlights significant areas for improvement, and a media release issued by the LGI in September 2024 noted that they were ‘satisfied that the Council has taken remedial action to put in place measures to avoid future complaints of a similar nature, including the creation of a new governance and policy framework’.”
Hepburn shire mayor Cr Don Henderson, said: “The current leadership (post-2018) at Council has implemented important improvements to governance, service delivery, community engagement, and transparency.
“These vital improvements have occurred while we have responded to the pandemic and the impact of three major storm events (costing Council $3.5 million), and delivered key projects including Djuwang Baring, The Mechanics Trentham, Future Hepburn and our Financial Vision”.
Chief Executive Officer, Bradley Thomas said he was proud of the organisation’s willingness and ability to ensure that the failings identified in the report do not occur again.
“Our organisation and community deserved better, so over the last six years we have put in place countless improvements to systems, processes and governance; the implementation of Project Control Groups, creation of a Major Projects Unit and an increased oversight by the Audit and Risk Committee and Councillors.
“This has resulted in improved project delivery, governance and financial oversight,” Mr Thomas said.
The financial loss associated with the Hepburn Hub at The Rex project was $5.65 million. This included the purchase of The Rex in 2016 for $6.345 million, additional expenditure of $3.04 million, and proceeds from the sale amounting to $3.74 million.
“The $5.65 million is significant, however, it is important to be clear to the community that the current rate cap variation and savings associated with the implementation of our Financial Vision would still be required even without it,” mayor Cr Henderson said.
“The Financial Vision notes an annual shortfall of $4 million per year across the 10 years so, had the loss associated with The Rex project not been incurred the shortfall, would still have amounted to $3.5 million annually.
The council is working with the relevant stakeholders to bring closure to and recover from this incident and will continue to advocate for the community and their interests now and into the future.
This story based on a Hepburn shire Council media release. Image: File
