September 12th, 2024Nothing to see here, no report from LGI
The Local Government Inspectorate will not take any further action into the investigation of Hepburn Shire Council and The Rex Theatre development – and its report will never be released.
The Inspectorate issued a media release last week which said it found there was insufficient evidence to prove to the requisite standard of proof of the commission of any disciplinary breaches or criminal offences contrary to the 1989 Act.
“Further, the Chief Municipal Officer is 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.”
The release said in 2019, the LGI received a complaint that made allegations relating to the council’s involvement with The Rex Theatre redevelopment.
“Since receipt of the complaint, the LGI has undertaken a rigorous investigation of the allegations. Throughout, Hepburn Shire Council and its councillors have co operated. The LGI’s investigation has now been finalised.”
The release says the Local Government Inspectorate is the dedicated integrity agency for local government in Victoria.
“The Chief Municipal Inspector leads the LGI and has functions and powers, including those set out in the Local Government Act 2020, to enable the LGI to examine, investigate and prosecute any matter relating to a council’s operations and any potential breaches of the 2020 Act and its predecessor the Local Government Act 1989 (1989 Act).”
Hepburn Shire Council response
Mayor Cr Brian Hood said that it was extremely disappointing that it had taken so long for the Inspectorate to arrive at its conclusion and no report would be issued.
“We are frustrated and very disappointed that a comprehensive, detailed report won’t be released. The failure to issue a report into The Rex project denies transparency and accountability and lets down the community, councillors and council officers,” he said.
Cr Hood said ensuring the appropriate checks and balances were in place meant failures of the past would not be repeated and emphasised the importance of “having a culture where officers of all levels feel able to raise concerns about governance”.
“The same applies to councillors. The LGI media release acknowledges the current officer and councillor group had improved governance oversight.”
Cr Hood said he had other concerns including that the LGI undertook a “rigorous investigation” yet has provided no reason why it will not issue any report.
“The failure to report denies an explanation the community is owed. It prevents accountability and transparency.”
He added that the LGI concluded there was “insufficient evidence” to warrant any disciplinary or legal action.
“For any organisation to self-report to a regulatory authority is a significant step. Council management of the day were obviously of the view that some matters warranted investigation by an independent regulator.
“It would seem there is a significant disparity between the council management who self-reported to IBAC and the Inspectorate’s unexplained conclusion.”
Cr Hood said The Rex saga highlighted what can go badly wrong in any organisation if the culture isn’t right or if there is a light-handed approach to governance.
“The purchase of The Rex, contrary to community consultation, led to a substantial financial loss – a waste of ratepayers’ money – and tarnished the council’s reputation.
“And let’s not forget while all the attention was on The Rex, the Daylesford Town Hall was shamefully neglected and is only now getting its much-need new roof and replacement electrical systems.”
History
Hepburn Shire Council bought the Vincent Street, Daylesford former theatre in 2016 for $6 million – a move prompted after its toilets were closed to the public. The council then spent $3 million on the building which was to house a cinema, staff offices, a library and public toilets, with another $6 million needed to complete the project.
Interim CEO Bruce Lucas paused the Hepburn Hub at The Rex project in June 2018, becoming concerned about governance failures, also reporting the issue to the Audit and Risk Committee. Incoming CEO Evan King reported concerns to the Independent Broad-based Anti-corruption Commission (IBAC), and ultimately the Inspectorate commenced an investigation.
In December 2021, council officers recommended that the council continue with the project. However, four councillors voted against the project – Cr Lesley Hewitt, Cr Don Henderson, Cr Juliet Simpson and Cr Brian Hood. In favour of continuing with the hub were Cr Jen Bray, Cr Tessa Halliday and Mayor Cr Tim Drylie.
Present day The Rex was bought from the council in December 2022 by entrepreneurs and businesspeople Eddy and Malinka Comelli, and David and Yuge Bromley, for $3.75 million.
Words & image: Donna Kelly
