No review of City of Joondalup staff costs

City of Joondalup.
City of Joondalup.

THE City of Joondalup has voted not to engage an external consultant to review the City’s employee costs and efficiencies.

Last June, Cr Russell Poliwka requested a report on the costs involved in having the City’s wage expenses reviewed, including staff structures, contracts and salary increases, and cost efficient alternatives.

He said there was a “perception from ratepayers that the City’s current wage impost was too high and had a detrimental effect resulting in constant demand for rate increases”.

He said about 42 per cent of the City’s operating costs was going to employee wages and the number of executive staff earning more than $100,000 had increased from 24 in June 2008 to 136 in June 2017.

The report was presented to the council at its meeting last month, with City officers recommending the council not support engaging an external consultant, which it estimated could cost more than $400,000.

At the meeting, chief executive Garry Hunt said the requirement to identify annual salaries more than $100,000 had not changed since it was introduced in 2005.

He said using the wage price index, a $100,000 salary in 2005-06 would equate to $159,000 in 2016-17 and only 23 employees were above this threshold.

The council document also stated that the City reported the total remuneration package, which could include the cash salary component, superannuation, vehicle allowances and other factors that could take the annual earnings to more than $100,000.

“Bottom line is, the employee costs of the organisation relates to the services that we have, services are determined by the council and it is our job to work within the budget adopted by the council,” Mr Hunt said.

“We are a people business and we provide services that no one else provides.”

Mayor Albert Jacob said having 40 per cent of the City’s operations cost going to employee costs for “some 700 staff” was “very good” and was similar to other service-driven businesses.

He said over the past 20 years, the City had been 18 per cent cheaper on the rate in the dollar than the City of Wanneroo despite being of a similar population, it had some of the lowest turnover rates in the state at below 8 per cent, and the average weekly earnings of City staff was 16 per cent lower than the state average.

“We are also one of only 10 local governments in this state whose employee costs actually decreased last year and we are on track for another decrease this year, all the while our services have continued to improve and increase,” he said.

“Staffing costs have reduced – they have found a phenomenal amount of deficiencies and I think it’s time to support and appreciate the people we have in this place.”

However, Cr Poliwka said there was still a need for an external review.

Local government has to change,” he said.THE City of Joondalup has voted not to engage an external consultant to review the Cit

“It’s not about performance, it’s about getting cost efficiency.”

He said he was not suggesting “wholesale cuts” but it was time to get an “intervention” to see if “we can get the same high level of outcome with new technologies”.

He also suggested the City adopt a structure where it did not fill positions when employees left.

Cr Poliwka said spending $400,000 on an external review could save five times that amount.

“And if the review says we are the best operating machine in town then that’s worth $400,000,” he said.

Cr John Chester agreed saying if the council accepted there was “some disquiet in the community that the City could be operating more efficiently” then the only way to know “once and for all” was to get an independent assessment.

However, Cr John Logan said spending $400,000 for a consultant who “may very well come back and tell us we’re on track… at a time when our operating deficit is in the millions would be nothing but foolhardy”.

Cr Tom McLean also pointed out that reports from Deloitte Australia showed the City was “a leader” and “cost effective”.

The council document also said results from the Australasian Local Government Performance Excellence Program identified the City as operating below industry levels for employee costs per 1000 residents and full time equivalent employees per 1000 residents.

Mr Jacob said the City should not “go down the road of consultants” unless something was clearly wrong.

“No one has argued tonight the City is going in the wrong direction,” he said.

“No one has put up a substantive argument why we should impose on ratepayers the equivalent of a 0.5 per cent rate increase, because that’s what these consultants would cost, for a fishing exercise that might deliver a whole lot of unworkable recommendations or just take us nowhere at all.”

“At the end of the day, the staff we have are here to implement the programs we as a council have decided on and in many cases, initiatives from around this table.

“If we want to cut things back we need to outline the programs we don’t wish to see going forward.”

The council voted 9-3 not to engage an external review, with Crs Poliwka, Chester and Christopher May voting against.