Former Byron Shire general manager Ken Gainger has been critcised for not seeking specific approval from councillors before continuing to defend, at great cost, the Butler Street bypass case that was brought by residents.
Prior to his departure, The Echo asked Mr Gainger, ‘Did the GM have the delegated authority to spend $450–$500,000 defending the Butler Street bypass case brought by residents without referring it to Council at the time he made that decision?’
Mr Gainger replied that ‘The delegated authority was provided by the council by resolution.’
He went on to say that the decision to defend the legal action was based on ‘a series of Council resolutions supporting a bypass constructed on the Butler Street alignment’ and that councillors had been kept up-to-date about the case and its ‘growing legal costs’.
However, it has now emerged that there was no specific delegated authority provided by councillors to pursue that case to that level of expenditure.
Council staff have confirmed that ‘With respect to legal proceedings for the Butler Street bypass, the general manager acted under general authority delegated by Council. There was not a separate delegated authority specifically for the Butler Street case.’
According to Council’s delegated authority document, the GM is able to spend up to $50,000 on commencing a case without seeking further Council approval.
When asked if the delegated authority to defend the Butler Street bypass court case was ‘implied,’ Mr James agreed.
He said the GM relied on a series of approvals and resolutions to commence proceedings.
They include Council’s approval of the development application, resolutions to progress with the bypass and the setting aside of land for biobanking. This allowed Council to run the case without a specific delegation from Council, according to Council’s legal services co-ordinator Ralph James.
However, Cr Cate Coorey pointed out the ongoing Butler Street legal costs, contained within the Legal Services Status (LSS) report, were ‘listed at the bottom of the memos’ below a long list of other legal proceedings, such as parking infringements.
‘I understand that we didn’t have a choice, but given the level of public interest in this case and the escalating costs, councillors should have been more actively informed,’ Cr Coorey said.
Lost in memos
‘The $469,000 – the final cost [for the bypass case] – is on page 7 of the 22 June LSS report. There was no mention of mounting costs on the Butler Street issue spoken of to councillors.’
Local activist Fast Buck$ says that prior to the new delegation of powers signed off in November 2017, the GM did not have delegated authority to pursue the Butler Street case without specific consent from councillors.
But Council’s legal services co-ordinator Ralph James disputes this view. ‘Council had resolved twice to progress with the preferred bypass route along Butler Street,’ Mr James said.
‘The general manager and staff at his direction were obliged to implement Council’s resolutions.’
For former Byron Shire mayor Jan Barham, the runaway costs are a salient reminder of the days of former general manager Max Eastcott, who was accused of using delegated powers to approve environmentally damaging developments and mismanage developer contributions in such a way that they led to Council being significantly short of funds.
‘Delegation of powers is one of the most crucial things that a council does,’ said Ms Barham.
‘It determines what the GM can do, depending on how the delegation and subsequent resolutions are defined.
‘What we learnt in relation to good governance was how a rogue GM can run their own agenda if they are given delegated powers.
‘That is why we were so careful with the wording of our delegated powers and put in place triggers in resolutions that would require staff to report back to Council.
‘For example, when the costs of a court case reached a particular figure.
‘What the current council need to understand is the relationship between the Local Government Act, councillors, staff and the community.
‘The councillors in fact don’t have a huge amount of power and once they have delegated the authority away, the staff are able to legally do whatever they like.’
Ms Barham continued, ‘Councillors prior to 2012 operated with a greater degree of transparency and a focus on legal matters.’
‘A high level of reporting on the progression of cases was a priority so the elected body could make informed decisions about proceeding and expenditure.’
A spokesperson for the NSW Office of Local Government told The Echo, ‘Ultimately the question of whether a general manager is able to exercise a function of a council under a delegation by the council will depend on the terms and scope of the delegation made by the council.’
‘If there is a concern by a council that a general manager has exceeded their delegations, this would be a matter for the council to address through the performance management mechanisms under the general manager’s contract of employment.’
Mayor Simon Richardson and councillors Paul Spooner and Michael Lyons did not respond to questions from The Echo by deadline.
Last November, The Echo reported that staff had commenced proceedings against Butler Street residents, claiming costs. Both mayor Simon Richardson (Greens) and Cr Paul Spooner (Labor) confirmed at the time that they were not informed of staff’s request to the courts for the personal information of the residents’ group.
Butler Street Community Network president Paul Jones said at the time Council were ‘literally tearing up ratepayers’ money with no hope of recovery in an exercise to discourage and destroy the community’s voice.’