Townsville City Council’s termination benefit amounts identified as concerning by Queensland Audit Office

An audit of Townsville City Council’s termination payments has found staff received payouts exceeding their contracts, including three executives who resigned after Mayor Troy Thompson was sworn in.

Townsville City Council’s former chief executive Prins Ralston congratulates the newly sworn-in mayor Troy Thompson. Two days later, Dr Ralston announces his resignation. Picture: Evan Morgan

While ratepayers were hit with a rate rise, Townsville City Council paid $2.6 million in golden handshakes last year with an auditors report revealing some high-level executives were paid “over and above” what was in their contracts.

The Queensland Audit Office has reported several areas of concern in its financial management report which will be tabled in Wednesday’s council meeting, including the amount given in termination benefits.

It found two senior executives as well as another employee received termination benefits the QAO describes “over and above” what they were contracted to receive, while also raising concern about lack of direct oversight of its entities such as NQ Spark and the North Railyards Developments.

While it is understood the $2.65m in the past financial year is spread across all termination benefits in the council, the amount is more than an 1100 per cent increase compared to the previous year’s total of just $215,000.

And it was an issue of concern outlined in the QAO’s financial management report which will be tabled in Wednesday’s meeting and would also be included in a parliamentary report.

“The final settlement amounts negotiated with these employees were documented within individual deeds of separation,” the report said.

“Whilst the format of council’s standard deed of separation is based on internal and external legal advice, council does not have a policy or guidance stating when it is appropriate to enter into negotiations to make payments over and above those contained in employment contracts.”

A Townsville City Council spokeswoman said there were four executives who had left the council in the past financial year, three of whom resigned less than two months after the new council led by Mayor Troy Thompson was sworn in.

Ex-chief executive Prins Ralston at a Townsville City Council meeting. Picture: Shae Beplate.

Chief executive Prins Ralston finished at the council on May 10, and within the same month the chief financial officer Julie Hilder and the infrastructure and operations director Seren McKenzie also resigned.

The director of business services resigned in July last year.

Councillors indicated they had little to no detail on the agreements made and were concerned about the lack of policy that could have prevented it.

Division 7 councillor Kurt Rehbein said a report of ‘golden handshakes’ left unanswered questions for the community, such as what payments were made, who received them and why they were “over and above”.

“We knew that there was, obviously, there’s been a number of executives leave this term … but it’s shocking to read that there was a large amount of ratepayers money used in that process,” Mr Rehbein said.

“So certainly it’s something I’ll be asking through the organisation for a briefing on that.”

Division 8 councillor Andrew Robinson said he had been advised by council staff there would be policies put in place to stop the risk of overpayments.

“Already for our policies going forward we have looked at things to tighten them up and to... carry out the recommendations from the Queensland Audit Office,” Mr Robinson said.

“And that’s where we’re focusing on is in looking forward, not backwards, if that makes sense.”

Mayor Troy Thompson chairs a Townsville City Council meeting. Picture: Shae Beplate.

Two days after Mr Thompson and his council was sworn in in April, Dr Ralston announced his resignation.

The mayor said at the time this was part of a clean sweep within the executive team under his new direction, and that they had two different views of council operations.

Since the adoption of the council budget, councillors have indicated the council’s finances were under strain as they justified further ways of funding its operations without burdening their ratepayers further.

They unanimously supported an average 5.1 per cent rate rise while also doubling parking fees to $2 an hour.

They also considered a controversial paid parking meter rollout to expand beyond the central business district, including at The Strand in North Ward, but backed down after strong objection from the community.

The QAO’s financial management report also indicated concern for entities NQ Spark, partly owned by the council, and council-owned North Railyards development, because there was no direct council representatives on their boards.

“While direct board representation may not always be necessary, it is critical that council has a process in place to hold these controlled entities accountable,” the report said.

“However, council currently does not require the boards of these entities to present their strategic plans, quarterly financial reports, or other key performance updates.

“Given that public money has been invested in these entities, this lack of structured oversight increases the level of risk.”

Following the release of the annual report, Mr Thompson expressed concerns about the council’s financial performance and said he had spoken with the Queensland Audit Office.

But his concerns were directed at the completion rate of projects rather than in the termination benefits.

“The annual report that we just saw in council now, year on year, is very good, and it’s getting better, and it’s presented well,” Mr Thompson said.

“My concerns are around the things that people don’t see, and that is, if we finish 50 projects a year, and we’ve got 2000 on our books, does that mean we don’t finish those projects for 40 years?

“That’s a general concern that ratepayers have with me often around when are going to finish projects?”

Originally published as Townsville City Council’s termination benefit amounts identified as concerning by Queensland Audit Office