Hobsons Bay City Council defends awarding raise to chief executive Aaron van Egmond after six month absence

A council chief executive pocketed a generous pay rise and contract extension the year after a six-month absence, which has been slammed by the head of a local government watchdog.

Residents have questioned why Hobsons Bay Council chief executive Aaron van Egmond received a sizeable increase to his salary despite missing six months of the year prior to his performance review.

A council chief executive — who was at the centre of an integrity probe at his former job — received a pay rise of at least $20,000 shortly after returning from six months leave, with the head of a local government watchdog slamming the move.

Financial documents from Hobsons Bay City Council revealed chief executive Aaron van Egmond earned at least $390,000 last financial year.

The new remuneration package comes just one year after the chief executive took six months off with a combination of long service leave and unpaid leave, according to the council.

Mr van Egmond was paid between $360,000 – $370,000 in 2020/21 before his remuneration was reduced the following year due to his long-term absence.

The council confirmed to the Herald Sun last week that the chief executive earned between $290,000 and $300,000 during the 2021/22 financial year.

The chief executive’s request for six months’ leave from January to July of 2022 was approved by the council a month prior.

Mr van Egmond’s term with Hobsons Bay was extended for five years following a performance review in December, just months after returning from leave.

Three Hobsons Bay directors shared the role of acting chief executive during that period.

Mr van Egmond joined Hobsons Bay in 2018 after he resigned from his post as chief executive at Hepburn Shire Council.

Controversy followed his departure from Hepburn after the Local Government Inspectorate (LGI) conducted an audit in 2019, and the council an internal review, following the council’s purchase of the Daylesford Rex Theatre in mid-2016 on the advice of the then-chief executive.

The project sought to transform the $6.34m purchase of the theatre into The Hepburn Hub at The Rex, which would house council services and staff.

The state government’s integrity agency launched the investigation into the council’s decision to purchase the building and its management amid cost blowouts.

The LGI report — which was being finalised last year — has not been made public despite this masthead seeing evidence of FOI applications.

An LGI spokeswoman said the inspectorate was unable to share any information at this time.

Hepburn spent an estimated $3m on the project before works were suspended in 2018.

The building was sold last year for $3.75m.

A Hobsons Bay Council spokeswoman said Mr van Egmond received a long-term extension last year which indicated their satisfaction with his performance.

The spokeswoman said the chief executive’s performance appraisal and KPIs were set in accordance with the requirements of the Local Government Act 2020 to provide a fair, transparent and consistent framework in all matters relating to the chief executive.

She said the chief executive Employment and Remuneration Committee — made up of councillors and an independent chair — conducted an annual formal review of the chief executive performance against the performance plan and then submits a report with recommendations including whether the chief executive had met the KPIs, whether KPIs should be varied, and whether the remuneration package should be varied.

“Because the CEO took an extended period of long service leave and unpaid leave during FY 2021/22 the total remuneration package for the CEO is reflective of this, hence the difference between the total remuneration package in 2021/22 and 2022/23,” the spokeswoman said.

The Herald Sun asked both Mr van Egmond and the council why he took six months’ leave but neither responded.

Council Watch president Dean Hurlston said the pay rise comes amid high staff turnover and rising community dissatisfaction.

The most recent Annual Report from Hobsons Bay revealed the council’s annual staff turnover in previous years peaked in 2022 with 25.8 per cent of permanent staff being sacked or resigning.

Other recent turnover figures were 15.3 per cent (2020), 16.1 per cent (2021), and 18.1 per cent (2023).

The report said turnover figures had returned to “pre-covid rates” and explained the 2022 increase was associated with the end of short-term contracts linked to the Work for Victoria program and that Hobsons Bay’s turnover was “consistent” with statewide trends.

According to the turnover figures of other Melbourne councils, Hobsons Bay lost more staff in 2022 than the City of Melbourne (15.2 per cent), Frankston (18.2 per cetn), Stonnington (18.3 per cent) Port Phillip (20 per cent) and Melton (21 per cent).

“Hobsons Bay is out of control,” Mr Hurlston said.

Hobsons Bay’s most recent Community Satisfaction Survey result gave the council an overall score of 61 out of 100 — the metropolitan average is 62.

This score reflected a three per cent drop from the previous year, the same decline as the year prior.

“We have residents being threatened with eviction and the community have been repeatedly locked out of public meetings, has this council actually lost the plot,” Mr Hurlston asked.

“How did the council ever think this could pass the pub test?”

Altona resident Kaylene O’Shea said she was shocked to learn the council had boosted the chief executive's salary at a time when her community felt the council was not fulfilling its primary obligations.

“We were appalled, frankly, our rates have gone up significantly, services have gone down, and yet one person is receiving a large sum of money,” Ms O’Shea said.

“I don’t begrudge people earning large salaries if they’re running an organisation well and delivering services they are expected to, but I just don’t see it.

“The CEO was away almost half the year before the performance review so I’m unsure what the key performance indicators were that resulted in that, especially when community satisfaction is slipping year-on-year.

“It makes a mockery of having an appraisal process at all if you’re rewarded for declining results.”