Staff costs blow out by $500m and take bigger share of councils’ spending

THE cost of council workforces across Melbourne and Geelong have blown out by more than $500 million in the past five years, a Sunday Herald Sun analysis has found.

An investigation found staff expenditure now accounts for almost 44 per cent of the money councils have to spend on services to the community.

THE cost of council workforces across Melbourne and Geelong have blown out by more than $500 million in the past five years.

A Sunday Herald Sun analysis of the draft budgets of 31 councils found ratepayers will pay $2.5 billion on council workers in the coming financial year, a 25 per cent increase from almost $2 billion in 2013-14.

The investigation found that staff expenditure now accounts for almost 44 per cent of the money councils have to spend on services to the community.

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Ratepayers Victoria spokesman Frank Sullivan said council spending was “out of control” and called for independent financial monitors to check budgets and provide accountability.

“So much of councils’ budgets are used on salaries and outside of that there are contractors who do work so there’s even more.’’

Metro council spending breakdown.

Inner-north council Moonee Valley expects to spend $84 million — or 55 per cent of its budget — on its 861 staff next financial year, jumping from $55.4 million just five years ago.

Five Moonee Valley executives earn more than $190,000 a year with one on almost $400,000.

And in neighbouring Moreland, 51.8 per cent of its $175 million budget will go on wages.

More than 50 council officers earn equivalent to — or more than — Premier Daniel Andrews.

The highest paid official, Melbourne CEO Ben Rimmer, receives between $460,000-$469,999 in wages each year — almost $200,000 more than Mr Andrews whose salary comes in at $290,000.

Other top earners include chief executives at Boroondara, Greater Dandenong and Mornington Peninsula councils who earn up to $390,000 each a year.

The rising cost of staff has been caused by population growth, higher executive salaries and new workplace agreements, causing a strain on resources and services for parks, roads and rubbish collection.

Geelong and Wyndham have biggest workforces — 1635 and 1340 full-time equivalent staff respectively — but have bigger budgets because of their populations of more than 225,000.

Cardinia and Melton councils ran the leanest workforces spending about a third on their staff.

Moonee Valley acting chief executive Steven Lambert said the increase in staff expenditure in the past five years was because of pay rises, extra child care workers as well as catering for more residents.

“Enterprise bargaining agreement increases during this time also account for approximately $12.4 million of the increase,’’ Mr Lambert said.

Municipal Association of Victoria chief executive Rob Spence said population growth had led to increased demand for services while the variation in staff levels was because some councils contracted out more services leading to lower staff costs.

And wages were not necessarily rising, Mr Spence said.

“We know that the general wage rate movements in the sector are dropping,’’ he said.

Local Government Minister Marlene Kairouz said rate capping was helping to rein in costs to ratepayers.

“Councils needed to prioritise their communities when they’re spending ratepayers’ money,” Ms Kairouz said.

The investigation included the City of Geelong and 30 metropolitan Melbourne councils.

The City of Melbourne will announce its draft budget on Tuesday May 15.

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TOP FIVE SPENDERS ON STAFF (% of total expenditure):

Moonee Valley 54%

Moreland 51.8%

Darebin 49.7%

Hobsons Bay 48.5%

Hume 47.7%

LOWEST FIVE SPENDERS ON STAFF (% of total expenditure):

Nillumbik 39.7%

Casey 39.5%

Mornington Peninsula 35.9%

Melton 34.3%

Cardinia 31.3%

A local government minister says councils need to prioritise communities when spending council money.

Wages chewing up to 70 per cent of councils’ revenue, says report

WAGE bills are accounting for up to 70 per cent of the revenue of some big councils, a new report says.

The national report by financial consultants Aon Risk Solutions said that salaries negotiated through EBAs were rising faster than council income in an environment where rates were capped by state governments.

“While council revenues in some states are increasing by only two per cent, wages bills are rising by as much as 3.5 per cent,” it said.

“Councils feel they are going backward.”

The report said councils were under pressure to “do more with less” as they grappled with the need to renew assets and provide new infrastructure.

“Ratepayers expect better services, more services — but they aren’t so keen on more rates to pay for them,” said the 2018 Risk Report: A Focus on Australian Local Government.

“The resulting pressure on staff adds to stress, impacts wellbeing and affects employee engagement. It’s a vicious cycle.”

The report highlighted councils including Melbourne and Geelong as examples of high profile municipalities with their reputations under fire.

Melbourne has suffered due to the sexual harassment scandal which engulfed former lord mayor Robert Doyle, while Geelong was sacked by the Andrews Government in 2016 amid claims it was dysfunctional.

“Local government faces the challenge of managing and moderating the behaviour and decision making, not just of employees, but also elected members,” the report said.

“Social media makes councils porous with information leaks a daily risk. Councils’

and officers’ insurance premiums rise as insurers get jittery.”

Aon said that many councils were missing the chance to take simple steps to reduce human risks as concern rose over health and safety, cyber attack, reputation and human resources issues.

“Councils are clear about how they rank risks — but when it comes to managing them not all councils are investing in the best practice strategies and processes that promise greatest protection,” the report said.

“Forward thinking councils engage in effective data-backed risk profiling, gap analysis and loss limiting.”

Frustrated Cheltenham resident Scott West went to war with his council when he was ordered to remove spiky yakka plants from his nature strip.

The 59-year-old labelled the saga as “bureaucracy gone mad” and demanded to know why council workers were lining their pockets with wage rises rather than addressing “real issues” facing the community.

“(Council workers) absolutely do not deserve more money,” he said. “They’re supposed to be community minded but they’re the furthest thing from it.”

Mr West said he would prefer to see funds contributed to infrastructure in the area and solving the waste collection issue which would see removal rates increased.

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@JMasanauskas