BIG READ: How ratepayers bore Mayor’s $15k insurance bill
IT WAS a warm, hazy November morning, and up until that point inside the Toowoomba Regional Council chambers, the month’s ordinary meeting had been uneventful.
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IT WAS a warm, hazy November morning, and up until that point inside the Toowoomba Regional Council chambers, the month's ordinary meeting had been uneventful.
Councillor Bill Cahill rose to speak on a report on an insurance and indemnity policy for councillors, described by council staff as a "bureaucratic oversight".
The council had procured directors and officers insurance for many years for councillors and staff when there was no formal policy in place to do so for councillors.
Adopting the policy would rectify the situation.
Because it was designed to be retrospective, it would also formalise an earlier insurance claim by Mayor Paul Antonio, who was found to have engaged in misconduct over his Inland Rail dealings by a local government tribunal in November 2018.
At the time, Cr Antonio was fined $15,000 over three counts of misconduct stemming from his admission on national television he personally funded the design of an alternative Inland Rail route that ran along the border of his Captains Mountain quarry, and gave copies of the route to Groom MP Dr John McVeigh and Queensland Resources Council CEO Ian Macfarlane.
Cr Antonio has always denied he did anything wrong, and that in procuring the map he was working to "lessen the impact of the rail line on a constituent's land".
He later claimed that he was denied procedural fairness in the hearing process, making the findings of the panel "fundamentally flawed".
In February 2019 Cr Antonio said he would not appeal the panel's finding.
Council documents show insurers agreed to cover Cr Antonio's defence costs, which totalled $30,675 as well as his fine of $15,000.
The documents also showed the council paid Cr Antonio's $15,000 insurance excess, despite there being no policy in place at the time to do so.
Subsequent approaches to Toowoomba Regional Council from other councillors facing misconduct allegations alerted staff to the fact there was a policy vacuum.
The amendment
On the morning of the November 19 meeting, Cr Cahill circulated an amendment to the insurance and indemnity policy.
His amendment stated that any councillor or officer who was found to have engaged in misconduct, inappropriate conduct, or corrupt conduct, would have to pay back any costs incurred by the council.
It replaced a clause that said the council "may" require covered persons to reimburse the council for any excess it paid, if an insurer chose not to indemnify that person.
Cr Cahill's amendment meant Cr Antonio would have to pay the $15,000 excess, given the policy applied retrospectively.
While Cr Cahill said it was right for the council to have an insurance policy to help councillors and staff defend themselves, he queried whether it was appropriate to have insurance to cover councillors when complaints were substantiated against them and they were found to have acted inappropriately.
Cr Antonio called for speakers against Cr Cahill's amended motion.
The councillors remained silent.
"Well, I guess there's no need to sum up," Cr Antonio observed.
Putting the amendment to a vote, only two other councillors sided with Cr Cahill - Crs Megan O'Hara Sullivan and James O'Shea.
Councillors Chris Tait, Anne Glasheen, Mike Williams, Joe Ramia, Nancy Sommerfield, Geoff McDonald, and Paul Antonio voted against the amendment.
Cr Carol Taylor was not at the meeting.
Another vote saw the original policy, as set out by the council's legal department, adopted.
The Mayor responds
When Cr Antonio was phoned for comment on this story, he initially mistakenly said the insurance company had paid for his excess.
He later emailed through a statement saying the council's insurance policies were consistent with other local government organisations.
"Councillors and employees have a legitimate expectation, when embarking upon civic life, that they will be insured in respect of that which is done by them in the discharge of their civic duties," the statement said.
"The arrangement between the council and its insurer concerning the payment of any deductible is a commercial matter for negotiation between those parties.
"The council has sought to procure cost-effective and comprehensive insurance cover for its councillors and employees. On this occasion I voted with the other members of the council to ensure Councillors Expenses Reimbursement and Provision of Facilities policy aligned with council's longstanding Directors and Officers insurance policy."
Cr Antonio said in his statement the insurance and indemnity policy adopted at the November ordinary council meeting made provision for the council to ask a councillor to repay the excess if the insurer decided not to indemnify.
"In my case, the insurer did not advise that it would elect to deny liability," he said.
"The Insurance and Indemnity for Councillors and Employees Policy adopted by the majority of councillors is a reasonable balanced position and the alternative motion proposed was obviously not perceived by the majority as either necessary or reasonable to protect staff and elected officials."
Cr Antonio added he "had no interaction whatsoever with anybody from the insurance industry in regard to this".
Councillors' views
The Chronicle approached each councillor who voted on the policy in the November meeting.
Cr O'Hara Sullivan said she was uncomfortable with the lack of debate over Cr Cahill's alternative motion.
She had wanted to speak during the meeting, but council protocol prevented her, as no one had spoken against the amendment.
"I genuinely would like to hear the other side of the debate," she said.
"We're elected to behave a certain way and a certain standard of behaviour is expected of us. So if you get a finding from the CCC or the integrity commissioner of misconduct, why should the ratepayer be potentially paying for us to behave that way?
"They're not paying for us to behave that way but they're paying for us to have insurance that covers that … so the insurance agency would be building into its premium the fact they may, at their discretion, be covering people's fines. I think that's pretty outrageous."
Cr O'Shea, who also voted for Cr Cahill's motion, said he felt that if a councillor or officer was found guilty of something, "it's on the individual to wear the cost of that rather than it being in the hands of any sort of insurance agency".
When asked what he thought of the council wearing the cost of Cr Antonio's insurance excess, he said he was "not going to comment on that at all".
Cr Sommerfield said she voted for the policy because "all boards with good governance should have it".
"When first elected in 2012, I asked the question of the CEO of the day if we had it. He said yes. We now discover there had been oversight and councillors weren't insured," she said.
"In relation to the suggestion that those found guilty should pay it back, that is what insurance is for.
"The insurance company has the right to decide if it will pay out the insurance and that is where the governance should lay."
When asked what she thought of Cr Antonio's excess being covered by the ratepayer as a result of the amendment being rejected, Cr Sommerfield said: "It wasn't retrospective was it?"
When informed it was, she said: "No comment".
Cr Glasheen said she voted against Cr Cahill's amendment because "sometimes you just need to go with the straightforward exercise without muddying the waters".
"We just wanted to make sure what we had always done and put it in the policy. We didn't need to change anything else about it," she said.
When it was put to her that one of the outcomes of the policy meant ratepayers would foot the bill for Cr Antonio's insurance excess, Cr Glasheen said she was "not going to comment on that".
Cr Tait and Cr Ramia did not respond to requests for comment.
Cr McDonald said there were "grey areas" in all levels of the law, which the adopted policy covered.
"Directors and officers insurance is there for a reason. The reason it's there is so that people can make a decision on the behalf of their community to the best of their abilities," he said.
"If people don't have that level of insurance, you probably won't get people to put their hand up for these sorts of roles."
Cr Williams said the difficulty of the policy was that it didn't just apply to councillors - but to staff as well.
He said he voted against Cr Cahill's amendment because he could not put people in a situation "where they have acted in good faith, and not provide insurance".
"If (staff) have inadvertently done something incorrect, we cannot expose staff to that risk. Then it comes down to it being at the discretion of the insurance company whether to indemnify," he said.
Cr Williams said councillors weren't briefed on the particular implications of the policy, "neither should they have been".
"Good policy should be a broadbrush approach to what is right," he said.
"Different outcomes will fall out of that and you will have to accept the consequences of the decisions you make.
"I firmly believe we go the right policy. What we've put in place leaves it squarely in the position of insurers to determine."