Townsville City Council policy to tighten overpayments to resigning executives

A new termination policy to prevent overpayments to departing Townsville City Council executives is claimed to be the first of its kind across Queensland.

Townsville City Council is looking at addressing overpayments in termination payments to its resigning executives, and will had a process to determine this if and when they choose to resign, whether that be CEO Joe McCabe or Infrastructure and operations director Matt Richardson. Picture: Shae Beplate.

A new termination policy to prevent overpayments to departing Townsville City Council executives is claimed to be the first of its kind across Queensland.

Councillors are likely to approve the policy next Wednesday in their final meeting of the year, in the aftermath of pressing for detail in how $2.6 million in termination payments were given out to employees within the past financial year.

The Queensland Audit Office had raised concerns about payments to three separate employees, which they believed was over and above their contracts.

It is understood ex-CEO Prins Ralston was one of the executives, who gave his resignation two days after the council was sworn in in April, but councillors including Suzy Batkovic said they were not privy to the details on who had signed off on these payments or the reasoning behind them.

Dr Ralston’s deed of separation was sought from the Townsville City Council, which could give clarity on who approved his termination bonuses, but the council would not supply it.

The investiture of newly elected Townsville City Councillors at the council chambers held in April. The then CEO Prins Ralston congratulates the newly sworn Mayor Troy Thompson, who is currently suspended for 12 months while Dr Prins announced his resignation two days after the photograph was taken. Picture: Evan Morgan

A council spokesman said employment contracts and deeds of separation were confidential.

“It would be inappropriate to disclose personal matters,” the spokesman said.

While speculated that newly sworn-in mayor Troy Thompson gave the authority for the over payments in April, it was a view he rejected, while also denying he had pushed Dr Ralston out of his role.

At his final council meeting before being suspended for 12 months on paid leave, Mr Thompson said that termination arrangements were part of a deed of separation that were “tightly locked up” because of the confidential figures involved.

The council’s new termination policy would not resolve the past overpayments, but would tackle an ambiguous area which its officers believed was an issue prevalent across Queensland’s local and state governments.

Councillor Suzy Batkovic raised concerns about overpayments to resigning council employees, an issue which was identified in an auditors report. Picture: Shae Beplate.

They claim the new proposed policy for the Townsville City Council is the first of its kind.

The council would seek external legal advice to determine the “appropriate range” for any negotiated settlement and would consider the total value of the contract, the risk of litigation, risks to the council’s reputation and the nature of any claims the executive officer might have in their termination.

The proposed policy said termination payments should follow contractual terms, and that additional payments should only be requested if put in writing, were supported by external legal advice and if other options to keep within what was contracted were attempted.

A recently created CEO performance review committee would have the authority to approve termination bonuses for Townsville CEO Joe McCabe and his successors, while payments to an executive officer would have to be approved by Mr McCabe as well as the director of business services.

Chief executive Joe McCabe alongside the mayor Troy Thompson at an ordinary council meeting. Picture: Shae Beplate.

If the current business services director Peter Cannizzaro was the one resigning, then it would be up to another director to make the decision in his stead.

“Payments should be reasonable and proportionate to the nature of the risk of any claim and its prospects, payments should not set a precedent for future claims, and payments should align with council’s budget and financial policies,” a council document said.

The council would also be looking at gaining more direct influence on council-owned assets by placing members on the boards of NQ Spark and North Railyards Developments.

QAO also identified a concern with having lack of direct oversight on these entities.

“Without requiring these entities to submit strategic plans, quarterly financial reports, or other performance updates, the council has limited visibility into how its investments of public money are being managed,” the auditors’ report said.

NQ Spark is partly owned by the council and was developing advanced simulation technology and would benefit training in regional science and defence, health and education.

The council would seek to fill two board positions on the board through the authority of the chief executive.

As for the North Railyards, the council’s officers recommend they appoint executive Nyree Bolton onto the board, who may take a salary in the position.

Mr McCabe’s first recorded advice for councillors was at his first council meeting in May when he was asked about holding special purpose companies such as North Railyards to account.

“You need to appoint the right directors and you need to constantly review their performance,” Mr McCabe said at the time.

“If you do the work upfront then they meander along and eventually you get to the point you don’t think they’re serving a purpose.

“If they’re not serving their purpose dissolve it and do it another way.”

Originally published as Townsville City Council policy to tighten overpayments to resigning executives