• Serena O'Meley

Maladministration and Darebin Council - the continuing story of Clements Reserve - 2018-2021

Updated: May 26



Contents

  • Background

  • Avoidable delays and poor implementation

  • Incorrect valuation instructions

  • The current state of negotiations

  • Maladministration

  • Chronology


The question which I have set out to answer is why, since 2015, has Darebin Council been unable to secure land at Clements Reserve, Reservoir, despite a substantial amount of effort directed to that end? I will show that there have been a series of avoidable delays, failure to properly grasp the State Government's land disposal process, and lack of tracking and implementation of decisions that, taken together, rise to the level of maladministration. I trust that the findings in this case study will lead to reflection within Darebin Council followed by change in its work practices.


Background


In 2015 Clements Reserve was one of several parcels of land that were offered for sale to Darebin Council (2012-2016) by the Victorian Government. It was not acquired at the time because the then majority on Council pursued a failed strategy to get such land gifted by the State Government, and because the McMahon Road portion of the land within Clements Reserve was described in a Council report as being of 'no strategic value' despite its location next to Darebin Creek. Some of this history has been documented in my article titled, Decisive action is needed by Darebin Council to protect Clements Reserve (January 2019) which drew on the minutes of Council meetings between 2015-2018.


I have now been able to dig deeper into the story through an analysis of many dozens of documents obtained under a Freedom of Information (FOI) request. The next instalment picks up the narrative from the end of 2018. A summary of the correspondence, with additional commentary, is set out in a longer chronology at the end.


Avoidable delays and poor implementation


For three years, there was no further discussion about Clements Reserve in Darebin Council until an officer from the Department of Transport initiated contact in July 2018. This eventually prompted internal discussion.


On 17 September 2018, a Council officer explained in an email to a colleague why McMahon Road had come to be regarded as strategically important. In 2015 land had been ranked for acquisition to fill gaps in the open space network and McMahon Road was not located where there was such a gap. This strategic assessment changed under the stewardship of the 2016-2020 Darebin Council because it had an, "...increased focus on biodiversity and increasing open space not just for recreational use but also for habitat preservation/recreation."


Thus, on 15 October 2018, it was resolved to seek the transfer of 1-11 McMahon Road from the State Government at a cost of up to $140,000.


Ministerial approval was sought by the Department of Transport and granted for a diminished (i.e. discounted) sale in early 2019. At this point it looked like the matter would be resolved and that the settlement would also include two landlocked parcels of land at the rear of Clements Grove. A joint valuation was sought from the Valuer General for the purpose of negotiations.

Arial view of Clements Reserve and the land which is for sale - Source 15 October 2015 - Item 806, Appendix A

Unfortunately, the rest of 2019 was lost to entirely avoidable delays that appear to be due to lack of oversight of a single officer within Darebin Council. This staff member states in emails that they had no cover while they were on several periods of leave or when they were acting in another role. There is no evidence on file that they tried to initiate a handover of the project to anyone else, or that any supervisor sought a report on their progress with negotiations. If such a discussion took place in staff meetings it is not evident in any of the FOI documents. However, this is not just the responsibility of a single individual; it is the collective responsibility of their department.


The State Government follows a strict protocol when dealing with land transfers that requires an up-to-date Valuer General valuation prior to formal negotiations on price. The FOI file shows repeated pleas from an officer within the Department of Transport to progress the matter otherwise the valuation would lapse. The officer followed up diligently by email and telephone but perhaps should have tried to escalate the matter to a Departmental Head when the Council officer was unresponsive. The Department of Transport officer continued to follow up with the Council officer even after the valuation lapsed on 25 December 2019.


I don't know how much it costs to get such a valuation done but based upon the extent of the documentation that had to be prepared it is probably not cheap. The cost would have been shared by the Department of Transport and Darebin Council.


The matter came to the attention of a team leader on 23 July 2020, triggered by my questions to Council a few days earlier. Clearly disturbed by the lack of follow up on the acquisition of Clements Reserve, the team leader sought to institute a new requirement for tracking the progress of all matters that come before Darebin Council. I am not convinced that the system has been implemented by staff given continued evidence of lack of follow up. An officer tasked with trying to reconstruct what had happen aptly described their efforts in an email on 23 July 2020 as trying to reconstruct a 'jigsaw'.


Even with my constant reminders it took over 6 weeks to get an answer to my questions about lack of action to acquire the land dating back to 2018, failure to receive a report about the matter in the first quarter of 2020 as expected, and the significant valuation discrepancies which came to light during the budget process.


Incorrect valuation instructions


Before Darebin Council can make an offer on a purchase of land it must also obtain its own valuation so that it has a starting point for negotiations with the State Government. It does this through the services of an external consultancy. There are several points at which this valuation was botched.


Back in 2015 an Associate from the consultancy was asked to give what amounts to a ball-park estimate of the value of the land. The valuation came in at around $95,000 for all three parcels based upon its use as parkland. I used this valuation from a report in the 5 October 2015 Council meeting as a basis for my submission to the 2020 Council Budget process requesting that the land be bought.


In June 2020, the Associate appears angry in correspondence with Council that they were not provided with adequate instructions about the purpose of their 2015 valuation. Had they been properly instructed they would have split the valuation into three parts and undertaken a full market valuation rather than an open space valuation. The two parcels of land at Clements Grove are landlocked within the park whereas the McMahon Road portion has street frontage and would thus be significantly more valuable on the open market.


I expect that the McMahon Road portion should have been valued using a General Residential zoning. Why? Because the State Government land disposal process requires valuations that are based upon the 'highest and best use'. It is only after the market value of the land is determined that any discount is applied. In exchange for such a discount, Council would then agree to public-use restrictions upon the land. This eliminates the possibility of Council selling the land at a profit down the track and pocketing the difference at the State Government's expense. There is evidence on file that officers within Council were not familiar with this process which may explain why the Associate was incorrectly instructed.


The current state of negotiations


So how much is Clements Reserve really worth? According to a report provided to Councillors for the 7 September 2020 meeting the new valuation undertaken by Council's valuers came in at $1.18 million whereas the Department of Transport said it would consider an offer of $1.97 million (plus GST). (It is not clear from the report whether the Department of Transport offer is inclusive of any discount.)


In other words, the original 2015 valuation of $95,000 of the three parcels of land is wildly wrong for its purpose; the true value is between 10-20 times higher! No wonder the Associate was not happy about being incorrectly briefed. The discrepancy in value is embarrassing and the chronology below shows in grim detail just how confused at least one Council officer was in relation to the valuation process the second time round. By 7 July 2020, the Associate had provided Council with a new valuation that they were comfortable reflected the correct value of the land for the purpose of negotiations.


The matter came back to Council on 7 September 2020 and councillors voted unanimously to empower the CEO to commence negotiations to acquire the land. This resolution was intended to be actioned before the Council went into its caretaker period. It was not. Neither of two letters drafted on behalf of the Mayor, Cr Susan Rennie were sent to Planning Minister, Richard Wynne.


A letter seeking the Planning Minister's assistance to secure the land was instead sent by current Mayor, Cr Messina, on 14 December 2020. It does not appear that other politicians, whose assistance was supposed to be sought to help with negotiations, received any correspondence. After I queried the matter on 21 March 2021 with questions to Council a letter was hastily despatched to the Member for Preston, Hon. Robin Scott, MP on 31 March 2021 - over six months after it was due! Why our elected councillors thought that six politicians needed to be involved in negotiations on the sale is baffling. One or two would surely be enough to get help with movement on the price.


Anyway, there should be ample funds in the Public Open Space Reserve to purchase the land (around $18million dollars when I inquired in mid 2020), the Department of Transport was eager to sell, and the Planning Minister had already agreed to a diminished sale. The fact is that all the delays and obstruction have been on Darebin Council's side not on the side of the State Government. As one Council officer aptly noted on 2 July 2020, "It seems like it may simply be a case of purchase it, or lose it."


You would think that we would now be at a point, in April 2021, where the parties can negotiate around the true market value of the land, followed by the application of the public open space discount. Yet there is a further, strange hold up in the acquisition. According to a response to my 21 March 2021 questions, Council is now seeking 'town planning' advice from VicRoads relating to the site and thus has not yet sought another joint Valuer General valuation. I will be asking further questions at the next meeting about why town planning advice would unexpectedly be required. To me it looks like a further unnecessary delay.


Had the land been acquired in 2020 it may have been worth less due to the initial impact of the pandemic. Now, with skyrocketing prices for real estate across the country, its value will again be inflated. On McMahon Road, directly across from the park, a free-standing single story brick veneer home on a 701 m2 block sold for $1.278 million dollars on 17 April 2021. The amount of State Government land for sale in Clements Reserve is 3,962 m2 fronting McMahon Road, and 5,747 m2 in the two landlocked parcels behind Clements Grove. This puts the Government's offer on price into some context.


Maladministration


It's genuinely difficult to understand how such a cascade of mishaps could happen in respect of the acquisition of three small parcels of land that sit within an existing Darebin Council park.


The debacle has dragged on for 6 years and, so far, three elected Councils have failed to secure the land for the community. We elect councillors to oversight such matters yet, overall, they have been reactive to community concerns rather than proactively ensuring that their own resolutions have been implemented.


Within the Council bureaucracy, this case study shows confused lines of accountability, lack of understanding of the State Government land disposal process, and failure to adequately track and implement the decisions of elected councillors.


Clements Reserve is just one in a series of State Government land offers dating back to a single Council meeting on 5 October 2015 where, in the face of similar mistakes, parcels of land with environmental and/or community significance were only acquired due to sustained lobbying by the community, (e.g. the former Ruthven Primary School, the former Lakeside Primary School) or lost despite such lobbying (e.g. the Dumbarton Grasslands).


How many other costs have been incurred by Darebin Council due to instances of maladministration that have not been subjected to this kind of scrutiny? How much time, energy and effort is being wasted in failing to deliver upon Council's objectives?


It's well past time for an internal review of Council's processes.


___________________________________________________________________________


CHRONOLOGY


  • Darebin Council seeks to acquire Clements for a second time - August 2018

  • VicRoads writes to Council offering to facilitate the land transaction - January 2019

  • Valuation Request and Ministerial approval for a diminished sale - April 2019

  • Offer of sale met with repeated delays by Darebin Council - October 2019

  • Valuation discrepancies and the allegedly poor instructions to Council's valuer - June 2020

  • Budget submission - Serena O'Meley - and internal investigation - June 2020

  • Another attempt to secure Clements Reserve - September 2020

  • Still no progress on the purchase of Clements Reserve - March 2021



The following is a long read of the sources which I have relied upon to develop my narrative.


[August 2018]

Council seeks to acquire Clements for a second time


On 21 August 2018, Mayor Kim Le Cerf, wrote to Minister for Planning Hon. Richard Wynne to advise that the Council had an 'in principle interest' in the land at 1-11 McMahon Road, Reservoir as open space. She noted that strategic investigations were underway and that the matter would come before Council at its ordinary meeting on 15 October 2018. The purpose of the letter was to request that a decision regarding any planning pathway be deferred until then. The extension would be granted by the Minister in a letter dated 13 September 2018.


On 17 September 2018, a Council officer explained the strategic importance of the land to a colleague as follows:


"The major change is the current increased focus on biodiversity and increasing open space not just for recreational use but for habitat preservation/creation. In 2015, Council's directive and commitment towards increasing biodiversity values was not as strongly pronounced as it currently is with the current Council Plan, establishment of the Darebin Nature Trust and establishment of Climate Emergency Darebin. This commitment comes with access to increased funds associated with the Darebin Nature Trust and the directive of the Nature Trust to acquire land for conservation and biodiversity.


In 2015, one of the key considerations in ranking parcels of land for acquisition was to fill gaps in the open space network - in this case a proximity based assessment of residents having access to open space within 500m of their homes. The parcel of land at 1-11 McMahon Rd Reservoir was not a high priority strategically in 2015 as it was not located in an area where there as a gap in the provision of open space.


While this remains true, the focus on biodiversity increases the strategic importance of this parcel as it is within 100m of the Darebin Creek making it an important part of an integrated corridor of land along the Darebin Creek. Darebin's creek corridors are key hubs for habitat, biodiversity and passive recreation and securing land in a continuous corridor along the creeks becomes more important."


On 2 October 2018, an officer within Strategic Asset Management requested a standalone valuation for 1-11 McMahon Street (sic), Reservoir because they were going on annual leave the next day and it was needed for a Council report.


A Certificate of Valuation Estimate for 11 McMahon Avenue was received from the Associate on 3 October 2018. This valuation was not provided with the FOI documents as it is confidential. However, it is likely to be $140,000 or less as reflected in the negotiating cap set out in this resolution from 15 October 2018 Darebin Council meeting:




The Mayor, Cr Kim Le Cerf, wrote to the Minister on 16 October 2018 outlining the key points of the resolution and requesting first right of refusal for any future negotiations in relation to the land.


[January 2019]

VicRoads writes to Council offering to facilitate the land transaction


VicRoads wrote to Council's CEO on 25 January 2019 (received 31 January 2019) in response to the Mayor's letter of 16 October 2018:


"VicRoads have advised DELWP of our intention to progress with the rezoning of the Property, however, should Council wish to acquire the Property to preserve it as open space, VicRoads is willing to work with your team to facilitate this transaction. If this was to be pursued further I would suggest we jointly engage to the Valuer-General Victoria to determine the value."


The same letter also drew attention to the land at the rear of Clements Grove and sought to include it in the valuation with a view to providing a "permanent resolution." The correspondence asked for a response by 28th February 2019 to "ensure that the matter would not be delayed further."


[April 2019]

Valuation Request and Ministerial Approval for a Diminished Sale


On 29 April 2019, an officer in the Commercial Enterprises Department of VicRoads wrote to DEWLP for a formal valuation of the all three parcels of land. The signed request was dated 26 April 2019. This email was subsequently forwarded twice to unknown parties on 27 November 2019 and 5 December 2019.


The valuation request notes that all three parcels of land are covered by an Environmental Significance Overlay, and this is an area of Aboriginal "cultural heritage sensitivity." The documentation states that none of the areas are subject to inundation though one corner of 1-11 McMahon Road is shown as falling on an Urban Floodway Zone. There is also a Melbourne and Metropolitan Board of Works six-foot wide draining and sewage easement running along what appears to be the back part of the fence line of the McMahon Road parcel of land.


An officer from the Department of Transport (DoT) wrote back to Darebin Council on 25 July 2019 to confirm that they had received Ministerial approval for a diminished (discounted) sale for 1-11 McMahon Road, and also the rear of 22 & 32-34 Clements Grove, Reservoir. They were seeking Victorian Government Land Monitor (VGLM) approval and would get back to Council once advice had been received. An officer in Darebin's Governance & Performance (G&P) department replied on the same day and said that once confirmation was received they would provide a report to Darebin Council.


[October 2019]

Offer of sale met with repeated delays by Darebin Council


On 11 October 2019, an officer from the Department of Transport sent formal correspondence to Darebin Council offering to sell it the land (the proposed value is redacted from the FOI'd documents). In line with the government's land disposal policy, a condition of the sale would be that the land would be zoned Public Park and Recreation Use in perpetuity. They sought a response to the correspondence by 11 November 2019.


They did not receive an acknowledgment of the correspondence and made two further follow up requests for a response on 22 October 2019, and again on 15 November 2019.


A Council officer (G&P) responded on 15 November 2019, apologising for the delayed response and stating that they had been on leave and acting in another role. They were now going to prepare a report for Council and noted the matter would likely be delayed into the next year. Their email was acknowledged by the Department of Transport officer on 18 November 2019.


On 27 November 2019, the Council officer (G&P) wrote back to say that they had a private family matter interstate to deal with and that they had been unable to hand over to anyone. They sought an extension so that the matter could be considered at the first meeting of 2019.


The DT officer wrote back on 28 November 2019, as follows:


"The current valuation is valid until 25th December 2019. In-line with the Victorian Government Land Transaction Policy once the valuation has expired we are required to consult with the Valuer General to confirm if the offer is still current. Would you consider providing your report to Council noting the offer expires 25 December 2019, Darebin Council and Department of Transport will seek joint advice from the Valuer General to confirm if the offer is still current?"


There was no response to the correspondence from the Department of Transport officer.


On 15 January 2020, the Department of Transport officer wrote back again asking when the matter would be considered at Council, noting that the valuation had expired, and that they had received both Ministerial, and Land Monitor approval to sell the land at a diminished value.


There was still no reply to the Department of Transport officer's correspondence.


The Department of Transport officer wrote again on 29 January 2020 as follows:


"I have left a message for you. Can you please respond to the email/voicemail. [sic] DoT needs to progress this matter."


On 11 February 2020, the Department of Transport officer thanked the Council officer (G&P) for their time on the phone the previous week and reconfirmed that they were seeking "the timeframes which Council will be able to assess the acquisition of the sites."


On 20 February 2020, the Department of Transport officer again requested the timelines.


The Council officer responded on the same day as follows:


"As discussed I am in the process of preparing a briefing report but due to the required lead time it has been scheduled for Council briefing on 14 April 202 (sic) and then will go to the next corresponding council meeting on 18 May 2020.


Whilst I understand the current valuation has expired and a new one will need to be obtained, it will form part of the report."


The Department of Transport officer acknowledged the correspondence the following day.


On 29 April 2020, the Council officer told the Department of Transport officer that due to "unprecedented times" the matter would be deferred on the agenda until 29 June 2020.


On 30 April 2020, the Council officer unexpectedly responded to the Department of Transport officer's correspondence of 15 January 2020 as follows:


"Just wanted to confirm that this relates to the valuation undertaken on 8 May 2019, and there has been no subsequent valuation report."


[June 2020]

Valuation discrepancies and the allegedly poor instructions to Council's valuer


The Valuer General valuation was originally sent by a Senior Valuer to Council on 23 May 2019. Redaction of documents makes it unclear who it was subsequently discussed with in an email dated 11 June 2019.


The Associate states,


"No proper instructions were issued on the job and as I understood the valuation was only meant to be an indicative estimation of what the site is worth as parkland for internal purposes only. If you wanted a full market valuation of the land, you'd need to instruct that in future.


There were very limited details furnished to me of the site and no clarification of what can or can't be done on the site."


The Associate goes on to dispute the Valuer General valuation with reference to various local land sales of unencumbered properties [all financial details are redacted]. The person expresses disbelief that the property could be worth so much more in 2019 than it was in 2015.


The Associate says:


"In hindsight, I should probably look at it as three separate titles capable of being sold separately, but I incorrectly looked at it as an ove