By Lauren Henry 

Local Government Victoria has referred Horsham Rural City Council’s delay in adopting its annual Budget to the Chief Municipal Inspector.

Local Government Minister Melissa Horne did not grant council an exemption to adopting the Budget before the June 30 deadline.

The failure for a council to adopt its budget before June 30 is a breach of the Local Government Act 2020.

Horsham council has attributed the delay to ‘a switch to a new finance management system as part of the Regional Councils Corporate Collaboration Project’.

The other councils involved in the project were Hindmarsh, West Wimmera and Loddon – all of which adopted their respective budgets before June 30.

In a letter sent to Horsham council chief executive Sunil Bhalla on June 26, Local Government Victoria executive director Mike Gooey said he was replying as the minister had delegated Mr Bhalla’s letter requesting an extension on June 19.

“I can advise that due to the timing of your request, it is not possible to consider a different date for the adoption of the annual Budget by a council,” the letter read.

“As you know, the adopted annual budget is the legal instrument by which a council raises lawful rates and charges on properties. It authorises a council’s administration to expend the consolidated revenue of a council for the financial year.

“Without an adopted budget for 2024-25 in accordance with the requirements of the Local Government Act 2020, these may be in jeopardy.

“I would urge your council to seek urgent legal advice on this situation and the consequences for Horsham Rural City Council in failing to meet the statutory deadline of June 30 for the adoption of the annual budget.

“As per our discussion, I am obligated to notify the Chief Municipal Inspector of this matter.”

The Chief Municipal Inspector did not respond to The Weekly Advertiser before yesterday’s print deadline.

When councillors debated whether to adopt the Budget at a July 22 meeting, Cr Claudia Haenel questioned Mr Bhalla about the validity of adopting the Budget and whether there would be ramifications for councillors in doing so.

The lengthy debate about the Budget raised the ire of three councillors, and the meeting was paused while councillors left the chambers to discuss privately whether the motion could be amended, as per the request of Cr Ian Ross.

On return to the council chamber, the decision to not allow the amendment to proceed because it would change the make-up of the Budget and the rates system resulted in a disgruntled gallery, with one person being ejected, and Mayor Robin Gulline shouting.

Letters of complaint about Cr Gulline’s behaviour have been lodged with the Local Government Minister.

Mr Bhalla said on Friday that ‘council has not received correspondence from Minister Horne’ on either the Budget delay or Cr Gulline’s behaviour.

A media release from Crs Haenel, Ross and David Bowe last week expressed their ‘extreme disappointment’ about the Budget delay, and appropriate community consultation period.

The three councillors, who voted against the adoption of the Budget, pointed the fingers at the council chief executive and mayor.

“We believe the appropriate governance position should have been that council resolve to move a resolution, as soon as they were aware of the potential delay, to request an extension from the Minister,” the media release read.

“The failure to do so has placed our internal staff under immense pressure and has caused significant reputational damage to council. We believe this has been a failure by our leaders.”

The councillors said if council had been briefed appropriately, it could have applied for an extension earlier.

“The relevant documentation regarding the request for extension, as requested prior to the budget meeting on July 22, was only provided to all councillors on July 29, one week after the budget meeting,” it read.

“We believe we were not fully briefed with the relevant deadline extension information, as requested prior to the meeting, where the responsibility of setting the agenda lies directly with the CEO and the mayor.”

Mr Bhalla said councillors were briefed in detail ‘on the progress and issues with the Budget including the decision to delay the presentation and adoption of the final budget’.

But council documents show Cr Haenel only attended one of the past 10 council briefing meetings since April, while Cr Ross missed two in early June and Cr Bowe attended all.

“It was a difficult decision to delay the adoption of the budget ... part of this decision was also about ensuring our councillors had sufficient time to fully consider the budget prior to finally adopting it,” Mr Bhalla said.

In her column in council’s newsletter last week, Cr Gulline said it had been a ‘challenging week’ in regards to the Local Government Inspectorate asked to investigate the Budget process.

“With the importance of truth in mind, I look forward to the outcome. While there are some inflammatory claims being made in the media, I want to reassure you that we have a valid operating budget that is fiscally responsible and provides the facilities and services that our community needs,” she said.

The entire August 7, 2024 edition of The Weekly Advertiser is available online. READ IT HERE!