The inquiry ordered no prosecutions or suspensions but made five recommendations which last month’s council meeting described as too vague for a formal response – as required by State law – without further direction and clarification.

‘Absolute powder keg’

It followed a public submission by Nunile ratepayer Frank Panizza who described nine of the inquiry’s findings as an “absolute powder keg” for suggesting that the shire should not take action to recover debts if legal costs exceeded the amount owed.

“I can’t overstate the parlous state that this puts our local government in,” Mr Panizza said.

“I just don’t think the authors even thought of that prospect, which in my view is absolutely damning of the report and its authors.”

The report recommends a governance review, councillor training, new Shire CEO Suzie Haslehurst to deliver a “comprehensive” report to the Director General of the Local Government Department on what councillors gained from training, independent CEO performance reviews and a review of the CEO’s authority to take legal action on behalf of the shire.

‘Half-arsed’

Cr Ben Bell said Ms Haslehurst’s recommended response was “awful” and “half-arsed”.

He refused to apologise when Shire Deputy President Beth Ruthven raised a point of order to object that his comment was “unnecessary”.

Shire President Rosemary Madacsi did not rule on the point of order but urged all councillors to “note we have an obligation to the community to conduct ourselves appropriately”.

“Why would anyone pay a fine if you know the legal bills are going to be higher than the fine?” Cr Bell said.

“We have had no clarification or direction from the department about how to deal with someone who doesn’t pay.

“It’s going to lead to an unsustainable council and administration with everyone saying

‘I’m going to make sure the legal bills are higher than the penalty and I know you won’t chase me’.

‘Tick and flick’

The inquiry report doesn’t address half of the concerns, and when the community sees this response it reads like ‘tick and flick’ and shows no forward path on how this council can be better,” Cr Bell said.”

New Cr Mick McKeown said Point 3 of the inquiry’s recommendations “asks the CEO to do the impossible” by delivering a “comprehensive report that demonstrates the knowledge and understanding I gained from the training”.

“I don’t know how the CEO can possibly do that,” he said.

Ms Haslehurst’s recommended response to WA Local Government Minister David Templeman was moved by Cr Susan Pearce and seconded by Cr Phil Hart.

It was defeated 6-1 with only Cr Hart in favour and Crs Therese Chitty and Paula Greenway absent on approved leave.

Cr Bell seconded Deputy President Ruthven’s alternative motion that the council defer its response to enable further discussion at a workshop before holding a special council meeting to vote on the outcome.

The motion was carried 7-0 and requires the council to finalise its response to the inquiry report by Tuesday November 17 when a 35-day statutory deadline expires.

The former council had failed to comply with local government regulations in February 2013 when it voted 8-0 – against Mr Scott’s written advice – to launch legal action over an “overpayment” of $150,000 to former Toodyay CEO Graham Merrick.

Mr Scott wrote that there was “no reasonable prospect of success” and that the shire should “not commence legal action”.

The council disregarded Mr Scott’s advice and failed to record any written reasons – as required by law – “for a decision that is significantly different from the CEO’s written recommendation”, the report said.

Mr Scott then failed a policy requirement to obtain three quotes to pursue the matter and failed to keep the council informed about mounting legal costs that eventually totalled $548,000 over four years.

‘Unethical’

He also “acted in an unethical manner by not disclosing to the council that his son is working with the legal firm that the shire has frequently engaged to provide legal services”.

The inquiry report said there was no evidence that Mr Scott had updated the council about legal costs “which would have been prudent particularly at the time that the legal costs exceeded the sum that could potentially be recovered from Mr Merrick”.

“The CEO recommended that once proceedings started, the shire not withdraw from the matter due to the shire being liable for their own legal fees and Mr Merrick’s legal fees.”

“When the CEO was questioned about his son working for Civic Legal, he stated that he had spoken with the shire president about it and the CEO didn’t consider it to be an issue.

“At no time was this conflict of interest matter documented or put to the council.”
The report said Mr Scott’s actions were not an offence under local government law “however it is unethical and not behaviour that should be expected of a CEO”.

The report also detailed several instances where Mr Scott failed in his “significant responsibilities” as a financial manager, including that he:

• “Failed to ensure the resources of the local government were effectively and efficiently managed”, and
• “Did not have adequate oversight of the day to day operations of the local government, and this failure by the CEO has caused or contributed to the potential unnecessary costs to the Shire of Toodyay.”

Misconduct

Mr Scott was also found to have breached the shire code of conduct in an email to former Cr Di Granger which prompted her shock resignation only four months after she defeated former shire president David Dow in Toodyay’s 2017 council elections.

Mr Scott was found to have breached a requirement to “avoid derogatory statements” by “failing to communicate in a professional manner which may (as a result) cause any reasonable person unwarranted offence or embarrassment”.

The report said Mr Scott’s tone in earlier emails to former Cr Granger was “condescending”.

When the council went behind closed doors in January 2018 to consider her motion about “managing the performance of the CEO” Mr Scott “proceeded to verbally berate Ms Granger in a hostile manner which she felt was highly inappropriate and was embarrassed,” the report said.

“At no point did the presiding member (former shire president Rayner) bring the CEO to order.

“There are indications the relationship between the council and the CEO was not functioning per the requirement of the LG Act, which should be one of employer and employee.

“There are sections of the community which were unhappy with the lack of transparency and accountability of the Shire of Toodyay.

Due to a lack of positive action by the council in relation to the CEO, the discontent within the community has culminated in the need for an inquiry.”

Two other remaining councillors who joined Cr Rayner last year to vote in favour of a surprise backflip to retain Mr Scott for another 12 months after a decision not to renew his contract were former shire deputy president Chitty and Cr Greenway.

Mr Scott resigned in April this year after taking two months extended sick leave for an undisclosed illness just hours before the start of the council’s February meeting.