Call for Public Enquiry into Lane Cove Council

The Lane Cove council (LCC) has just announced that due to it’s financial position, it is considering a special variation to increase rates above the Independent Pricing and Regulatory Tribunal (IPART) rate peg. Currently LCC charges the maximum it is permitted, which is an annual increase of 3.9%.

There is significant prima facie evidence to suggest the council misled the public in order to gain approval for a proposal to build a $81M Sports and Recreation Centre (SRC), particularly in relation to Asset Management.

The council did not issue its Asset Management Plan for 3 yrs leading up ...

The Lane Cove council (LCC) has just announced that due to it’s financial position, it is considering a special variation to increase rates above the Independent Pricing and Regulatory Tribunal (IPART) rate peg. Currently LCC charges the maximum it is permitted, which is an annual increase of 3.9%.

There is significant prima facie evidence to suggest the council misled the public in order to gain approval for a proposal to build a $81M Sports and Recreation Centre (SRC), particularly in relation to Asset Management.

The council did not issue its Asset Management Plan for 3 yrs leading up to the approval of the SRC, and manipulated the Long Term Financial Plan with an intent to conceal that an asset renewal deficit of around $40M would accrue over the next 10 years if the proposal proceeded. Also, that the health of council roads and parks would rapidly deteriorate to a rating of around 50%, due to cost savings to fund the proposal.

There was strong public objections to this proposal, as it was a high cost facility of $75M, which was for the whole of the Lower North Shore, where local residents usage was estimated to be less than 20%; but Lane Cove Council was taking on the full burden of funding it, and all risks related to the construction.

Furthermore, the council was unable to maintain the roads and parks, but was taking on significant constructions.

Around June 2024, members of the public first identified serious anomalies with the council planning documents and raised these matters with the council and other government oversite organisation, such as the Auditor General, Ombudsman, Minister of Local Government and ICAC, prior to the final appointment of the head contractor in August 2023.

There have been over a 1000 submissions made to these organisations, through petitions and emails, making Lane Cove Council have the highest rate of complaints to the Ombudsman for the last 2 consecutive years, and yet, no action was taken by a single organisation, now resulting in the public having to pay even more for this facility.

Furthermore, there have been 2 audit since the matter was repitatively raised with the Auditor General, but these issues and risks were not identified or mentioned the their report.

Commitment to a Capped Budget of $75M breached

Due to the public concern on cost, the council mislead the public by commiting it would operate with a capped budget of $75M. Within 6 months of the project commencing the budget cap was breached by $6M (ref: Council meeting papers for May 2024). The necessary steps to implement the cap, such as fixing the price of all mandatory work, had not been taken. It is plausible that this was done to reduce the starting contract price by sharing risk, thereby meeting the $75M cap, to gain approval.

Questionable exercise to bring tender under the capped budget

All head contractor tenders came above the capped budget. The council then deligated the General Manager authority to deal with one of the tenderers to bring the price under the budget. In August 2023, the GM reported he had achieved that. However within the1st month of work commencing, $6M worth of contract variations were raised (ref: PCG meeting papers of 10th Oct 2023). The integrity of this exercise should be examined.

The Lane Cove public has lost confidence in the integrity of the council due to its reckles management of public funds and assets, and in the effectiveness of government oversight agencies.

This campaign calls for a public hearing into the events that have led to the current liquidity crisis and hold those liable to account, and investigate how all government oversight agencies, particular the auditors; failed to act or identify the issue.

It also calls for actions to find alternative sources of funding to pay-off the $10M loan for this facility, and engage a consult to review council processes and to instill integrity, so that the public can build trust in the councils ability to responsibly manage public funds and assets.

+

Inaction by Government oversight organisations

20 emails sent

This action is to call for a public enquiry into,

Council activities leading to the approval of the $75M Sports and recreation centre
How the Office of Local Government Capital Expense Review approval was given for a $75M capital expense without an Asset Management Plan.
Why the Audit Office did not pickup the impending liquidity crisis, despite having performed two audits after being alerted by public of the issues.
why the council and various government oversight organisations ignored over a 1000 calls from the residents of Lane cove to investigate the operations and financial status of the Lane Cove Council over the last 3 years, which has now led the council to a liquidity crisis requiring a Special Rate Variation.

Furthermore it calls for the council to seek other sources of government funding prior to a Special Variation on rates for Lane Cove council Residents, and an external review of council opertations so the public can gain confidence in the council being fit to manage public funds and assets.

The call is addressed to,

Bola Oyetunji, Auditor General NSW

Daniel Mookhey, Treasurer NSW

Courtney Houssos, Minister for Finance

Ron Hoenig, Minister of Local Government

Paul Miller, Ombudsman NSW

John Hatzistergos, Commissioner ICAC

Where do you live?

Compose your email

Name

Email

Subject:

Dear Daniel Mookhey- Treasurer NSW, Bola Oyetunji- Auditor General NSW, Courtney Houssos- Minister for Finance, Ron Hoenig-  Minister of Local Government, Paul Miller-  Ombudsman NSW, John Hatzistergos-  Commissioner ICAC

On the 7th May 2025, councillors from Lane Cove Council signalled to a small group of residents that council is considering a Special Variation in rates in year 2026/27, above the maximum permitted of 3.9% specified by the Independent Pricing and Regulatory Tribunal (IPART).

The Asset management plan for 2024/25 showed that the council would accrue an asset renewal deficit of around $40M at the end of the 10-year plan. The draft operational plans for 2025/26 being socialised, shows that the health of roads and parks has deteriorated to an alarming 50% and cannot be improved due to a liquidity crisis. Yet, council is fully funding an $81M Sports centre for the entire Lower North shore, with just 20% usage by Lane Cove residents.

The public took several steps to try protect public funds and assets, such as, reminding councillors of their duties when assessing capital expenses; alerting councillors and oversight agencies such as the Audit Office, the Office of Local Government (OLG), the Ombudsman NSW and ICAC of fraudulent and misleading documents used to gain approval; and calling for an external review prior to proceeding; but to no avail.

Despite objections by some councillors, the proposal was approved by a series of resolutions passed by use of the mayors casting vote.

It is now evident that council was fully aware of the need for a Special Rate Variation well before the approval of the $81M Sport and Recreation Centre (SRC) but concealed it from the public.

It also concealed the intention to allow the public assets to rapidly deteriorate due to lack of maintenance, so it could funnel funds towards saving for the facility. It achieved this by failing to issue an Asset Management Plan (AMP), key component of the integrated planning framework; for 4 consecutive years (2019-2022 inc) leading up to the approval of the sports centre; and concealing 8 performance factors in critical criteria such as asset maintenance, asset renewal deficits and capital expenses; from the Long Term Financial Plan (LTFP).

The LTFP and AMP are 2 of 3 critical components of the integrated planning and reporting framework mandated by the Local Government Act 1993 (section 8A,(1).(d)). These are forward financial planning tools that enable analysis for investment decisions, and would clearly show that the SRC was not a viable investment. Instead of using the tool to engage public and increase public knowledge, council plausibly manipulated the information and used it to mislead the public and decision makers.

In effect, over this period (from 2019 - Aug 2023), council made $160M in capital expenses (Canopy $81M and SRC), while planning to accrue an asset renewal deficit of $40M, taking on debt of $10M and running down the health of roads and parks to a health rating of around 50%.  It is plausible that the council repetitively breached both the Local Government Act and ICAC during this period. Furthermore, it is unclear who and which government agencies were complicit in this deception.

The council has just adopted its LTFP for 2025/26 which still has no mention of the SRV. It is still concealing that it intends to apply for an SRV next year. Meanwhile the public assets are degrading at rate of $3M per year. This is not in the public interest. One possible explanation for this is that it is trying to dis-associate the SRV from the SRC and that it was concealed from decision makers.

The end result is that through no fault of their own, the only person held to account is the Lane Cove resident, who is penalised by a Special Rate Variation.

I believe the council has acted recklessly and criminally and is no longer fit to manage public funds and assets valued over $1B. The public has the right to know the full extent of the misconduct, why all financial controls and oversight authorities failed despite being alerted, and that corrective actions are taken to protect public funds and assets. This can only be achieved through commissioning an independent public enquiry, an external review of council processes and holding those involved to account.

KEY EVENTS
==========
1.	Council failed to issue an Asset Management Plan (AMP) for 4 consecutive years, 2019-2022 inclusive, when it was already developing the Canopy worth $81M, and seeking approval for the Sports Centre. The AMP is a key component of the integrated planning framework which provides a view of the current health of assets, and a ten year forward plan. The council breached the planning process that requires the AMP to be socialised with the community, annually. A breach of Local Government act 8A.(1).(d).

2.	In August 2022 council issued a fraudulent Long Term Financial Plan (LTFP) which had several alterations from previous years, to present a false positive financial position and conceal negative information. The LTFP is a tool that enables analysis of the financial impact of investment decisions. Instead, council misled the public by manipulated the plan to conceal the impact on capital expenses and asset health. This included using a CPI forecast rate of a 3rd of the RBA forecast based on spurious reasons, and removing key asset health and capital expense performance factors, the ability to compare actuals from previous years with planned values, and 3 year performance ratios.

Had the tool been used with integrity, this liquidity issue would have been exposed to the public in August 2022. It is also reasonable to suggest that council was fully aware of the need for a special variation in August 2022.

Plausible breach of ICAC clauses 8.(1).(a), (b) and (c).

3.	In Nov 2022, it is successful in its Capital Expense review by the Office of Local Government, based on the fraudulent LTFP and without an AMP. The submission states, “Council has reviewed its asset management plan and confirms that the project does not impact on any ongoing management….”. This is despite not having issued an AMP for over 4 years.

Plausible breach of ICAC clauses 8.(1).(a), (b) and (c).

4.	In Dec 2022, council draws down a $10M T Corp loan approved for the Sports Centre, and invests it, even before the proposal was out for tender, or had final approval in Aug 2023, 8 months later.

Plausible breach of terms and conditions of the T-Corp loan.

5.	In Mar-Apr 2023 around 70 residents objected to LCC paying the full cost and taking on the risk of a $75M sports centre, and requested that the Auditor General perform a review to confirm that, Asset maintenance funds had not been diverted to pay for the centre, and that council could undertake the project.

6.	On 12th April 2023, in a widely distributed email, the mayor states that, “No recurring revenue from Council rates has been allocated to this project.”. This was in full knowledge that a T-Corp loan of $10M required repayments of around $1.2M for 10 years from operational revenue. Furthermore, he may well have known that a Special Rate Variation was required.

7.	On 14th June 2023 councillors were reminded of section 6.5 of the councillor’s handbook which requires that they consider the full lifecycle impact, not just the construction cost. They were also alerted to an invalid CPI forecast rate being used, and several key performance measures relating Capital expenditure and Asset management had been removed from the LTFP, and that the likely cause was that 8 of the 15 measures would turn red (targets missed). This would be a clear indication that the proposal should not go ahead.

8.	From this point all resolutions were passed by the major and 3 other councillors, and the use of the mayors casting vote.

9.	In Jun 2023, the office of Local government and Ombudsman NSW were asked to investigate suspected corrupt behaviour and called for a public enquiry.

10.	On 29 June 2023, a letter from the General Manager to the Secretary of the Office of Local Government (Council Doc Ref: 37565/23), states that

“Council’s trajectory going forward is that it will fall below the target of 100% target in 2026/27 unless there is some form of intervention…….a conversation around a Special Rate Variation, expressly for asset renewal purposes, sometime in the future.”

This confirms that the GM was fully aware of the liquidity issue and the need for intervention, however it was never presented to the public and decision makers as an impact for consideration during the assessment/approval stage of the SRC. Furthermore, it may have also been concealed in the application for the $10M T-Corp loan and OLG Capital Expense review.  This is plausibly a serious breach of ICAC and the Local government act.

11.	In July 2023 council reported that all tenders had come above the capped budget of $75M. It then resolved to delegate authority to the General Manager (GM) to deal with one of the tenderers to bring the price within the cap based on some cost reduction principles. In August the GM reported he had successfully achieved a price of $63.9.

12.	However, within a month of work commencement, $9M of contract variations were added. And within 8 months the budget cap was exceeded by $6M (ref. Project Control Group reports).

13.	There have been 2 subsequent audits by the audit office, which despite the numerous alerts, have not identified the liquidity issue and the need for intervention.

14.	The council has just ignored feedback from 20 residents calling for corrective action by requesting all 15 performance measures displayed on the LTFP of 2019 to be reinstated; and has presented an LTFP with just 7 measures for adoption by council. It continues to conceal performance indicators on key areas such as asset maintenance, asset renewal deficit and capital expenses, and hence mislead the public.

15.	Lane Cove Council has had the highest rate of complaints to the Ombudsman for councils for the last 2 successive years.

16.	Council staff openly complain about understaffing and the council has had to engage professional psychological assistance for staff.

The residents of Lane Cove identified the irregularities in the LTFP and took every measure to prevent the reckless use of our public funds, and to protect the health of our assets. However, the failure of council processes and financial controls, failures in the NSW financial risk management function delegated to the audit office; and the lack of action from oversight agencies have brought us to this position.

RESIDENT HAVE THE RIGHT TO KNOW
===============================
1.	How could the annual integrated plan be issued, leave alone adopted, for 4 consecutive years without a key component, the Asset Management Plan, particularly in the context of capital investment of $160M between the Canopy and the Sports centre? Was this done to conceal that asset were being run down to save for the Sports centre? Who was involved in misleading the public and other decision makers?

2.	The Local Government act section 8A.(1).(d) states, “Councils should apply the integrated planning and reporting framework in carrying out their functions so as to achieve desired outcomes and continuous improvements”. This framework ensures that sound financial modelling takes place. Was the current liquidity issue created due to a failure of the framework, or was there corruption?

3.	Section 8A.(2).(e) on decision making states,” Council decision-making should be transparent and decision-makers are to be accountable for decisions and omissions.” Has the council misled the public and other decision makers? And should the decision-makers who progressed with proposal even after being alerted to the false information on the LTFP, such as the mayor (who used his casting vote) and 3 councillors who voted for the proposal; been held accountable?

4.	What reviewing process is there to ensure that key measures and correct CPI forecasts are used so the LTFP reflects a true and complete view? How could performance measures be deleted to conceal failures? Does the council rely on the public to raise issues on basic failures? Is it a breach of the Local Government Act Section 8A.2 on Decision making?

5.	Who in the council knew that the council would accrue an asset renewal deficit of between $40-$50M, and the roads and parks would deteriorate to a health rating of 50%, if the SRC proceeded?

6.	The liquidity issues and the need for a Special rate Variation would have been identified when financial modelling was done in August 2022 to release the LTFP. Was the deviation from using RBA CPI forecasts and removal of key performance indicators done to present a false positive financial position?

7.	Was the council capitalising on the councillor’s and public trust and limited knowledge in financial planning? Or were the councillors complicit?

8.	How did the OLG Capital Expense Review succeed without an asset management plan therefore no awareness of asset health and a renewal deficit growing to $40M? Is there a fault in the Capital Expense Review? What was the council referring to when in its submission it states,” Council has reviewed its asset management plan and confirms that the project does not impact on any ongoing management….”  , when no AMP had been released for over 4 years?

9.	In June 2023, when the GM informed the deputy secretary of OLG that a liquidity issue needed intervention with a Special Rate Variation; why didn’t the deputy secretary take action to request the project is put on hold until a full review was performed, as requested by the public?

10.	How was the $10M T-Corp loan approved, when the council was accruing a $40M asset renewal deficit and had obvious liquidity issues over the 10 year term of the loan? Did the fraudulent LTFP contribute to this decision? Is there a shortcoming in the T-Corp assessment process?

11.	Did council breach the terms of the T-Corp loan, when it drew the funds in Dec 2022 and invested it in another type of risks and make income from it, even prior to the project being approved? Was the approval of the SRC a foregone conclusion supported by 4 councillors and the mayors casting vote?

12.	Being the delegated authority for financial risk management in NSW, why didn’t the Audit Office act on the alerts from the public? And why did the Audit Office fail to identify and report on the imminent liquidity issue and the need for a Special Rate Variation (which was known by council) in the last two audits (2023 and 2024)? Is there an Audit process failure?

13.	Why was the $75M capped budget commitment breached? Why wasn’t it implemented in the contract (i.e. all mandatory work having fixed price) to prevent the blowout of $6M within 8 months?

14.	Was there integrity in the cost reduction exercise performed to bring the price below the capped budget of $75M? Where items removed and then added back as contract variations once the project was approved causing the $9M variation within the 1st month?

15.	In Aug 2023 council stated that “Council has now reached the stage of construction commencement for a much-needed recreation facility to service the Lane Cove LGA and broader Lower North Shore area. Council has achieved this in line with its commitment to a total project budget of $75 million”. Who was it representing, when the residents had objected to council alone funding a project for the whole of lower north shore? Was there influence from developer lobbies?

16.	Both the Canopy and the SRC proposals tender processes involved the council rejecting all submissions, and then delegating authority to the GM to negotiate directly with some of the top tenderers. Both contracts were awarded to ADCO construction pty. ltd. Was there any breach in the tender process, in light of the cloud of misleading activities listed above.

17.	In April 2023 why did the mayor state “No recurring revenue from Council rates has been allocated to this project.”, knowing that the T-Corp loan payments of over a million / annum, would be paid from rates? Was he aware that a Special Rates Variation was required?

18.	Did the four councillors who approved the facility in full knowledge of the fraudulent LTFP, and their duty to assess the full life cycle impact of the proposal, act responsibly? In particularly the mayor who used his casting vote for all the final resolutions to proceed.  Also, did the representative for East Ward where the facility is located; who abstained for all resolutions regarding the Sports centre, despite member/s of the public pleading for him to represent them; perform his duty to represent the community?

19.	Why was the General Managers contract extended for 5 years, over 12 months prior to its expiry and within a couple of months of council elections?

20.	Why didn’t the oversight/ watchdog agencies, the OLG, Ombudsman, Audit Office and ICAC act on the residents’ alerts?

21.	The need for a Special Rate Variation has been known since August 2022, disclosed to the deputy secretary of the OLG in June 2023, and has now been signalled to the public. Why is it being delayed causing further deterioration of council assets? Is it purely an attempt to dis-associate it from the expenses for the SRC?

22.	Why was the GM's contract extended by 5 years, with more than a year prior to his contract expiration, and just 2 months prior to the council elections?

These are just a subset of questions that can only be answered by commissioning a Public Enquiry.

It is alarming that a council of 16k households, which council could not afford to maintain the parks, roads and Lucretia baths, could make $160M worth of capital expenses in a 4yr timeframe, despite residents raising alarms. All government financial risk management frameworks could be deemed defunct, as they were unable to identify the impending illiquidity crisis and protect the residents; despite numerous alarms being made.

There are multiple failures of process controls, failures of the Financial Risk Management Framework across several government agencies, and plausible evidence of maladministration (as defined in section 11.2 of Protected Disclosures Act) and corruption (as defined in section 8 of ICAC act). Furthermore, despite the numerous complaints to oversight watchdogs they were ineffective and failed to act.
 
The result is that the only party being penalised by these failures, are the residents of Lane Cove who through no fault of their own, despite taking every possible action to prevent it from occurring; are being imposed with a Special Rate Variation.

I ask that,
1.	The Ombudsman and OLG call for a public enquiry into the Lane Cove councils handling of this matter, the failures within the government financial Risk Management framework; the failure of oversight agencies to act, to seek answers to the questions above, and to hold those involved in misconduct, accountable.

2.	The OLG organise an external review on council procedures and financial planning controls, so as to rebuild public trust. Also, to assist with other possible sources of funding, such as the Ministry of Sport NSW, as this is a sporting facility, and Northern Sydney Regional Organisation of Councils (NSROC), as 80% of the usage is expected to be from Lower North Shore, external to Lane Cove.

3.	The Treasurer to take due responsibility for the failure of financial risk management frameworks for public funds, and take real measures to assist the council recover, such as a $10M grant to repay the T-Corp loan; instead of further penalising the residents of Lane Cove, who have been exposed to council deceit, inaction by oversight agencies and safety hazards due to unmaintained rundown parks and roads.

The community took every measure to try and prevent the crisis, therefore should not be penalised with a Special Rate Variation.

How we use the data you enter on this form

Do Gooder (the advocacy platform powering this online action) processes personal information from you that you enter on this form so that we can provide the functions and related services to you and The Campaigner (the organisation responsible for this online action) for their legitimate purposes, including possibly exporting it to other systems, and to effectively respond to enquiries and communications related to those services.

Specifically when you enter:

Your location data (residential address or postcode) it is used to locate your elected representative, to pre-populate your email signature and to provide The Campaigner with a visualisation of the location of the support for this campaign.
All other data you may enter, including your email address, name, telephone number, commentary and so on is used by The Campaigner to advocate for the campaign’s goals and where required may be sent to the target of the campaign.

The data collected by Do Gooder is also used by us in aggregate form to improve the service and may be held on your behalf outside your country of residence by our third party service providers. These providers are bound by contract to only use personal information on our behalf, in accordance with agreed terms. While the privacy laws of the country in which personal information is stored or transferred may be different from those in your country, we will always have safeguards in place when storing or transferring personal information. We will never sell, rent, loan or in any other way pass your information on to other parties other than to provide this service to you and The Campaigner.

The personal information collected by Do Gooder is held subject to a Data Processing Agreement between Do Gooder and The Campaigner in compliance with the EU's GDPR and Australian law.

Learn more about our privacy policy here

How is my data used?