Councils threaten to sue Fines Victoria for 'catastrophic' impact of unrecovered debts

| 01.10,19. 05:33 AM |


Councils threaten to sue Fines Victoria for 'catastrophic' impact of unrecovered debts



Photo: Fines Victoria is returning less to councils than it is collecting in fees. (ABC News: Clarissa Thorpe)


Victorian councils say they are millions of dollars out of pocket because of an "unacceptable service" from Fines Victoria and have threatened to take the authority to court.


Claims of delays and a drop in the recovery of fines has led to 11 councils experiencing massive cash shortfalls, since Fines Victoria replaced Civil Compliance Victoria in 2017.


The Opposition said it was worried the shortfalls will be passed onto ratepayers.


In a letter to Fines Victoria obtained by an FOI seen by the ABC, Hobsons Bay City Council (HBCC) chief executive Aaron van Egmond said the council had experienced an "unacceptable" $668,957 loss of revenue and threatened court action against the state body.


"This can only be viewed as a material breach of the contract of services paid for by HBCC, [which] has compelled me to write in a final attempt to achieve a satisfactory outcome prior to the initiation of independent court action against Fines Victoria," Mr van Egmond said.


'Catastrophic' impact


The City of Port Phillip Council claims it is owed $21.7 million in unrecovered debt from outstanding fines and Mayor Dick Gross said it is severely affecting councils' ability to deliver services to the community.


"It's having catastrophic levels of impact," Cr Gross said.


"People think fines are bad, so we don't get much community sympathy, but this money won't line fat cats' pockets, it will go to parks and gardens and important things like flood mitigation.


"We've got the new Fisherman's Bend suburb with 80,000 people to cater for so we're desperate to get our hands on that dough."


Council data shows that from every dollar councils paid to Fines Victoria in 2018 to recover fines, they only received about 69 cents back, which dropped from $2.13 in the previous year.


System issues and IT problems have been occurring at Fines Victoria since January 2018, and councils have met with the State's Attorney-General and Department of Justice, who said the issue would be fixed by mid this year, but councils said there has been no improvement.


It comes after Fines Victoria was slammed by the Ombudsman earlier this year when hundreds of people wrongly had their licenses suspended by the state body.


Councils including City of Melbourne, City of Yarra, Darebin City Council, City of Port Phillip, City of Stonnington, City of Glen Eira, City of Hobsons Bay, City of Hume, City of Greater Geelong and City of Maribyrnong have joined together to demand State Government action.


"We can't afford to see this money languish while the State Government sits on its hands, we can't cope with the incompetency of Fines Victoria," Cr Gross said.


"It's the ultimate irony, the agency which isn't supposed to be persuaded by crappy excuses is using a 'dog ate my homework' excuse."


The councils claim in 2018, the total impact of lost interest due to cash not being available for investment was around $50,000 per council, each year.


They said they have been forced to introduce additional steps in the fines processes such as final letters, which increase staff costs more than $400,000 across the group.


Concern shortfall will be passed onto ratepayers


Victorian opposition spokesman for local government Tim Smith said the issue has been going on for two years and needs to be fixed immediately.


"It's a total mess, the Andrews Labor Government needs to pay hat money back to these councils immediately, so councils can budget appropriately," Mr Smith said.


"Revenue is owed to councils, if they don't get that revenue that shortfall will be passed onto ratepayers through added charges and that is just unacceptable."


A spokesperson for the Yarra City Council said they did not know if they would get the money owed to them by the state body.


"The recovery rate of Yarra City Council debts referred to Fines Victoria fell significantly since 2017 and we have experienced financial loss as a result," a spokesperson said.


"Some of this loss may be recouped in the future but it's unclear at this stage."


City of Melbourne Deputy Lord Mayor Arron Wood said his council is working hard to recover the $8.4 million it is owed by Fines Victoria.


"While we accept Fines Victoria is working through this problem, we are still seeking a confirmed time frame on when their systems will be operating effectively."


Councils are demanding lodgement fees be suspended until the system is fully operational.


A Government spokesperson said the Government has been advised that Fines Victoria has increased its work directly with individual councils to increase their fines revenue return.


"While there has been a significant increase in fine recovery, it is our expectation that Fines Victoria continues to work with councils to improve their fine revenue."


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