Moira councillors react to their sacking by Victorian government

Local Government Minister Melissa Horne took the extraordinary action after a probe that covered murder, illegal asbestos dumping and late night criticism of a monitor given the task of scrutinising the council.

Commissioners Frances O'Brien and John Tanner outlined various layers of dysfunction to Ms Horne, who tabled their findings in state parliament on Tuesday March 7.

The commission itself has referred evidence, it has gathered, to the coroner as it may be relevant to the murder of former council manager Rick Devlin.

Mr Devlin was killed in 2021 by fellow council worker Andrew Robert Paterson who believed his boss was orchestrating an harassment campaign against him.

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The report found cultural issues at the Nathalia depot where the pair worked were not addressed sparking a "catastrophic governance failure".

The commission has also referred allegations of corruption to Victoria's Independent Broad-based Anti-Corruption Commission.

They relate to the transfer of asbestos-contaminated soil by council to unlicensed sites and the conduct of the shire's co-ordinator of facilities maintenance in relation to the allocating of contracts.

It was also determined the council could no longer meet its duties under the Local Government Act and had failed to manage the performance of chief executive Clare Keenan

It also found Ms Keenan had not behaved in a professional and ethical manner; not acted appropriately in response to serious misconduct tied to a breach of procurement policy; not mandatorily notified suspected corrupt conduct; breached occupational health and safety rules through a lack of responsible oversight.

Ms Keenan was seen as "ill-equipped" to deal with fraying ties among councillors because of limited council experience.

She was also frustrated with the monitor, who was appointed by the Victorian government last year to oversee the council's governance.

"She intemperately wrote to the monitor in a late night email accusing her of being 'petty and biased' and of being a 'third tier bureaucrat'," the commissioners wrote.

"When questioned by the commission as to why she would write such an ill-judged email she said that she was angry and needed to get it off her mind so that she could get to sleep."

The raising of Ms Keenan's salary package from $260,000 to $290,000 was examined as "the impetus for this review came from Ms Keenan who was discontented with her level of remuneration at the time of her appointment".

Tensions between Ms Keenan and councillor Judy Heather were mentioned.

Ms Heather welcomed Ms Horne's actions in dismissing the council.

"I feel very pleased that has happened, it's the only outcome that could work into the future but as a ratepayer I'm sad that we'll lose the link between ratepayers and council for the next five years," Ms Heather said.

She said since winning a countback in December 2021 her life on council had been "hell" as she asked questions and was rebuffed.

Dismissed mayor Peter Lawless was unwilling to comment other to say "the commission was appointed to do a job and they've done it".

Past mayor Libro Mustica was also tight-lipped apart from criticising the time ratepayers will be ruled by administrators.

"I don't agree that the community should be without democratic representation for five years, it should be two years," Mr Mustica said.

Axed Yarrawonga councillor Peter Elliott said "a noisy outspoken group set the tone for the commissioners, they seemed to listen to the minority rather than the majority".

The commission also found the council had mismanaged two Yarrawonga projects, a library and sport stadium.

"The costs of both projects have increased substantially beyond their original cost estimates," it declared.

"Serious design deficiencies have also been identified in both projects."

The commission also found the unsubdivided electoral structure of the council "is not working in the best interests of the shire" and should be reviewed.

In 2019 a recommendation of three wards of three councillors was rejected by the Local Government Minister.

An interim administrator to oversee council for the next three months is expected to emerge by Friday, later a panel of three administrators will be appointed.

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