Council threatens to sue Fines Victoria for 'catastrophic' impact of unrecovered debts

Claims of delays and a drop in the recovery of fines has led to 11 councils experiencing massive cash shortfalls in the past 2 years, since Fines Victoria replaced Civil Compliance Victoria in 2017.

In a letter to Fines Victoria obtained through Freedom of Information (FOI) by the Opposition, 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.

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.

"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.

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.

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.

Article first published on the ABC by Bridget Rollason.