Administrator, Mr Dick Persson AM welcomes the announcement by the Honourable Shelley Hancock MP, Minister for Local Government establishing an independent public inquiry into the performance of Central Coast Council.
Council continues to take steps towards financial recovery in line with its Business Recovery Plan.
Proactive release of Information to be provided under a formal GIPA
Council has proactively released the following information on 9 March 2021.
|No||Date||Description of record||Download Link|
|1||19/11/2020||Meeting File Note||1.Meeting File note 19112019.pdf|
|2||20/3/2020 - 1/4/2020||Email correspondance between Gary Murphy and Craig Norman||2.Email correspondence between GM and CN|
|3||23/3/2020||Email correspondance between Gary Murphy and Craig Norman||3.Email correspondence between GM and CN-23320|
|4||27/3/2020||Email correspondance between Craig Norman and a number of people including Gary Murphy||4.Email correspondence between CN and a number of people including GM 270320.pdf|
|5||20/4/2020 - 21/4/2020||Email correspondance between Gary Murphy and Craig Norman and forward email from Carlton Oldfield||5.Email correspondence between GM and CN and forward email from CO.pdf|
- On October 6, 2020, Council announced it was in a ‘serious financial situation’ and faced an ‘immediate and serious liquidity’ issue.
- The Office of Local Government was advised, there was an immediate review of Council’s budget and a 100-Day Recovery Plan (now Business Recovery Plan) was developed.
- Council engaged Clayton Utz on 26 October 2020, and Clayton Utz engaged KPMG to undertake a targeted forensic review of a sample fund to gain understanding of Council’s financial accounting practices and adherence to the Office of Local Government Guidelines.
- On October 30, 2020, Minister for Local Government, Shelley Hancock MP suspended the Council and appointed an Administrator, Mr Dick Persson AM. Mr Persson is supported by Mr Rik Hart as Acting CEO to oversee Council’s operational recovery. This suspension has been extended until 29 April 2021.
- It was determined that the former CEO Mr Gary Murphy did not meet required standards of his role particularly regarding the core requirement of sound financial management and his contract was terminated 30 November 2020. Recruitment of a new CEO is underway with a planned commencement date of early April 2021.
- Natalia Cowley was appointed as Chief Financial Officer 16 October 2020 and the temporary appointment of Malcolm Ryan as Chief Operating Officer on 30 November 2020 to assist with the implementation of structural change in Council.
- A 30 Day Interim Report was issued 2 December 2020 by the Administrator Dick Persson which sets out preliminary findings and conclusions about how Council found itself in the current financial situation. It states that Council has failed to understand or practise the basics of sound financial management and that the investigation found no evidence of theft or corruption. However there had been unlawful use of restricted funds.
- Council endorsed the making of an application to the Independent Pricing and Regulatory Tribunal, on Thursday 26 November for a one-off Special Variation of 8% in 2021/22 to remain permanently in the rate base for 7 years, which plus the 2% rate peg increase in 2021/22 represents a total rate increase of 10% for 2021/22. Council further resolved to undertake community consultation on the application.
- The Administrator issued a 3 Month Progress Report on 3 February 2021 providing an update on the current situation and progress to date on the Business Recovery plan, with FAQs for the community.
- Council endorsed community consultation for a further rate option on 14 December for a one-off Special Variation of 13% in 2021-22 to remain permanently in the rate base as well as the 2% rate peg. This further option, to also undergo community consultation, was in response to further work undertaken in forecasting the reduction in service levels to achieve sustainable long-term financial plans and repay restricted reserves.
- Formal consultation on the rate rise options was undertaken between 8 January 2021 and 1 February 2021. The results of the consultation can be found here – Securing Your Future Consultation Report 4 February 2021.
- At it's meeting on 3 February 2021, Council resolved to hold a Constitutional Referendum for the reduction of Councillors (from 15 to 9) in conjunction with the September 2021 Local Government Elections. On 1 March, public consultation commenced to understand the views of the community to inform referendum questions which would be delivered at the next Council election.
- On the 8 February 2021 Council resolved to apply to IPART for a 15% one-off permanent special rate increase. Council adopted the revised Long-Term Financial Plan (General Fund) as well as the Debt Recovery and Hardship Policy for purpose of public exhibition. Find out more about the application, impacts on ordinary rates and answers to frequently asked questions at yourvoiceourcoast.com
- On 3 March 2021 Mr David Farmer was appointed the new CEO for Central Coast Council
- 9 March, Council received the 'Clayton Utz Legal and Financial Forensic Review' and noted it will continue to receive a monthly report to a Council meeting detailing the financial position of Council at month end (being the Investment Report) as required under the Local Government Act 1993.
- 15 March, public consultation on the Constitutional Referendum for Council concludes with 78 percent of 613 survey participants wanting to reduce the number of Councillors from 15 to 9, and 55 percent of 465 survey participants wanting to abolish Wards and have all Councillors represent the whole Central Coast.
- 12 April new CEO, Mr David Farmer commences and Mr Rik Hart (Acting CEO) and Mr Malcolm Ryan (interim COO) step down.
- Administrator releases his final report to the community on 15 April outlining a number of recommendations to the Minister for Local Government including to take whatever action is necessary to prevent the return of the currently suspended Councillors, and to delay the September 2021 election to allow for a formal inquiry to determine what is needed to achieve the successful merger of the two previous Councils.
- 26 April The NSW Government has announced a public inquiry into Central Coast Council's financial situation.
Council continues to face a serious financial situation with an accumulated debt of $565M, including accessing restricted reserve funds without the necessary permissions. Council’s operating loss for the 2020-21 financial year is forecast to be in the order of $115M. This follows last financial year’s loss of $89M.
Council has already started a number of measures to manage costs and increase income to address the situation and long-term financial sustainability including:
- Obtaining $150M in bank loans to enable Council to continue operating – completed in December 2020.
- Major reduction in operating expenses – in progress and ongoing.
- Reducing staff back to pre-amalgamation numbers from over 2,500 to under 2,000 – cost savings of $31M. The number of Executive Directors has been reduced from 9 to 5, and the number of senior and middle managers has been reduced from 39 to 26.
- Reducing materials and contracts by $22M
- Ensuring infrastructure spending budget is capped at $170M per year
- Selling $40-$60M in underperforming assets
- Raise rates through a Special Variation application to IPART
- Reviewing current fees and charges
- Finding new revenue sources – paid parking at beaches is one option being explored
Addressing community concerns
We have been listening to our community and have a strong commitment to answer your questions, respond to concerns and provide transparent and timely information.
During recent community consultation on the special rate variation, we received a lot of feedback and questions, which are addressed below.