Council has taken and continues to take a number of actions to address its serious financial situation and ensure its ongoing financial sustainability.
Decisive action is needed to address an accumulated debt of $565M, which included accessing restricted reserve funds without the necessary permissions. For the 2020-21 financial, Council is forecasting an operating loss in the order of $115M. This follows a loss of $89M in 2019-20.
Actions in Council’s Financial Recovery Plan include:
- Reduced capital works program – $170M in 2020-21 compared to $242M in 2019-20.
- Reduction of general expenditure on materials and contracts – estimated ongoing savings of $20M from 2021-22.
- Organisational restructure and reduction in staff numbers – staff numbers have been reduced to pre-amalgamation levels (from over 2,500 to under 2,000) to save $30M. The restructure included reducing the number of Executive Directors from nine to five and the number of senior and middle managers from 39 to 26.
- Sale of assets – assets surplus to Council’s needs have been identified and can be sold to generate an estimated $60M.
- Special variation (SV) rates increase of 15 percent – the Independent Pricing and Regulatory Tribunal (IPART) approved the SV rates increase for three years. This temporary one-off increase is inclusive of the rate peg and will provide $22.9M in additional income for the 2021-22 financial year.
- Reduced service levels – some services and projects have been delayed or deleted from Council’s Delivery Program and Operational Plan.
- Review of fees and charges – minimal changes to fees and charges.
- Bank loans – Council has secured two bank loans from major banks – one for $50M and the other for $100M.
- Finding new revenue sources – paid parking at beaches is one option being explored.
More information on the reasons for Council’s financial situation and solutions are outlined in the Administrator’s reports.
- 17 May 2021 – Independent Pricing and Regulatory Tribunal (IPART) approved a 15 percent Special Variation (SV) rates increase for the Central Coast for three years.
- 13 May 2021 – Rik Hart commenced as Administrator of Central Coast Council.
- 11 May 2021 – Council resolved to hold a Constitutional Referendum on 4 September 2021 to ask the community if they are in favour of reducing the number of Central Coast Councillors from 15 to nine, resulting in a reduction of Wards from five to three.
- 26 April 2021 – The NSW Government announced a public inquiry into Central Coast Council's financial situation and determined the terms of reference. Administrator, Mr Dick Persson AM welcomes the announcement.
- 15 April 2021 – Administrator releases his final report to the community on 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.
- 12 April 2021 – new CEO, Mr David Farmer commences and Mr Rik Hart (Acting CEO) and Mr Malcolm Ryan (interim COO) step down.
- 15 March 2021– 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.
- 9 March 2021 – 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.
- 3 March 2021 – Mr David Farmer was appointed the new CEO for Central Coast Council.
- 8 February 2021 – Council resolved to apply to IPART for a 15 percent one-off permanent special rate increase.(Opens in a new window)(Opens in a new window) 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
- 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.
- 3 February 2021 – The Administrator issued a 3 Month Progress Report(Opens in a new window)(Opens in a new window) providing an update on the current situation and progress to date on the Business Recovery plan, with FAQs for the community.
- 8 January 2021 to 1 February 2021 – formal consultation on the rate rise options was undertaken. The results of the consultation can be found here – Securing Your Future Consultation Report 4 February 2021.(Opens in a new window)(Opens in a new window)
- 14 December 2020 – Council endorsed community consultation for a further rate option on for a one-off Special Variation of 13 percent in 2021-22 to remain permanently in the rate base as well as the two percent 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.
- 2 December 2020 – a 30 Day Interim Report(Opens in a new window)(Opens in a new window) was issued 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.
- 30 November 2020 – 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. Recruitment of a new CEO is underway with a planned commencement date of early April 2021.
- 26 November 2020 – Council endorsed the making of an application to the Independent Pricing and Regulatory Tribunal for a one-off Special Variation of eight percent in 2021-22 to remain permanently in the rate base for seven years, which plus the two percent rate peg increase in 2021-22 represents a total rate increase of 10 percent for 2021-22. Council further resolved to undertake community consultation on the application.
- 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.
- 26 October 2020 – Council engaged Clayton Utz 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.
- 16 October 2020 – Natalia Cowley appointed as Chief Financial Officer 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.
- 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.
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|
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 community consultation on the special rate variation, we received a lot of feedback and questions, which is addressed below.