Office of the Administrator Media Release - Administrator delivers damning report of Council's financial mismanagement - 2 December 2020
Wednesday, 2 December 2020
Central Coast Council Administrator, Mr Dick Persson AM has today delivered his 30-Day Interim Report at an Extraordinary Meeting of Council.
Mr Persson said this report provides the community with a picture into the history of how poor financial decisions and catastrophic budget mismanagement has led Australia’s 6th largest council to the situation they find themselves in today.
“The financial crisis confronting the Central Coast Council is very serious. Council’s operating loss for the current financial year is on track to be in the order of $115m, this follows last year’s loss of $89m,” Mr Persson said. Since amalgamation: • Accumulated losses have reached $232m • Debt has risen from $317m to an estimated $565m • Staff numbers have increased by 242 • Restricted reserves of around $200m have been used unlawfully to fund Council opportunities and capital works.
“It will take urgent and strong action to turn things around. Tough decisions need to be made immediately”, said Mr Persson.
Mr Persson outlined a series of measures to achieve the necessary turnaround: • Significant asset sales of a least $40m over each of the next two years; • Further borrowings; • A substantial rate increase; • An increase in some Council charges; • A major reduction in Council’s senior and middle management numbers; • A reduction in staff numbers to return to the level at the time of amalgamation.
“The Council’s rapid financial decline is due to several matters, with most of them not directly related to the amalgamation.
“Managing the Council’s financial position is the number one job of the CEO and CFO. It is clear the CEO was either unaware of the looming crisis, or simply failed to adequately respond. Either way the performance of the CEO was unsatisfactory.
“Council, in their role as the Governing Body, also shares that financial responsibility. They also failed in this regard.
“Central Coast residents have been badly let down by their Council and widespread anger over the Council’s performance is totally understandable.
“On behalf of the Council, I acknowledge the hardship these actions will cause and sincerely apologise for the real impact this financial mismanagement will have on all residents and ratepayers.”