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Backgrounder for those who haven’t kept up
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1/ We still have to front up on local government election day on September 4 despite not having candidates to elect to council.
We are expected to vote on a referendum tailored for the Central Coast, the brainchild of interim administrator Dick Persson and supported by current administrator Rik Hart.
2/ The referendum asks you if you want to have three wards – we currently have five wards – and if you want 9 councillors – we currently are allowed to have 15.
I say “allowed” because 13 councillors are suspended and two resigned two days before they could be suspended.
3/ The councillors were suspended in October 2020 – not sacked. They were suspended for three months initially and then another three months.
Rather than allow them back in April of this year, the State Government followed the Local Government ACT and organised an independent Public Inquiry to look into the role of the councillors in the financial mismanagement of council.
4/ The Commish of the Public Inquiry has not yet said a word publicly. We have no idea what’s going on there. Public submissions closed on June 21.
5/ The financial mismanagement became public when the council announced in October 2020 that it had sudden and substantial liquidity issues – in other words it was having cashflow problems to such an extent that it thought it might not be able to pay staff.
The State Government stepped in with a cash advance and a promise to help. That help eventuated in the form of administrator Dick Persson brought in to replace the councillors who were suspended (as above). Today we still have an administrator. His name is Rik Hart.
6/ The financial mismanagement comes down to two arguments.
a/ Argument one is that the councillors were spending like drunken sailors.
The council started with a debt of $317M. The council was run by an administrator until September 2017.
Once the councillors came on board, the council started running ever growing deficit budgets.
It had a growing number of increasing costs including staffing numbers and the capital works program.
How was it going to pay for this?
b/ Argument two is that the council was dudded from the start – which was 2016 when the former Wyong and Gosford councils amalgamated.
The council started with a debt of $317M. The council was run by an administrator until September 2017.
Once the councillors came on board, the council started running ever growing deficit budgets.
It had a growing number of increasing costs including staffing numbers and the capital works program.
How was it going to pay for this?
The funds it was spending to potentially cover these deficits turned out to be “restricted funds” which by law can only be used for the projects the money was intended for.
c/ Argument three is the truth. This has not yet been aired but it will eventually, one hopes. In the meantime, everyone’s a critic.
7/ All that aside: the upshot is that council’s debt grew from $317M in 2016 to about $565M in 2021 (which includes a loan of $150M about to be mentioned…).
8/ The administrator said the debt was not sustainable and severe cuts had to be made to get rid of about $200M of that debt – most of which was external restricted funds that had to be repaid.
The administrator signed us up for a loan of $150M. (Actually two loans: one for $100M and another for $50M.)
9/ So, rates have gone up by 15 per cent to help cover loan repayments; some $60M of council assets are up for sale; about $40M internal restricted funds have been or will be written off; staff have been cut by about 300 real people, some of them friends or friends of friends; some services have been cut back and potholes will take longer to be filled.
That is the story in a nutshell.
So, yes, remember to vote at the referendum on September 4 or risk a fine.
As to how to vote – that’s a whole other giant pothole that has yet to be filled.
-Merilyn
This website is run by journalist Merilyn Vale and is not associated with Council.
