Central Coast Council is forging ahead with financial recovery and will lodge a submission with the Office of Local Government on why councillors should not be suspended and replaced with an administrator.
Council will defend its case in a 16-page submission lodged on Wednesday, October 28, following an announcement by Local Government Minister, Shelley Hancock, that she intended to dismiss councillors and appoint an interim administrator.
The move followed two weeks of extraordinary Council meetings and requests to the Minister for help, after Council announced on October 6 that it was facing a cash crisis and an $89M deficit.
On October 20, Council reiterated its request to the Minister asking for approval to access restricted funds so it could pay more than 2,000 staff members, prompting an offer from businessman, Tony Denny, to lend the Council $5M so it could meet payroll.
The Minister responded by saying the Government would advance Council $6.2M to meet payroll expenses and overdue payments to suppliers, but that she would issue Council with a notice of intention to suspend it and appoint an interim administrator.
While Council worked on its submission appealing such a move, it forged ahead with a forensic audit and its 100-Day Action Plan to financial recovery.
In another shock move, Mayor Lisa Matthews publicly announced her loss of confidence in Council CEO, Gary Murphy, in the wake of revelations about long-term, structural problems with Council’s finances.
The Mayor said councillors had been provided with inadequate information about the financial position of Council and discovered the full extent of the problem only when it was revealed that Council would struggle to pay its own staff.
“In light of the long-term problems that have been allowed to grow unchecked within the operational division of Council, the only course of action now available is to insist on a new CEO to manage the day to day operations,” Cr Matthews said.
Cr Matthews acknowledged the commitment of $6.2M to cover immediate expenses but said she was disappointed that despite repeated requests for meetings to discuss Council’s financial situation, there was no response from the Minister.
“I can assure the Minister that we are addressing our financial issues,” she said.
The United Services Union (USU) welcomed the announcement that the government would advance $6.2M to cover immediate commitments, including payroll, but USU General Secretary, Graeme Kelly, said that it was outrageous that Council had issued a public threat to not pay staff.
“Refusing to pay the wages owed to staff is nothing short of reprehensible,” Kelly said.
“It is absolutely outrageous that Central Coast Council thought they could use this threat as some sort of bizarre bargaining chip.”
Meanwhile, Coast politicians from both sides of the divide have weighed in with opinions on just how the largely Labor dominated Council has racked up such a huge deficit in three years.