Central Coast Council has seven days to lodge a submission with the Office of Local Government on why it should not be suspended, following an announcement on October 21 by Local Government Minister Shelley Hancock that she intends to dismiss concillors and appoint an interim administrator.
The move follows two weeks of extraordinary Council meetings and requests to the Minister for help, after Council announced on October 6 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.
But 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.
As Council works on its submission appealing such a move, it will forge 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.
She 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 with other statements made by the Minister.
Council will have seven days from formal receipt of the Minister’s intent to dismiss it to make a submission as to why it should not be suspended as required under the Local Government Act.
The Minister must consider any submission before making a final decision.
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 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,” Mr 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 Labor-dominated Council has racked up such a huge deficit in three years.