The State Government will not bail Central Coast Council out of its financial hole and there will be no legislative exemptions, which effectively puts the kybosh on any attempt by Council to access restricted funds in addressing its cash crisis.
Among a range of decisions made in an emotion charged meeting on October 12, councillors resolved to look at borrowing $100M either from restricted funds or external sources to help mitigate liquidity problems.
Permission to access restricted funds, which could include developer contributions, domestic waste management funds and unrestricted cash within the water and sewer funds, would need to be obtained from the Local Government Minister.
The meeting, which lasted for more than six hours saw councillors hone in on the financial mess Council confessed to being in on October 6, with the deficit set to blow out to $89M.
Mayor Lisa Matthews said acting CEO Jamie Loader would write to the Minister for Local Government seeking urgent assistance.
“Council has been in daily contact with the Office of Local Government and we expect the arrival in the coming days of a financial expert and human resources adviser, as outlined by the Minister for Local Government last week,” Cr Matthews said.
She said a specially formed Finance Committee would comprise all 15 councillors, the Office of Local Government appointed expert and adviser, and an independent legal adviser, and would oversee a forensic internal audit and Council’s 100-Day Action Plan to financial recovery.
“I am committed to finding a solution and moving forward,” she said.
But Parliamentary Secretary for the Central Coast and Member for Terrigal, Adam Crouch, announced on October 14 that the community expects councillors and Council staff to do their job, balance the books and provide services to local residents and no help from the State Government would be forthcoming.
“Under the Local Government Act, councils are independent, autonomous bodies with many statutory responsibilities in serving their communities and that includes sound financial management,” Crouch said.
“It’s been over a week since Central Coast Council found out about its financial dire straits and all it has done is write a letter and set up yet another Finance Committee.
“Council’s so-called 100-Day Recovery Action Plan has not even been published for the community to see.
“I have spoken extensively with the Minister for Local Government and the Government will not be strong-armed into taking responsibility for Central Coast Council’s failings – there will be no State funding or legislative exemptions.
“The NSW Government will not bend the rules for a council that has fundamentally failed to do the job the community expects them to do.”
Crouch said the Council’s Audit, Risk and Improvement Committee has the knowledge, skills and experience to advise councillors.
“This Committee – which is already in place and has extensive knowledge of the Council – has independent experts with extensive financial and human resources skills,” he said.
Crouch said the Office of Local Government had written to the Committee’s independent chairperson Dr Col Gellatly to request that he play a key role in advising councillors.
Cr Troy Marquart said common sense had driven the Government’s decision.
“Why would any responsible entity offer financial assistance to a Council that has such a poor track record in regards to spending other people’s money?” he said.