Central Coast Council is drawing up a list of assets worth more than $30M to sell, as it works through a list of strategies to address a growing deficit.
Administrator, Dick Persson, said that the list of assets would be made public before any sales decisions were made, and that they would be part of a raft of suggestions that would be included in his report that he promised on day one and would be public in 30 days.
He is still on track to make the 30 days.
The challenge would be to present, in plain English, how the Council arrived at the financial situation it is now in.
He said the narrative would start from two years prior to amalgamation to present day.
He told Central Coast Newspapers that the financial situation was arguably worse than thought.
“The cash management has been appalling.
“I can’t see how Council couldn’t see it coming,” he said.
Persson said asset sales would not involve community land or environmentally sensitive lands such as COSS lands, but would “more likely” mean buildings.
The decision to identify the assets was made at the Administrator’s first Ordinary Council meeting on November 9.
At that meeting, Persson introduced the Council’s new Chief Financial Officer, Natalia Cowley, who started in November, and spoke briefly about the work being done to address Council’s financial position, including daily monitoring of cash, payments and restrictions, and communication with suppliers.
The Council flagged in early October a more than doubling of its expected deficit and immediate liquidity problems.
Her comments echoed a financial update report submitted to the meeting, which detailed the actions, including the 100 Day Recovery Action Plan, now being called the Business Recovery Plan.
“Progress has been made on identifying and mitigating the key causes for the situation that council finds itself in,” the report said.
The report explained that a review of internal allocations between different funds had found $7M that could be re-allocated from the general funds to the Waste, Water and Sewer funds.
However, the forensic audit was ongoing and includes analysis of expenditure from the 2016/17 financial year to date.
Consultants KPMG expect the first phase of their engagement, mainly information gathering, to be completed by Friday, November 13.
Historical analysis would take another six to eight weeks.
Due to the second phase deliverable being impacted by the Christmas period, it is expected that the historical analysis findings will be available mid to late January 2021.
Meanwhile, senior management provided a summary of savings identified and actions completed to date.
Some of the major savings have been from a review of overtime, cuts to the capital expenditure program and the temporary workforce.
An overtime reduction strategy has produced favourable results, with some weeks rendering a 40 percent reduction on the historical average trends, the report stated.
A review is underway of current staff benefits to model different scenarios for cost saving.