The directors of four directorates; Governance, Innovation and Futures, People and Culture, and Information Management and Technology have been culled from Central Coast Council as part of cost cutting measures but an extra $70M a year is needed to pour into the Council coffers for it to continue to deliver essential services of roads, rates and rubbish at current levels.
Administrator Dick Persson presented the information in his three-month progress report tabled at the first Council meeting of the year on Wednesday, February 3.
Cutting costs will deliver about 70 per cent of the $70M needed while a rate rise will deliver the rest – if the Independent Pricing and Regularity Tribunal (IPART) agrees to grant one, Persson said.
Meanwhile the work of reducing the number of staff at council continues.
The number of senior staff has been cut from nine to five and the business areas that fell under these Directorates have been moved elsewhere within the organisation.
The Governance Director’s position was vacant as was the IT position and the director of Innovation and Future has left.
HR Services has been incorporated into Corporate Services and the Ombudsman is no longer on the executive leadership team.
Also, the next line of managers have been cut from 39 to 26.
These positions will go as staff leave the business over the coming months.
Persson said the council was meeting its redundancy target.
“People are willing to go,” he said.
The capital works program for this financial year had been cut from $240M to $170M.
Persson said the current shortfall of $70M every year was not sustainable and banks wanted evidence of a plan to reduce costs.
“(Acting CEO) Rik Hart and I had to be at our persuasive best to stop another major bank calling in a $104M loan,” Persson said.
“Mr Hart and I have explored all available options for securing a financial turn-around for the CCC.
“We strongly support an approach which focuses mainly on reducing costs (70 per cent) but also includes a proportion of the necessary funds coming from increased revenue (30 per cent).”
Persson said he, Hart and Chief Operating Officer Malcom Ryan had more than 100 years of experience between them.
“We are of the view we cannot cut any deeper,” he said.
Persson said the team was writing budgets that would see an accumulated surplus of about $113M by the end of 10 years and that surplus would go towards paying down the Council debt but would not allow Council to start any new projects.
The debt stands at $565M even with the loans of $150M that the Council under the Administrator signed up for late last year.
Those loans were factored into the $565M as was $45M to pay for staff redundancies.
The $565M debt includes $317M debt that the amalgamated Council started life with, back in 2016 when the former Wyong and Gosford councils were merged, and was made public in the Administrator’s 30-day report which he urges people to read in conjunction with his latest report.
Persson said that soon, the community will be able to monitor in real time, on the website, how each of the five directorates is tracking in real time to their budgets versus actual spending.
He said the most important thing now was to get a new CEO asap.
If the Minister for Local Government decides the councillors will come back after the second period of three month suspension, he will recommend acting CEO Rik Hart be appointed financial controller.
His powers would override the councillors on all financial matters.
He acknowledged the challenge in communicating to the community the need for a rate rise.
“I can’t get the message to the community strong enough – this is dire,” he said.
Persson said he was happy to talk to residents but warned: “If you come to me with alternatives, we won’t talk if you haven’t read the report.”
It is available on the website.