Labor MPs strengthen their call for an Inquiry into Council problems

The four Labor MPs on the Central Coast have individually given notice in State Parliament that they will each be putting Motions at the next sitting of Parliament in March calling for an independent inquiry into the financial collapse of Central Coast Council.

The MPs David Harris, Yasmin Catley, David Mehan and Liesl Tesch want Local Government Minister, Shelley Hancock, to establish an inquiry to examine the financial position of the former Wyong and Gosford Councils pre-merger, factors post-merger and the role of councillors and the executive.

Harris said that we now know why the financial difficulties happened, but now it is about the structural weaknesses of Council and the problems that it has faced since amalgamation.

Catley said the “triple whammy” of service cuts, staff layoffs and rate increases showed that there was a structural problem underpinning the Liberals’ decision to amalgamate the two councils.

Administrator, Dick Persson, has previously said that amalgamation costs were not one of the major contributing factors to Council’s financial difficulties.

Harris said that one of the causes is because Central Coast is one of the largest councils in the state and the only Council in the Illawarra, Sydney and Hunter that operates water and sewerage in-house.

“A lot of the cost over run and the debt is actually related to water and sewerage,” he said.

“If you separate the figures for water and sewerage instead of combining them with general operations, it actually paints quite a different picture.

“Most of the $317M debt that was carried over was water and sewerage debt.

“The water and sewer should be set up as a separate business.

“It can still be within Council, but the financials and assets would be separate, like it used to be under the Joint Water Authority,” Harris said.

He said that Wyong used to have its water department and Gosford had its own, and there was a Joint Water Authority, but when they merged the councils, they brought it all under one roof.

“I’ve written to the Administrator asking some questions about how the water and sewerage fits in with the puzzle because if you go through the financials when they had the overrun it was all water related, such as $1.3M added for a generator at Mooney and the Mardi to Warnervale water pipeline, which were included in the general Council figures.

“They are very major projects, but they’re water and sewerage related, and other councils don’t have those costs in their books because Sydney Water and Hunter Water do that.

“This isn’t saying that it should be privatised or anything like that, but the general Council accounts and the water and sewerage accounts should be split so that the residents can actually see the two separate operations.

“The Administrator in his report said that Council’s bank account took a hit because of the IPART decision on water and sewerage, a loss to Council of $39M.

“Water should pay for itself, so that it’s not a $39M hit to general revenue, and the charges for water should cover that,” Harris said.

Sue Murray