$20M identified as no longer necessary to support community needs

Central Coast Council has agreed to a $20M write-off of internally restricted reserves that are “in excess of requirements” to meet community infrastructure needs.

The money will come out of four reserved funds.

They include almost $10M earmarked for land development and, in particular, Gosford Library.

Council said that updated funding for the Gosford Regional Library required $12.2M of internal reserves funding in addition to $8.5M from Development Contributions and a $7M Federal Government Grant.

About $11.6M of this $12.2M is held in the Regional Library Internal Reserves, meaning that only $600,000 is needed from the Land Development Reserve.

Therefore $10M will be written-off this reserve as it’s in excess of immediate needs.

A total of $4.7M will be written off from the Infrastructure Reserve.

Council said that this was a reserve from 2014 from the former Gosford City Council.

“There are no plans for immediate works to be funded from this reserve and, as a result, it is proposed to be written off in its entirety,” a Council report stated, which was adopted at the March 23 meeting.

A total of $316,223 will be written off from the Water Safety and Surf Clubs Reserve.

Council said this was a reserve from 2017 from the former Gosford City Council.

“There are no plans for immediate works to be funded from this reserve and, as a result, it is also proposed to be written off,” Council said.

“Water Safety and Surf Clubs will continue to be serviced as part of business as usual.”

Kibble Park Cafe, Gosford reserve fund of $182,662 will be written off in its entirety.

This is a reserve from 2016 from the former Gosford City Council.

An amount of $4.8M from the Waste Disposal Facility Reserve will be written off.

“Waste disposal facility costs could be further supported from the externally restricted Domestic Waste Management Reserve,” Council said.

“The proposed amount represents a 17 percent reduction of the reserve and is an amount that is deemed not detrimental to meeting the community’s needs in due course.

“This write-off is also reflective of the fact that the Waste Fund is significantly subsidised by the General Fund.”

The report says that Council consulted the Office of Local Government, external auditors, and a “primary lender”.

Council Director Corporate Affairs, Natalia Cowley, assured the community that they were not missing out by this change.

“Detailed reviews have found that a number of these internal reserves have been identified as no longer necessary to support community needs or are in excess of the amounts required to meet community needs,” she said.

“The $20M write-off is of value to the community as it will contribute towards the reimbursement of approximately $200M of restricted reserve debt.”

The extent of Council’s accumulated debt is $565M, made up of about $365M of projected commercial debt as at June 30, 2021 and about $200M of restricted reserves debt as at June 30, 2020 in the General and Drainage Funds.

Council proposes to reimburse the restricted reserves deficit with about $100M-$110M from Council’s budgeted surpluses over the 10 years, starting from 2021/22; $40M-$60M from the sale of Council’s property assets; more write-offs up to $40M from the write-off of reserves that can be unwound, and a commercial loan in the 10th year for any remaining restricted debt balance.

Merilyn Vale