The Minister for Local Government should take whatever action is necessary to prevent the return of the suspended Central Coast councillors, says Administrator Dick Persson.
Persson wants to see the September election delayed to allow a formal inquiry to determine what is needed to achieve a successful merger of the former Wyong and Gosford councils, as opposed to a public inquiry into the financial situation.
“I’m calling for an inquiry but not for the reasons others might think,” Persson said as he handed down his final report.
“We know what happened here and my two previous reports provide this detail, there is nothing more to uncover.
“I encourage the community not to fall for the politicking of this issue.
“I believe such an inquiry (as I have suggested) would have far greater community support than an inquiry that would be used by competing political actors trying to blame each other for what occurred.
“We know what occurred, it is now time to look ahead and help ensure the success of the sixth largest council in Australia.”
Persson also recommended new CEO David Farmer consider going to market to buy a new simplified IT system.
He said it was clear the massive spend of $60M since the merger on an IT system was poor in comparison to what other councils had secured at much lower cost.
Persson handed down his final report at an extraordinary meeting on Thursday, April 15, having already delivered it to Local Government Minister Shelley Hancock.
He said his investigation concluded that by far the biggest reason the Council became insolvent was due to mismanagement of the budget over the years following the merger and leading up to the councillors’ suspension.
“There is pressure by many to hold a public inquiry into what went wrong here,” he said.
“With due respect to those people, (acting CEO Rik) Hart and I have investigated what went wrong and published those findings.
“Many of those calling for a (public) inquiry don’t like my conclusion because I have made it very clear the financial collapse is not due to the local government amalgamation.
“I have formed the view that the merger of the Gosford and Wyong LGAs was always going to be one of the harder ones, and that it was well short of completion when councillors were elected.
“It is very clear that the new Council had little interest in continuing the hard work of achieving efficiencies and using those savings to expand the delivery and quality of services.
“Instead they embarked upon a program of expansion of both capital and recurrent programs with no attempt to establish how they were going to be paid for.”
Gosford and Wyong Councils were merged in May 2016, and the new Central Coast Council was under administration until September, 2017, when the councillors were elected.
The councillors were suspended in October 2020, when it became public the Council faced sudden and serious liquidity issues and was in danger of not being able to pay staff.
It later emerged the Council had been using unlawfully restricted funds for operational purposes.
Persson said the use of restricted funds was not unimportant but it was also not the reason the budget blew out.
“Even if those in charge thought those funds could be used for their expanded spending; they must have known they would eventually run out,” he said.
“To use them for capital spending was one thing but to use them to prop up a rapidly deteriorating bottom line is inexcusable at best and negligent at worse (sic).”
Persson outlined various reasons in his final report as to why Council should remain in administration, most notably that the merge of the two former Councils was incomplete.
“I believe the best outcome for Central Coast Council and the community would be a further extended period under administration; this would allow the new CEO, Mr Farmer, and a new Administrator adequate time to complete the merger and rebuild community confidence without the distraction of elected representatives intent on playing out broader political agendas,” he said.
“Should the Minister decide to allow the councillors to return prior to the September election, I recommend Performance Improvement Orders are put in place, including the appointment of a financial controller, and I recommend that person be Rik Hart.
“My final report was provided to the Minister for Local Government earlier in the week; we now await the Minister’s decision on the future of the suspended councillors.”
The Minister confirmed she had received the report and would now carefully examine its findings and recommendations.
“I will now determine the future of the Council taking into consideration the interim administrator’s final report, his two earlier reports, the views of the local community and advice from the Office of Local Government,” Hancock said.
“To ensure stability for the community I will announce my decision prior to the expiration of the current interim administrator’s term on April 29.”