Deficit $28M less than last financial year

Central Coast Council Photo: Justin StanleyCentral Coast Council Photo: Justin Stanley

The 2020-2021 financial year was much less catastrophic for Central Coast Council than anticipated when Councillors were suspended last October, according to the draft financial report presented at the August 24 Council meeting.

Administrator, Rik Hart, who was acting in the position of Chief Executive Officer from November 2020 until the end of April 2021, said the final operating result was a deficit of $60.7M as opposed to the forecast $115M deficit predicted by Hart and former interim Administrator, Dick Persson.

The draft financial reports show an improvement of $28.1M on the actual deficit of $88.8M achieved by the Council for 2019-20.

Hart said employee costs for the financial year were only $21M over budget.

Prior to the Council meeting Hart and CFO Natalia Cowley presented a preview of the results to CCN including an overview of the Council’s finances from prior to amalgamation to the present time.

The $206 million of employee costs shown in the draft annual financials excluded $16.2 million redundancy costs because of the way such costs must be accounted, he said.

“Four weeks’ pay in lieu goes on the Profit and Loss [statement] but long service leave and accrued entitlements sit in the balance sheet and are funded from internal restricted reserves,” he said.

In other words, total redundancy costs incurred by Council in the 2020-21 financial year were around $30M.

Pre-amalgamation the average employee costs for the combined councils were $162 million for around 1961 Full Time Equivalent (FTE) positions.

Hart said that FTE number grew to 2585 and is now back to 1893 which is below the pre-merger average.

The redundancies were one requirement of the $100M bank loan negotiated by Hart and Cowley in the weeks before Christmas 2020.

The Administrator said he wished to remind the community that only one major bank would consider lending the council money.

He recalled having meetings with that bank’s entire risk team but said the state government did not respond to his requests for a statement or letter of support to reassure the bank that the government was aware of the situation.

Hart said, Tim Hurst, the head of the NSW Office of Local Government didn’t answer his mobile when Hart called in desperation to get the letter of support.

He fortunately had the mobile number of the Minister for Planning, Rob Stokes, who did answer his call and arrange the letter needed to secure the loan.

Out of the eight people on the bank’s risk management team, only three would support the proposal, Hart revealed, “which is why I am so passionate about continuing the rate increase,” he said.

The draft report will be forward to the NSW Audit office for review.

Jackie Pearson

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