[Updated article] Several submissions to the Public Inquiry into Central Coast Council have asked why Local Government Minister, Shelley Hancock, never delivered on the assistance she promised the day the Council realised it faced immediate and serious liquidity issues last October.
But the Office of Local Government (OLG) told Coast News this week that it stands by its “swift and decisive action in response to the crisis”.
On October 6, 2020, Minister Hancock instructed the OLG to appoint an independent financial expert and a Human Resources (HR) adviser to ascertain Council’s true financial position and to identify options to address the issues as quickly as possible.
The two experts never arrived.
On October 12, the Councillors agreed to ask the Minister for permission to use restricted funds to maintain Council’s cash flow.
It reckoned it needed up to $60M to cover costs while the 100-day recovery plan did its work.
Council had more than $360M in restricted funds that were invested but only the Minister could approve spending it for unrestricted purposes.
The Councillors also asked the Minister for confirmation on the timing and scope for the arrival of the financial and HR experts.
Three Liberal councillors – Jilly Pilon, Troy Marquart, and Rebecca Gale – and two independents – Greg Best and Bruce McLachlan – voted against these decisions.
Their own notice of motion later in the meeting, which eventually was also adopted, asked for the OLG, the Audit Office and the Minister to step in and assist Council.
Member for Terrigal, Adam Crouch, issued a press release on October 14 saying the State Government would not bail out the Council.
“I have spoken extensively with the Minister for Local Government and the Government will not be strong-armed into taking responsibility for Central Coast Council’s failings – there will be no state funding or legislative exemptions,” he said.
He said the OLG had written to Council’s Audit, Risk and Improvement Committee’s (ARIC’s) independent chairperson, Col Gellatly to request that he play a key role in advising Councillors.
On October 19, the Councillors unanimously adopted their 100-day plan.
On the same day Mayor, Lisa Matthews, requested an urgent meeting with the Minister. She received no response.
On October 20, the Councillors met again and resolved to make “urgent representations” to the Minister seeking permission to use restricted funds to pay staff for the week saying that “should the Minister’s permission not be forthcoming, 2,157 Council staff may not be paid”.
On October 21, the Mayor again requested a meeting with the Minister.
Again she got no response.
The Minister issued a press release on that day which said the local community was sick of excuses from Council.
“In the two weeks since Council’s financial dire straits came to light, all Council has done is write letters, issue media releases and set up a finance committee,” she said.
“To use its own staff as bargaining chips is reprehensible from a governing body that has failed to address its own financial failings.
“There is no question that Council needs to be held responsible for these failures.
“That’s why today I will begin the process of suspending the Mayor and Councillors for their role in this sorry state of affairs.”
Her press release did not address the question Council had been asking: specifically for permission to use restricted funds.
The Minister did release early to the Council funds it was due to receive later in the year.
By then, Council’s acting CEO had advised Councillors that funds were available to pay current wages in a lawful manner – contrary to previous advice.
On October 26, the Councillors met for what would be their final time before being suspended.
Mayor Matthews informed the meeting that Liberal Councillors Troy Marquart and Rebecca Gale had resigned.
Five Councillors wanted to accept “the minister’s offer of suspension/administration”.
They were Liberals Jilly Pilon and Chris Burke and independents Chris Holstein, Greg Best and Bruce McLachlan.
They also requested the Minister maintain the democratic process and not penalise the community but allow them the opportunity to elect a new Council at the scheduled 2021 local government elections.
They didn’t have the numbers and the Council resolved to work on its submission on why it should not be suspended.
It was submitted by close of business on October 28.
Two days later, on October 30, the Minister suspended the Councillors.
More than one submission to the subsequent Public Inquiry into the Council asked why the Minister appeared ready to help the Council on October 6 and yet that help never came.
And why by October 30, without ever having a conversation with the Mayor, the Minister suspended the Councillors.
Administrator Rik Hart recently explained that he too had trouble contacting the Office of Local Government and getting meetings with State Government Ministers.
A press statement was sent to Coast News attributed to an unnamed spokesperson for the Minister.
It confirmed that Hancock, through the Office of Local Government, requested the Council’s ARIC, chaired by Gellatly, provide further advice to cCouncillors in mid-October 2020.
“After initial assessment, the enormity of the financial issues became clearer and it was obvious the Council would not be able to address these matters itself even with the help of a financial expert and a human resources adviser,” the spokesperson said.
“In fact, the proper and effective functioning of the Council was at significant risk, especially when it was unable to pay its staff, which required the advancement of millions of dollars and greater intervention by the NSW Government.
“As a result, the Minister for Local Government took action to suspend the Council and appoint an expert administrator, who brought in a highly-experienced acting general manager, to provide the skills and knowledge to properly identify the issues and start the process of addressing them.
Shelley Hancock MP Minister for Local Government
“The Minister then took the further step of commissioning a Public Inquiry, in addition to an extended period of suspension and administration, to provide an independent, open and transparent process to examine the issues and make recommendations for the future of the council.”
Merilyn Vale