Central Coast Council’s total debt is now down to $326.7M, Administrator Rik Hart revealed at the March 22 Council-under-administration meeting.
Hart said that Council had paid back the restricted reserves debt and had also paid down “a bit” of other debt.
He said that subject to the Independent Pricing and Regulatory Tribunal (IPART)’s two determinations, things were looking good for the organisation.
Council is awaiting two IPART final determinations in May.
One will rule on Council’s request to keep the general rates at current prices for ten years instead of three years and the second determination is about increasing water and sewer rates by 34 per cent.
“We have unrestricted cash of about $60M now,” Hart said, comparing it to the debt at the height of the financial crisis in October 2020 when the Council admitted it had immediate and substantial cash flow issues.
The councillors were suspended and the incoming interim administrator Dick Persson forecast in November 2020 that the Council would be in debt to the tune of about $565M by the end of the 2020-2021 financial year.
That included about $200M in restricted funds that were spent without Councillor or Local Government Minister approval.
But that forecast also included long term loans the new council inherited and $150M in new loans the administrator received in December which ended up being used – partly – to pay back the restricted reserves and partly to pay for staff redundancies in the ensuing restructure to cut costs.
Speakers at the public inquiry queried the actual level of Council debt, with some saying it was never more than $440M even at the height of the crisis.
As at June 30, 2015 the former Gosford Council was noted as having $155M in loans outstanding and the former Wyong Council was noted as having $178M in loans outstanding (total $333M).
The amalgamation of the two councils into Central Coast Council in 2016 saw the new council saddled with those debts which had dropped to $317M by merger and the new Council, which started life with less than $5M in unrestricted cash to play with, continued to pay them down.
Since the height of the crisis, Council has sold off assets worth about $60M and expects another $30M to come once further assets, including the Gosford Council chambers building in Mann St, Gosford, are sold.
The 2022 current debt level was revealed when Hart publicly explained a previously confidential item in the March 22 agenda about a $12M balloon payment. A balloon payment occurs when interest repayments are lower than the actual repayment needed to cover the loan so it “balloons” out.
Hart said the decision on the balloon payment could be made public but not the actual documents.
Council will use $7M from the sewer fund and will borrow more than $5M to pay the $12M.
Merilyn Vale