It is heartening the administrator and CEO are so satisfied with the financial situation of the Council (“Audited financial reports for 2020-21 are qualified and fail three benchmarks”, CCN335), given there was an operating loss of $70M for the year.
It is particularly gratifying to hear the operating loss would have been ONLY $40M had it not been for staff restructuring costs, although one wonders how long a prudent organisation can go on making losses of $40M a year, without building up a debt load that is unsustainable.
Incidentally, it would be interesting to know where $30M went in “restructuring costs”. To the average person, such a sum might seem inexplicable, since it doesn’t seem possible to note any change in the organisation to account for it.
The three benchmarks Council has failed to meet are the Operating Performance Ratio, the Debt Service Cover Ratio and the Rate and Annual Charges Outstanding Ratio, which doesn’t speak well for the efficiency of management in the period we have been under administration.
It is worth mentioning, as well, that the Unrestricted Current Ratio has only been corrected by the borrowing of an additional $150M, which is, no doubt, a clever accounting device but doesn’t really address the problem, merely adding to the Council’s repayment and interest bill.
Our masters are “optimistic that Council would be on top of things by the end of this financial year”, ie. in three months’ time, so let us withhold judgement for another 90 days and see whether this optimism is justified.
However, the good news must be that there should be no obstacle to holding a Council election before the end of the year.
As an aside, ratepayers might wonder why it takes nine months to produce the annual accounts. We are well past the period of Dickensian clerks scribbling in ledgers: a proper accounting system should be able to produce results virtually in real time.
In fact, if that can’t be done, what possible reliable monitoring can be carried out of the Council’s operations through the year?
We should, at the least, have quarterly updates of performance: organisations many times the size of a puny city council are able to do this, so it is clearly possible.
If we have been saddled with a system that can’t cope with a modern information flow, there should be some investigation of how this was allowed to come about.
Email, Mar 27
Bruce Hyland, Woy Woy