Central Coast Council’s financial crisis is over, says Administrator Rik Hart, with a budget surplus of more than $70M nine months into the current financial year.
The end of Quarter 3 financial report presented to the May 24 meeting covers the period from January 1-March 31.
It shows a year-to-date surplus of $176.1M (including capital grants and contributions), as opposed to an expected surplus of $122.9M, plus an extra $24.8M from asset sales.
At the end of Quarter 3 the overall performance against the Operational Plan actions and targets shows 8 out of 67 actions are completed and 37 are on track for delivery by the end of the financial year.
One is on hold and two have been closed.
The remaining 19 are delayed, with the majority of these KPIs impacted by the NSW Public Health Orders for COVID-19, weather and a subsequent increase in customer requests.
Council CEO, David Farmer said a number of factors were contributing to the forecasted year end surplus.
“We have had tight reins on our financial management while we have been waiting for the outcomes of two IPART submissions, for ordinary rates and water, sewerage and stormwater drainage prices,” Farmer said.
“With both these determinations being made in just the last month, we now have a clear sight of Council’s long term financial position.
“Before that, we could not take for granted what Council’s revenue looked like for the next few years and responsibly reduced spending in some areas to account for this uncertainty.
“While we are currently performing better than budget, we have a high level of position vacancies, and we know this is causing difficulty in our delivery of services to our customers in a number of areas.
“Additionally, the delivery of some projects have been impacted by interruptions due to NSW Public Health Orders for COVID-19, materials shortage and wet weather; all contributing to reduced spending in some areas.
“Now that we have longer-term stability in our revenue, we can carefully reinvest these funds in the best ways to meet our community expectations of service delivery.”
Hart confirmed the forecasted surpluses would contribute to repaying the emergency loans over the next 10 years.
“I assure the community that the financial crisis of Central Coast Council is over,” he said.
“We have achieved one of the most significant financial turnarounds of any organisation in under 12 months.
“We put in place a financial recovery plan and have met all milestones and targets … our task now is continuing our 10-year long-term financial plan that provides financial stability for the organisation.”
Source:Interviews and Media release, May 24, 2022, Central Coast Council
The financial crisis is over because the Administrator and his senior management team have received hundreds of millions of dollars in ratepayer bailouts.
It has nothing to do with fixing the underlying causes of the crisis which lay in poor management, weak culture, and low productivity.
Mr Hart has admitted publicly many times he only needed $110M from rates to repay the loans from the financial crisis – the rest coming from asset sales. Yet he has fleeced ratepayers out of about $700M over the next ten years in combined increases to general and water rates.
This means that, without these massive ratepayer bailouts, Mr Hart and his management team would still still be racking up large deficits.
Mr Hart also appears to not understand the definition of productivity when he uses anecdotal examples to claim improvements.
Productivity is defined in economics as output per employee.
Even after Last year’s downsizing (which included hundreds of vacant posts existing only on paper), Council has approximately the same number of employees as it had before the merger (approx 1900). Yet, services are fewer and worse. So the same number of people are producing less – the very definition of lower productivity.
Now Council coffers are awash with ratepayers’ money we will no doubt see another hiring spree.
Given the absence of credible prioritisation in Council’s latest strategic and delivery plans, it is unlikely these new resources will be allocated strategically to community priorities – thereby dragging productivity down further.
Just as Mr Hart’s original downsizing – 15% across the board – also paid no attention to prioritisation. How many of these roles will now be re-recruited despite ratepayers having formed out expensive redundancy costs?
The financial crisis may well be over (for now) – how could it not be after such massive ratepayer funded bailouts? The underlying causes of the crisis, however, remain.
So the administrator will be having council elections cancelling the water rate rises and getting the myriad of deep potholes around the central coast fixed without delay
Ha ha ha not likely
Unbelievable
These people have no idea
They raise our fees and reduce services to zero whilst taking huge payments for spruicking absolute BS, obviously the administration cannot do any better than the mob they replaced
Yeah, whatever……So, now can we expect you to reduce our rates and not go ahead with the proposed rise in our water rates? No? Why not? You are bleeding us dry. What a poor excuse for a Council and Administrator!
OK good
Now repair council responsible roads.
Not just fix the potholes but properly re build them.
Developers are only doing half the job if there is no development on the other side of the road it doesn’t get done??
Come and drive Virginia Rd at Hamlyn terrace and you’ll know what I mean.
Disgraceful.