An Analysis of Central Coast Council Under Administration

FORUM: –

More than two years of Council under Administration have brought higher rates and worse services.

There is little evidence of reforms to improve the efficiency, culture, or productivity of the organisation. Instead, Administrator Rik Hart and CEO David Farmer have taken the easy option to slug ratepayers.

Rate Increases

In July 2021, domestic rates increased 42% in Gosford. This included a 15% special variation initially limited to three years but extended to ten years in 2022.

On top of that, water rates will be 35% higher (plus inflation) by 2025 due to phased increases approved this year.

The 15% special variation was supposed to be temporary to allow the repayment of debt from the financial crisis – but as some of us pointed out at the time the numbers never added up.

Now, pricing regulator IPART, which approved the rate hike after relentless Council lobbying, has confirmed only 41% of the special variation is to pay off debt.

IPART approved the increase on grounds of “financial need,” but apparently cannot say what 59% of it is “needed” for.

We can only conclude that IPART thinks Administrator Rik Hart is no more able to balance the books than were the previous Councillors if limited to the same rates income that was available to them.

It is time Mr Hart finally explained what the bulk of this rate hike is really for if only 41% of it is to repay debt?
Council Services Still Deteriorating. Despite all this extra money, there has been no improvement in Council services.

Wherever you look, for example, IPART’s water utility customer satisfaction survey, or NSW Ombudsman complaints data, performance indicators are bumping along the bottom.

Council’s own Annual Report shows that 40% of 2021/22 Operational Plan targets were missed, although the accompanying media release claimed, “Council Achieves a Lot in Challenging Year.

Spin from the Communications Department is perhaps one of the few areas where productivity has improved.

Excuses and Low Productivity

Even when poor service is acknowledged, we hear too many excuses. Several months ago, when conceding that Development Application (DA) median turnaround times had doubled since the first year of the merger in 2016/17, Mr Hart blamed staff shortages.

Typically throwing ratepayers’ money at the problem, he announced he had already hired five new permanent and six contract staff and was in the process of recruiting eight new roles on top of that.

There was no discussion of other possible solutions based on better management or productivity.

Unless there were twice as many employees working on DAs in 2016/17, when performance was twice as good, productivity must have fallen.

Mr Hart did not say if that was the case or not, but we do know productivity across Council as a whole has fallen because the latest Annual Report shows over 2,000 employees compared with about 1,900 at the merger in 2016.

Given that services have declined since then (over fifty service cuts were announced at a single Council meeting in March 2021), productivity – output per employee – must now be lower.

Insufficient Prioritisation

And even if there were too few employees working on DAs, who is responsible for that?

It was Mr Hart himself who oversaw the organisational restructure in 2020/21.

Whilst some downsizing was inevitable, applying the 9% reductions evenly across departments was neither strategic nor prioritised.
Because Mr Hart bungled his restructure, he now has to re-hire in priority areas.

Ratepayers are entitled to ask if any of the new employees he has hired, regardless of the titles of their “roles,” are actually performing work previously carried out by those made redundant?

If so, ratepayers’ money will have been wasted on expensive redundancy payments – something that shouldn’t happen if restructures are guided by strategic and community priorities.

When I became a Council Leader in the UK two decades ago, we inherited a not dissimilar financial crisis.

We adopted a different approach focusing on internal reforms to improve governance and efficiency, whilst externally we undertook an innovative community consultation to prioritise functions and services and allocate resources accordingly.

We did not increase rates more than inflation.

What is to be Done?

Mr Hart has now been here more than two years and CEO David Farmer only slightly less. They are now accountable for the quality and value for money of Council services.

Rate hikes may have papered over the financial cracks, but have done nothing to address the underlying causes of those cracks which lay in poor management, culture and productivity.

Indeed, without reforms to address these underlying problems, the extra money will merely entrench new levels of inefficiency and waste.

Self-interested bureaucracies rarely reform themselves. Public accountability is needed.

Despite opportunistic claims to the contrary, local democracy did not cause the 2020 financial crisis.

The Central Coast is not incapable of operating a system of representative democracy that works perfectly well across the rest of the Western World.

Elections should be brought forward.

Council’s high paid senior bureaucracy needs to be accountable to our community for performance, and for the expenditure of our money.

There should be no taxation without representation.

Kevin Brooks