Central Coast Council says it is ending its four years under administration in a strong financial position, with a reduction in debt of $150M.
Council’s debt at the commencement of the administration period was just under $350M, due to having to take out two emergency loans; it now sits at less than $200M.
Acting CEO Marissa Racomelara said Council was put in administration because of inadequate financial management leading to a crisis.
In response, during the period under administration, the focus has been to repair Council’s financial settings and the associated processes.
“As well as delivering the Financial Recovery Plan, over the past two financial years Council has significantly improved its financial processes and delivered financial statements that satisfied audits undertaken by the NSW Audit Office and were completed within the legislated timeframe,” Racomelara said.
“Council has progressively turned annual operating losses into appropriate surpluses.
“This means that Council ‘s performance favourably exceeds one of the most important indicators of Council’s financial health.”
During 2023-2024, Council contained expenditure within the income that was available, while delivering services and projects to the community and ensuring that the organisation was able to absorb any adverse financial impact that arose during the year, Racomelara said.
“As a result of this prudency, Council has achieved an operating surplus of $38.6M,” she said.
“Over the past three financial years we have accumulated surpluses totalling $114M.
“While this is still short of the more than $160M in losses accumulated over the three preceding financial years, our focus going forward is achieving sufficient surplus to make up the gap, and to remain sustainable into the future.
“During the year we have repaid more than $100M of borrowings, including one of the emergency loans taken out during the financial crisis.
“At the same time, we were able to draw down the first $10M to deliver the upgrade of the Mardi Water Treatment Plant project.
“This project is a good example of good debt.
“It will benefit many generations to come, so spreading the cost over many years by borrowing is the fair approach to take.”
Administrator Rik Hart said he was pleased to leave Council in a positive financial position.
“It’s gratifying that the Financial Recovery Plan we put in place in late 2020, following four years of loss, has achieved all its milestones and Council’s financial position has been successfully restored,” he said.
“During the last financial year, we added more than $360M to the value of our community’s roads, drainage, buildings and water and sewer infrastructure assets.
“We have invested over $170M in renewing our community’s assets, to keep up with deterioration occurring during the year, as well as addressing shortfalls in renewal expenditure accumulated over earlier financial years.
“Over the past three years we have increased the proportion of assets that are in the required condition, reducing the backlog from 2.62 per cent to just over two per cent of the value of Council’s assets.
“Notwithstanding the continued expenditure on renewing and replacing assets, like most councils, we do face the challenge of consistently maintaining a proactive maintenance approach for all assets.
“Council has been often criticised about what assets are upgraded and when, particularly where roads are concerned – it is natural that residents want their roads or community facilities upgraded first.
“However, as has been explained many times, we maintain assets based on a priority basis driven by risk and limited resourcing, while balancing other expenditure areas that are important to our community.
“The incoming Council will also need to understand this and will need to continue to engage with Central Coast residents to help them identify the programs and services that are most important to our community and prioritise resources accordingly.”
Council’s cash position remained strong in 2023/2024.
As at June 2024, Council had total cash of $773M, with most of it restricted or set aside for specific purposes, leaving $104M in unrestricted cash.
“Council had an approximate debt of $565M by late 2020 and is now at a healthy level, repaying the loans whilst Council continued providing services and investing in infrastructure,” Hart said.
“As Council continues to manage its financials in a responsible manner and its financial position continues to improve, I am confident that along with a strong CEO and executive leadership team, the groundwork is in place for the incoming councillors to make sound decisions that propel this Council forward.
“As I conclude my time as Administrator I am also confident that, through the checks and balances now in place, Central Coast Council will be able to continue to deliver on its Delivery Program, Operational Plan and Long-Term Financial Plan.”
very clear how they achieved the savings, the roads up near Bateau Bay have not been fixed for at least 10 years! Worst roads with gaping potholes. Ratepayers are paying twice, one time paying the rates and two the repairs to their cars!
ironic that this was achieved by penalising residents through multiple rate rises to cover the gross negligence & incompetence of the previous council. We will be paying for their mistakes for years to come while there is zero accountability. Hopefully the next era comprises of legitimate professionals from the private sector that are capable and qualified to manage this efficiently…not the legacy public servant punters looking to suck the coffers dry with the usual slacker mentality.
Let’s hope that the with financial success that council thinks it has, it reduces the rates for the central coast so it’s more comparable to rates in other council areas rather than being the highest.
for a start stop the new library complete waste of money, also stop all handouts to bludgers
no one has explained what the $565 million was spent on not roads .Ettalong beach repairs .No accountability for spending money on what show us the infrastructure
I agree with Ashley Kaye it’s not just the roads in Bateau Bay but the majority of roads in Long Jetty and The Entrance all have been sadly neglected.With a high population of elderly people on mobility bikes and walking frames I would like to see a 5 year plan put in place to bring roads guttering /footpaths brought up to date and not looking like they belong to some 3rd world country,all have been neglected and forgotten by all previous Councils
so debt is now only less than 200M. ONLY. This is considered success.Wow bet they never ran a private company.
Don’t let the people back into council who caused this debt that has cost us the ratepayers .
i wish we could keep the administration accountant.
we know the replacements are ready to pounce
Sure you reduced debt but only by bleeding us dry with multiple double digit percentage increases in rates and the introduction of a whole lot of new charges like paying for a new sewer usage charge based on how much water we use. The Central Coast Water Corporation with the assistance of IPART is now used to suck us dry. This is not good financial management when a council just increases its employee numbers and belts its ratepayers with huge rates increases way above the CPI and far greater than any increase in the income of residents.Its unsustainable and eventually will result in a revolt by ratepayers. Council sold land it owned for $30 million dollars which was then resold within 6 months for $410 million. This is the new Warner Business Park. Council estimated development costs at around $100 million – almost $300 million return for the developer. That could have been used to repay the debt of the previous council instead of reaming ratepayers.
I agree with many of the comments already made. Individual costs up unfairly and so little done on roads etc. Much good work on bigger, important projects but more balance with community’s needs required.
If the council is in a better financial position, maybe they should look at the construction projects that have been approved. Especially the eyesore in front of the Wyoming Caravan Park, of cause it s not a caravan park anymore is it. Still trading as such. Needs Administrators to look at the dodgy practices that have been going on these past 3 years.
What a load of BS. Rate payers bled to death and tehn just walk away. If this was in the real world people would be jailed. This has been and still is a massive cover up. WHO was in charge?? Put your hand up and take responsibility you whimp. The roads are some of the worst in Australia still. So administration. Stop crowing how good you’ve been and give ratepayers what they want. JUSTICE for the crap we have put up with for years. We deserve better.
What this report fails to tell us is that in the original report it was stated that the action of the previous administration was found to be “unlawful”.. That means illegal and against the law. Still no one has been charged or even held accountable. Start looking after the people who give you the money in the first place or soon we just might stop paying.
We were far better off when we were two (2) councils. It would be easier and more effective to manage. We need to split the councils again back to a more manageable size.
Good on you councillors. Stop me from saying what I really think