Council has met all milestones and targets in its Financial Recovery Plan that was put in place in late 2020. These actions have been taken to ensure Council’s ongoing financial sustainability.
The focus of Council is now on consolidating and improving the performance of the organisation.
Council has taken a number of decisive actions since uncovering its financial situation in late 2020.
There are now tighter budget management controls in place. We have also implemented measures to manage costs including reducing staffing by $30 million, reducing materials and contracts by $20 million, capping capital works programs at $175 million, selling at least $60 million in property assets and obtaining $150 million in emergency bank loans to reimburse the $200 million in restricted funds that had been spent unlawfully on projects that the community had benefited from. This included $69 million of capital works projects delivered earlier than intended and a continuation of the same level of services for water and sewer, even though ratepayers had reduced rates equating to a loss of approximately $120 million in revenue to Council over three years to deliver these services.
These cost management measures made up 70% of what we needed to do to satisfy the external lenders that we were getting Council finances back on track. The other 30% comes from the temporary 13% special rate variation (plus 2% rate peg) approved by the Independent Pricing and Regulatory Tribunal (IPART) in May 2021 for three years, and then approved by IPART for a further seven years in May 2022.
The external loans are the backbone of our financial recovery and we are required to repay these within ten years from our current and forecasted surpluses as outlined in our ten year Long Term Financial Plan.
Everything possible has been done behind the scenes to reduce costs and minimise service reductions to the community. This includes a focus on productivity improvements which should have been realised as part of the 2016 merger of Gosford and Wyong Councils but were not, such as improving internal systems, processes, equipment and better management of staff time. Some of these productivity improvements will continue to have an ongoing positive impact on improved service delivery and the community will see the benefits year on year. For more information, see Productivity Improvements Fact Sheet.
There has been no fraud, corruption or criminal activity that has caused the financial problems of Central Coast Council. A Public Inquiry was conducted at the direction of the NSW Government and the final report released on 17 March 2022.
- 10 May 2022 – Independent Pricing and Regulatory Tribunal (IPART) approved maintaining the one-off, temporary 15 percent Special Variation (SV) rate increase for the Central Coast for a further seven years to June 2031. This does not mean an increase in base rates as it is a continuation of the 2021-22 rates, with the exception of an increase by the IPART determined rate peg every year. Read FAQs on IPART’s decison on SV rates in May 2022.
- 17 March 2022 – Minister for Local Government, the Hon Wendy Tuckerman MP, tabled the report into the Public Inquiry of Central Coast Council. Commissioner Roslyn McCulloch made eight recommendations, including that the Councillor roles be declared vacant and that an Administrator be appointed to serve until the Central Coast Council election, the date of which will be determined in consultation with the NSW Electoral Commission.
- 3 February 2022 – Council formally resolved to apply to IPART to maintain rates at their current levels for additional seven years, ten years in total to 2031. Council adopted the revised Community Strategic Plan; Delivery Program 2022-2025 (including Operational Plan 2022-23); Resourcing Strategy which includes the Long-Term Financial Plan, Workforce Management Strategy and Revised Asset Management Strategy; and Fees and Charges 2022-23.
- September 2021 to January 2022 – Council formally notified IPART of its intention at the end of September 2021 to make a submission in 2022 to maintain the current rates beyond the three years determined by IPART on 17 May 2021. Community consultation was undertaken over four months via stakeholder meetings, direct submissions, a Community Reference Group and community surveys and at the conclusion of the service levels and scenario engagement, Council engaged on the strategic documents that form the basis of Council’s planning, actions and budgets. To see a copy of the Consultation Report and more information go to https://www.yourvoiceourcoast.com/servicesandrates
- 27 September to 19 October 2021- Public hearings conducted by Commissioner Roslyn McCulloch for the Public Inquiry into Central Coast Council.
- 17 May 2021 – Independent Pricing and Regulatory Tribunal (IPART) approved a 15 percent Special Variation (SV) rates increase for the Central Coast for three years.
- 13 May 2021 – Rik Hart commenced as Administrator of Central Coast Council.
- 11 May 2021 – Council resolved to hold a Constitutional Referendum on 4 September 2021 to ask the community if they are in favour of reducing the number of Central Coast Councillors from 15 to nine, resulting in a reduction of Wards from five to three.
- 26 April 2021 – The NSW Government announced a public inquiry into Central Coast Council’s financial situation and determined the terms of reference. Administrator, Mr Dick Persson AM welcomes the announcement.
- 15 April 2021 – Administrator releases his final report to the community on outlining a number of recommendations to the Minister for Local Government including to take whatever action is necessary to prevent the return of the currently suspended Councillors, and to delay the September 2021 election to allow for a formal inquiry to determine what is needed to achieve the successful merger of the two previous Councils.
- 12 April 2021 – new CEO, Mr David Farmer commences and Mr Rik Hart (Acting CEO) and Mr Malcolm Ryan (interim COO) step down.
- 15 March 2021- public consultation on the Constitutional Referendum for Council concludes with 78 percent of 613 survey participants wanting to reduce the number of Councillors from 15 to 9, and 55 percent of 465 survey participants wanting to abolish Wards and have all Councillors represent the whole Central Coast.
- 9 March 2021 – Council received the ‘Clayton Utz Legal and Financial Forensic Review’ and noted it will continue to receive a monthly report to a Council meeting detailing the financial position of Council at month end (being the Investment Report) as required under the Local Government Act 1993.
- 3 March 2021 – Mr David Farmer was appointed the new CEO for Central Coast Council.
- 8 February 2021 – Council resolved to apply to IPART for a 15 percent one-off permanent special rate increase.(Opens in a new window)(Opens in a new window) Council adopted the revised Long-Term Financial Plan (General Fund) as well as the Debt Recovery and Hardship Policy for purpose of public exhibition. Find out more about the application, impacts on ordinary rates and answers to frequently asked questions at yourvoiceourcoast.com
- 3 February 2021 – Council resolved to hold a Constitutional Referendum for the reduction of Councillors (from 15 to 9) in conjunction with the September 2021 Local Government Elections. On 1 March, public consultation commenced to understand the views of the community to inform referendum questions which would be delivered at the next Council election.
- 3 February 2021 – The Administrator issued a 3 Month Progress Report(Opens in a new window)(Opens in a new window) providing an update on the current situation and progress to date on the Business Recovery plan, with FAQs for the community.
- 8 January 2021 to 1 February 2021 – formal consultation on the rate rise options was undertaken. The results of the consultation can be found here – Securing Your Future Consultation Report 4 February 2021.(Opens in a new window)(Opens in a new window)
- 14 December 2020 – Council endorsed community consultation for a further rate option on for a one-off Special Variation of 13 percent in 2021-22 to remain permanently in the rate base as well as the two percent rate peg. This further option, to also undergo community consultation, was in response to further work undertaken in forecasting the reduction in service levels to achieve sustainable long-term financial plans and repay restricted reserves.
- 2 December 2020 – a 30 Day Interim Report(Opens in a new window)(Opens in a new window) was issued by the Administrator Dick Persson which sets out preliminary findings and conclusions about how Council found itself in the current financial situation. It states that Council has failed to understand or practise the basics of sound financial management and that the investigation found no evidence of theft or corruption. However there had been unlawful use of restricted funds.
- 30 November 2020 – it was determined that the former CEO Mr Gary Murphy did not meet required standards of his role particularly regarding the core requirement of sound financial management and his contract was terminated. Recruitment of a new CEO is underway with a planned commencement date of early April 2021.
- 26 November 2020 – Council endorsed the making of an application to the Independent Pricing and Regulatory Tribunal for a one-off Special Variation of eight percent in 2021-22 to remain permanently in the rate base for seven years, which plus the two percent rate peg increase in 2021-22 represents a total rate increase of 10 percent for 2021-22. Council further resolved to undertake community consultation on the application.
- October 30 2020 Minister for Local Government, Shelley Hancock MP suspended the Council and appointed an Administrator, Mr Dick Persson AM. Mr Persson is supported by Mr Rik Hart as Acting CEO to oversee Council’s operational recovery. This suspension has been extended until 29 April 2021.
- 26 October 2020 – Council engaged Clayton Utz and Clayton Utz engaged KPMG to undertake a targeted forensic review of a sample fund to gain understanding of Council’s financial accounting practices and adherence to the Office of Local Government Guidelines.
- 16 October 2020 – Natalia Cowley appointed as Chief Financial Officer and the temporary appointment of Malcolm Ryan as Chief Operating Officer on 30 November 2020 to assist with the implementation of structural change in Council.
- October 6 2020 – Council announced it was in a ‘serious financial situation’ and faced an ‘immediate and serious liquidity’ issue.
- The Office of Local Government was advised, there was an immediate review of Council’s budget and a 100-Day Recovery Plan (now Business Recovery Plan) was developed.
Proactive release of Information to be provided under a formal GIPA
Council has proactively released the following information on 9 March 2021.
|No||Date||Description of record||Download Link|
|1||19/11/2020||Meeting File Note||1.Meeting File note 19112019.pdf|
|2||20/3/2020 – 1/4/2020||Email correspondance between Gary Murphy and Craig Norman||2.Email correspondence between GM and CN|
|3||23/3/2020||Email correspondance between Gary Murphy and Craig Norman||3.Email correspondence between GM and CN-23320|
|4||27/3/2020||Email correspondance between Craig Norman and a number of people including Gary Murphy||4.Email correspondence between CN and a number of people including GM 270320.pdf|
|5||20/4/2020 – 21/4/2020||Email correspondance between Gary Murphy and Craig Norman and forward email from Carlton Oldfield||5.Email correspondence between GM and CN and forward email from CO.pdf|
Addressing community concerns
We have been listening to our community and have a strong commitment to answer your questions, respond to concerns and provide transparent and timely information.
Read community consultation on the special rate variation.