City of Coffs Harbour’s ‘incredible’ operational surplus explained

The oxygen has been sucked out of social media rumours that Coffs Harbour is broke – the city has revealed a staggering operational surplus. Here’s how it came to be.

City of Coffs Harbour general manager Natalia Cowley. Picture: Chris Knight

The financial turnaround for City of Coffs Harbour has been so swift and spectacular it has taken even the general manager by surprise.

At its latest meeting, council received audited reports for the 2022/23 financial year.

The result is an operational surplus of $26 million – when one of just $8m was forecast.

A perfect and mostly happy storm of events has contributed to the result.

City of Coffs Harbour transformed its financial position in 2022/23. Council chambers. Picture: Chris Knight

Headline factors include:

* Rising interest rates leading to increased returns of council’s cash deposits and investments.

* The sale of 89 car spaces on Gordon St to the NSW government, which will use the land to construct a multistorey hub for state services. A condition of the sale is that a like number of car spaces will be created down the track.

* Surging attendance at council-run holiday parks.

Mayor Paul Amos at the opening of the Coffs Coast Regional Sports Hub Stage 2 project on May 27, 2022. Picture: Chris Knight

* A whole-of-council restructure, where each directorate was tasked with cutting its costs by $1.5m.

* A pause and re-examination on capital works projects which had not begun.

“I’m delighted to report the city achieved an operating surplus of $26.05 million in 2022-23 before capital grants and contributions,” Mayor Paul Amos said.

“This accomplishment reaffirms our financial resilience and assures us of our ability to execute our plans, including our adjusted capital works program.”

Each council directorate had to find savings. Picture: Chris Knight

The council’s general manager Natalia Cowley said the restructure was a challenging, but necessary process.

“Every single department had to deliver the savings either through staffing or materials,” she said.

The directorates were given a six-month timeline to make the adjustments, lessening the need for redundancies as the workforce naturally reduced through churn.

Ms Cowley noted a financial recovery in the same year as an organisational restructure “doesn’t normally happen”.

Pockets of the community took to social media, claiming the city was cash-strapped due to the Yarrila Place commitment. Picture: Chris Knight

“The financial turnaround has been incredible,” she said.

A key focus were the capital projects – and Ms Cowley said Coffs had a job book equivalent to a council three times its size.

The cultural and civic centre Yarrila Place was quarantined from that process as work was well under way and all parties were contractually bound to the project’s completion.

But some other projects were paused, especially where they had won external funding which could be deferred.

Coffs Harbour has seen an extraordinary number of new builds in recent years. Picture: Chris Knight

“Our enhanced operating results and solid unrestricted cash reserves are a testament to our adept financial management, encompassing our prudent handling of debt,” Ms Cowley said.

“With this substantial financial achievement, the City of Coffs Harbour is now ideally positioned to channel its energies into realising the collective vision of our community – to build a great place to live, work, visit and do business into the future.”

One of the surprise contributors to the Coffs war chest were the holiday parks.

“They had a spectacular year. After Covid many people decided to undertake domestic travel,” Ms Cowley said.

Domestic tourism has contributed considerably to Coffs’ coffers. Jayden Coombes from Arrawarra takes the plunge at The Jetty. Picture: Chris Knight

“We didn’t have a lull (in bookings) at all – over 90 per cent (tenancy) for all cabins through the year.”

Coffs also enjoyed a windfall year through its precast yard – providing components to other councils doing work through the state’s Building Local Bridges program.

Nuts and bolts

* $4.33m increase in interest and investment revenue due to improved forecasted interest rate returns.

* $8.17m in additional other revenues due to an increase in coastal commercial works, primarily for other councils.

* $5.7m mostly from holiday parks.

* There were also some one-off revenue opportunities such as the sale of car park land and bypass land acquisitions.

The city’s financial statements were screened by the Audit Office of NSW.