Central Coast Council crisis: Local Government Minister orders a public inquiry
Local Government Minister Shelley Hancock has outlined what the future holds for the debt-ridden Central Coast Council.
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The election of a new team of Central Coast councillors, scheduled for September, has been delayed – as Local Government Minister Shelley Hancock reveals a public inquiry will be launched to investigate the embattled council’s financial management and ability to serve the community.
Ms Hancock has appointed local government and planning law expert, Roslyn McCulloch, as Commissioner of the million-dollar inquiry, which will also result in the continued suspension of the 13 councillors until proceedings are complete.
The local government minister said the inquiry could result in the complete dismissal of councillors, referrals to the Independent Commission Against Corruption and improved financial procedures for the besieged council. However, no action has currently been taken against any individual councillors.
“The performance of Central Coast Council, particularly concerning financial management, has been of great concern to the local community,” Mrs Hancock said.
“On behalf of all Central Coast ratepayers, I want to see (the) council performing in the best interest of the community and this public inquiry will help get to the bottom of the issues which have impacted its performance, resulting in my suspension of councillors and appointment of an interim administrator.”
Following the announcement of the inquiry – which could see the council dismissed – local government elections on the Central Coast have now been postponed until late next year.
“My decision to order a public inquiry aims to give the community the best possible chance to restore confidence in its council,” Mrs Hancock said.
“As such, I have formed the view that it is in the public interest for all Central Coast councillors to remain suspended during the public inquiry process.”
Following the announcement, Mrs Hancock told reporters the “mess” at Central Coast Council had nothing to do with the amalgamation process between Wyong and Gosford councils.
The Local Government Minister said she didn’t expect an election to take place on the Central Coast until the second half of next year, while ruling out the possibility of a judicial hearing into the financial mismanagement of the council.
The council’s interim administrator Dick Persson AM was appointed following the suspension in October 2020, however, announced he will step down following the release of his final report. Former local government general manager Rik Hart will now take on the role of interim administrator in May.
Mr Persson has welcomed the news and said stopping the councillors from a return next week was vital for the community and the council.
“My final report recommended this course of action as there is still a lot to do before the Council recovers from the disruption of the past three years,” he said.
“The new CEO and new Administrator need to continue the ‘recovery’ without the political distractions which would have inevitably occurred if the Councillors had been allowed to return. A further suspension will also allow Council to focus on regaining the community’s confidence and to achieve unfinished merger related work.”
He said Ms Hancock's choice to appoint Mr Hart as the new Administrator was “excellent” and that he and the new CEO David Farmer will make a very strong and experienced team.
Mr Persson was due to finish up his role on Thursday however this has been extended for another two weeks to allow Mr Hart to complete some personal business.
Suspended Central Coast Mayor Lisa Matthews told the Express she welcomed the public inquiry but was disappointed it was not a judicial inquiry which Ms Hancock rejected last week.
Ms Matthews said legacy issues around debt along with the IT system introduced by the former Administrator and system and technology failures contributed to the council’s downfall.
“I believe that the merger of two unfit councils did not make a good mix,” she said.
“I don’t think a public inquiry will go far enough but I welcome any report that comes out.”
She said no evidence of corruption had been identified by Mr Persson’s investigations and the community deserved more answers.
Meanwhile Central Coast Parliamentary Secretary Adam Crouch welcomed Ms Hancock’s decision and the appointment of Ms McCulloch as independent Commissioner.
“The Public Inquiry’s terms of reference are very broad and will enable the Commissioner to investigate Council’s financial situation as well as its ability to properly represent and serve our community,” he said.
“The Public Inquiry will also consist of public hearings where community members, as well as current and former Council staff, can provide evidence to the Commissioner.”
Robertson federal Liberal MP Lucy Wicks also supported the announcement.
“I support the continued suspension of the Councillors and would encourage the NSW Minister to consider any measure necessary to get this Council back on track, including delaying Council elections beyond late 2022,” Ms Wicks said.
Suspended councillor Bruce McLachlan also welcome the news, saying “the losses and economic impacts to the community cannot be simply ignored”.
“The old adage ‘it’s easy to spend other people’s money’ was well demonstrated in this past council,” he said.
The councillors were initially suspended on October 30 after it was revealed council did not have the money to pay is staff and was facing “liquidity issues”.
The State Government bailed the council out with emergency funds and at the same time Ms Hancock suspended councillors initially for three months.
The initial figure announced was a loss of $89m however that grew to an accumulate debt of $565m over for years revealed in Mr Persson’s 30 Day Report.
In January, Ms Hancock extended the suspension by another three months to allow Mr Persson more time to fix the problems and appoint a new chief executive officer.
When it comes to the precedent set by action taken at Central Coast, Mrs Hancock said allegations of mismanagement, code-of-conduct breaches and bullying at Inner West Council and Dubbo Regional Council “weren’t at the stage yet of even taking any serious action”.
“Inner west has some issues, and we are monitoring Inner West,” she said. “It is a big step to go beyond monitoring a council which has some problems … to the step that I am taking today.
However, the minister said councillors at Wingecarribbee Council could face further suspensions and the possibility of a public inquiry following the release of findings by newly-appointed administrator Viv May.
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