Central Coast Council financial crisis: Mayor and councillors to debate suspension response
Central Coast Councillors will rely on their actions since news of the financial crisis hit to save themselves from suspension. The council was made aware it was staring down the barrel of an $89m debt on October 5.
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Central Coast councillors are seeking to rely on their actions in response to the financial crisis to avoid suspension.
Councillors have voted on their response to Local Government Minister Shelley Hancock’s suspension notice issued last week due to council’s financial crisis and $89m debt. The notice called for the suspension of Mayor Lisa Matthews and all councillors.
Cr Matthews said councillors were best placed to manage the crisis and had already put into place forensic audits, a financial committee and 100 day recovery plan.
“Putting administration is not in the best interests of our community,” she said.
The response outlines recent challenges such as bushfires and COVID-19, however focuses on council’s actions since news of the financial crisis struck.
“Having regard to the significant actions that council is taking and plans that are being implemented to identify and address the issues, we submit that you could not form the view that an administrator is necessary to restore the proper and effective functioning of council,” the submission reads.
“Council is clearly addressing the issues and risks and taking action to ensure proper fiscal management.”
The submission also states that councillors never voted to use restricted funds, which council was found to have unlawfully done.
A group of councillors – Cr Greg Best, Bruce McLachlan, Jilly Pilon and Chris Bourke – voted against the response and called for councillors to step aside.
“This is a seismic loss … an utter disgrace,” Cr Best said. “The people trusted us at the ballot box to look after their interests. Fall on your swords, crawl under a rock and putrefy from your shame.”
Cr Bruce McLachlan agreed saying “pull the plug on this council”.
“We are the board and this happened on our watch,” he said. “The politics that got us into this is not going to get us out. This is beyond the councillors’ capabilities.”
Cr Kyle MacGregor said councillors were provided figures that indicated the council was in a strong position.
“We have been provided information which has been inaccurate and misleading. Councillors, all 15, have not acted corruptly,” he said.
“We have not been engaging in any misconduct. We have acted professionally with the information that has been presented to us. It’s about poor accounting practice in the operational side of council. Getting rid of councillors is not going to address the issues.”
The meeting started with the resignation of two Liberal councillors. Crs Rebecca Gale and Troy Marquart were absent, having submitted their resignations before the meeting.
Cr Best said the sudden resignation of two councillors was a first during his time with council, however noted the last few weeks had been a stressful time for councillors.
“We know where this (meeting) is going I think,” he said. “This is an extraordinarily stressful time for councillors. These two councillors have been champions for their community.”
This meeting, being held remotely, could be the last for the mayor and remaining councillors with Ms Hancock announcing the suspension on October 21 and giving councillors seven days to respond.
The financial crisis, which has shocked the region, was announced on October 6 with council announcing it was facing “liquidity issues” and an $89m debt.
Since then, council has been working on a 100 day recovery plan and appealing to the State Government to use its restricted funds for everyday cash flow.
The crisis reached boiling point on October 21 when council announced it could not pay its 2157 staff for the week.
This forced Ms Hancock to intervene, giving the council $6.2m in emergency funds to pay staff. However in doing so she also issued the suspension notice.
“The local community is sick of excuses from council,” she said.
“There is no question that council needs to be held responsible for these failures.”
The announcement has received mixed reactions, with Cr Matthews saying she was disappointed with the suspension notice.
“Our 100 Day Recovery Action Plan has the unanimous endorsement of council and has been shared with the Office of Local Government. I can assure the Minister that we are addressing our financial issues,” she said.
Cr Bruce McLachlan welcomed the announcement and the appointment of an administrator, while Cr Kyle MacGregor said the 15 councillors were being used as scapegoats.