Central Coast Council reveals budget deficit of $89m
Central Coast Council has announced it is facing “an immediate and serious liquidity issue” following a review of its budget which reveals it’s current deficit is likely to double.
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A review of Central Coast Council’s budget has revealed an increase from a $41m deficit to $89m in the red.
Council has released a statement today regarding it’s woeful financial position, following a crisis meeting held with senior staff and councillors this morning.
“The Council is in a serious financial situation and faces an immediate and serious liquidity issue,” the statement read.
“Central Coast Council has, following a year of natural disasters and the impact of COVID-19, undertaken a review of the council’s budget which reveals that its budgetary position has deteriorated since the March 2020 result.
“The deficit reported at that time of $41 million is now expected to increase to $89 million.
“Some expenditure over the past 12-18 months may have resulted in restricted funds being used contrary to the provisions of the Local Government Act 1993. This is still under investigation.”
Council’s chief executive officer Gary Murphy has informed the Office of Local Government NSW of the financial issues, which have come to light following a review commissioned by Mr Murphy.
Local Government Minister Shelley Hancock has conformed the Office of Local Government (OLG) has been advised of the situation.
“I have instructed the OLG to appoint an independent financial expert and a Human Resources adviser to ascertain council’s true financial position and identify options to address the issues as quickly as possible,” she said.
OLG has already held discussions with the Council’s CEO and senior staff and will continue to closely monitor the Council to ensure its ongoing sustainability.”
It comes as Cr Greg Best has lodged a scathing notice of motion for next week’s meeting highlighting a “collapse of confidence” in council’s financial management.
Cr Best highlights a range of financial issues including the council having gone through four chief financial officers in the past three years with the council currently recruiting for the position.
“Council has some very serious financial issues to address and I believe the (Local Government) Minister will have to step in,” he said.
Other issues raised include council unlawfully spending $13.2 million worth of funds dedicated to local infrastructure projects. This action was uncovered by the NSW Auditor-General which stated council spent funds from 40 different developer contributions plans — inherited from the former Gosford City Council — on administration expenses.
Cr Best also highlights that staffing levels were up by some 500 full time employees since the amalgamation in May 2016, with the council, with the council now having around 2500 staff.
Cr Best’s motion comes after a report to council’s meeting last month showed its investment portfolio had also taken a big nose dive.
Council’s total investment portfolio on July 1, 2019 was worth $445,661 million. By the end of the last financial year had nearly $100 million wiped from the balance sheet, closing the year with a portfolio worth $348,210 million.
In the first quarter of this 2020-2021 financial year the figure had slumped a further $40,232 million and as of the end of August, council’s investment portfolio was values at $307,978 million — a drop of almost 31 per cent in 15 months.
The Express Advocate sought a response from council on September 24 as to why its investment portfolio had tanked so dramatically in such a short time frame but council is yet to respond.