Central Coast Council’s Public Inquiry findings revealed as councillors sacked

Central Coast councillors have reacted to their dismissal with former Mayor Lisa Matthews saying councillors had been treated as “scapegoats” while another councillor handed in his resignation the day before the announcement.

Central Coast councillors have become the “scapegoats” for the financial crisis, says former Mayor Lisa Matthews.

Ms Matthews told the Express councillors received a one-page letter telling them they were dismissed on Thursday with no reason given.

“It’s sad, I can live with being dismissed but tell me exactly what I did wrong,” she said.

“Don’t just dismiss me without a reason.”

She said the report into the Public Inquiry was inconclusive as to what really went wrong.

“The Central Coast community still don't have answers as to who did what. Councillors are just the scapegoats and out they go,” she said. “It’s sad, 21 years in local government and I never thought it would end like this.”

Central Coast Mayor Lisa Matthews said councillors had become the scapegoats. Picture: Sue Graham

Ms Matthews, who runs a beautician business, said councillors were only allowed to speak with senior bureaucrats in council and did not have access to the correct financial information.

“We weren’t allow to speak with senior staff,” she said. “The devil is in the detail and the details were with those senior managers. A lot of things were wrong, the report says the amalgamation was flawed. But it is what it is.”

On Thursday morning Local Government Minister Wendy Tuckerman announced that councillors had been terminated “effective immediately” over the financial crisis which saw the council plunge into $565m in debt.

The long awaited Public Inquiry report into what has been described as the “largest financial failure in local government history” was also released.

Former councillor Greg Best said he knew what was coming and handed in his resignation on Wednesday afternoon.

Mr Best saw the writing on the wall and resigned on Wednesday. Picture: Sue Graham

Mr Best labelled the Minister’s move as “pathetic” and said it was throwing all councillors “under the bus”.

“There’s no way I wanted to stand by and be dismissed from this council,” Mr Best told the Express.

“The Minister hasn’t delineated from those who called it and caused it. Everybody gets it.

“I’m incensed at the Minister’s pathetic, blunt, expedient option of simply dismissing all councillors. I will not let this sleep. The Minister is completely out of touch.”

Mr Best said he and other councillors repeatedly tried to call out problems in the council chamber when budgets were blowing out by $5m to $22m and $35m in the last few years.

“What does this decision say to any up and coming councillor if they discover corruption or something wrong … would that councillor report it? I don’t think so at the risk of getting sacked. It’s criminal in the modern era to heap people with the one dishonourable discharge. The message is ‘don’t report corruption in council if you want to survive’.”

Bruce McLachlan said he was relieved with the decision. Picture: Sue Graham

Former independent councillor Bruce McLachlan said he was relieved that the councillors who contributed to the collapse will not be allowed back.

“We even brought a notice of motion to the chamber titled ‘Council to Avoid Dismissal’ to try and bring some sort of order and financial responsibility to the chamber decisions,” he said.

“However we were just ridiculed and voted down with suggestions of scaremongering and being theatrical.

“As the adminstrator Dick Persson said, Labor had the numbers, they controlled the council. Any sensible debate was just batted away. Guess the Minister wiped the smirks off the dismissive majority councillors’ faces today.

“Going forward the Central Coast doesn’t need that sort of negative politics, deliberately trying to hold the region back.”

The Public Inquiry into the debt ridden council, which wracked up an accumulated debt of $565m including $200m in the use of restricted funds, has been underway for almost a year.

Ms Tuckerman has sacked the councillors.

Roslyn McCulloch has handed in her report into the crisis.

Commissioner Roslyn McCulloch’s report makes eight recommendations including that an Administrator be appointed until the council elections. Mrs Tuckerman said the government accepted Ms McCulloch’s recommendations in-principle.

“The community rightly expects that its elected council officials adhere to the highest standards and this report makes strong recommendations to help improve the council’s performance moving forward,” Mrs Tuckerman said.

“The Commissioner’s report raised concerns about the financial management of Central Coast Council and makes practical recommendations to improve accountability.

Central Coast councillors have been sacked by NSW Local Government Minister Wendy Tuckerman.

“Central Coast ratepayers deserve a council operating in the best interests of its community and this report puts in place recommendations to continue the road to recovery.”

Administrator Rik Hart will continue as interim Administrator and has said he supports the Minister’s decision.

“I acknowledge the financial crisis left our community and council staff feeling let down and angered,” he said.

“The community of the Central Coast called for a public inquiry into the financial crisis that crippled Council, and whilst the findings may not satisfy everyone this is an opportunity to draw a line in the sand and focus on the future in rebuilding our council to deliver for our community.”

Central Coast Parliamentary Secretary Adam Crouch also supported the decision to terminate all councillors.

“The focus of elected Councillors needs to be about the betterment for our region, not about individual point scoring,” he said.

Central Coast Council Administrator Rik Hart supported the decision.

“This report has clearly identified that their behaviour has played a contributing factor. I welcome the recommendation for rigorous and mandatory training going forward for future councillors, providing those seeking to be elected into office with the necessary framework and understanding needed to undertake their responsibilities.

“Central Coast Council Administrator Rik Hart and CEO David Farmer have done an excellent job, making the tough decisions related to the Council’s financial situation that the former elected body failed to make.”

It was October 6 2020 when news that council was facing “liquidity issues” broke and not long after, when the council revealed it was unable to pay its staff, the State Government stepped in to suspend councillors and make sure staff were paid before Christmas.

Interim Administrator Dick Persson AM was brought in to take over and investigate the crisis with one of his fist actions to dismiss CEO Gary Murphy.

In his first report to the government and community, he revealed that council had an accumulated debt over four years of $565m which included $200m in the use of restricted funds.

Dick Persson AM was appointed by the State Government and came out of retirement when the crisis broke. Picture: Fiona Killman

At the time he said he was “not aware of an example of a greater financial failure of local government in NSW or Australia’s history”.

“The key misunderstanding was that at merger they failed to recognise they only had $6m in the bank. At some point people convinced themselves that these large amounts of money in (restricted) accounts were available and they weren’t,” he said.

The Public Inquiry was announced in April 2021 with the extension of the councillors’ suspension pending the findings.

Public Inquiry Commissioner Roslyn McCulloch held public hearings in October 2021 where she heard from suspended councillors, council staff, ex-staff as well as local government experts.

Central Coast Council’s former CEO Gary Murphy’s defamation case against former interim Administrator Dick Persson returned to court on Thursday. Picture: Sue Graham

Many councillors spoke of “red flags” such as a lack of handover when they were first elected, unnecessary spending, budgets being rushed through and the “combatic” behaviour in the chamber, while others spoke about their loss of reputation.

Former CEO Gary Murphy denied any knowledge of the use of restricted funds and said he ordered an investigation as soon as he realised the budget wasn’t lining up.

Mr Murphy’s defamation case against Mr Persson was before the Sydney District Court on Thursday where the court heard that discussions between the two parties.

Mr Murphy’s legal representative said he was keen to continue conversations and the matter was adjourned until March 24.