Cumberland Council loses $6.2 million, sparking demerger debate
A council that lost $6.2 million over the past financial year is aiming to reverse the predicament which has put it “in a very difficult position”.
Parramatta
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Cumberland Council is in emergency mode after it lost $6.2 million over the past financial year — a drain that has triggered another row about the burden the forced amalgamation has had on ratepayers.
Before vocal merger opponent councillor Greg Cummings stormed out of a recent meeting, the council’s finance and governance director Richard Sheridan said the council lost the $6.2 million from its recurrent budget.
The loss was blamed on factors such as the drop in development applications in the slowing market which “put the council in a very difficult position”.
Mr Sheridan said that led to the council’s cash reserves being depleted to $711,000 to fund new assets.
“The situation’s very difficult for us and with only $700,000 in the bank we know we have to make some difficult decisions in the future as a group,’’ Mr Sheridan said.
Mr Sheridan said it was now trying to break even.
“Turning it around from a $6 million loss to a break-even in one year, it’s a bold move,’’ he said.
“It’s obviously difficult to do and we’re going to try our best to maintain that all the way through the year and achieve that so we have a break-even budget.’’
Councillor Michael Zaiter raised concerns about having inadequate funds to cater for expenses after using cash reserves to cover operating expenses.
“We cannot continue to lose this kind of money on a year in, year-out basis and remain sustainable as a council,’’ he said.
He said a report compiled recently highlighted a view that looked “rosy but from a truly cash point of view we are not in a very good position and hard decisions will need to be made for next year’s budget onwards in terms of potentially dealing with the budget deficit”.
Councillor Glenn Elmore said the council’s financial position was put into question during amalgamations in 2016 when it lost rates north of the M4 that went to Parramatta Council.
“We were told that council amalgamations were going to have huge benefits to councils and it hasn’t happened at Cumberland Council,’’ he said.
“We’ve really got to look at our position and, as Cr Zaiter said, we’ve got to get more income or we’ve got to cut somewhere so I don’t envy the general manager over the next 12 months or two years.”
Cr Cummings, who vehemently opposed Holroyd merging with parts of Auburn and Parramatta, blamed the money woes as a “legacy of the merger”.
He also said former administrator Viv May’s decision to “build a Taj Mahal in Granville” (the Granville Multipurpose Centre) was “another sterling decision” that most of the residents of the local government area probably won’t get to enjoy”.
But councillor Ned Attie dismissed the mergers as the sole reason for the financial problems.
“Can we please get off that stupid bandwagon of bringing back and disseminating this council again because I know that it’s not going to happen,’’ he said.
“It will cost us twice as much to demerge this council as it cost us to actually merge again and we don’t have the money to actually continue a council at the moment, let alone demerge this council, so get off the bandwagon and move on with business.”
Cr Cummings left the meeting in disgust shortly before it ended.
The tense debate was fuelled by Prospect state Labor MP Hugh McDermott circulating petitions to residents living under the former Holroyd council calling to deamalgamate Cumberland.
Resident Gillian Kirby questioned why the council spent $2.5 million on upgrading “a few
metres of footpath in the Merrylands CBD’’ given the dire financial situation.
“It wasn’t needed — but I can only think they didn’t want to agree with a resident suggestion made when the matter went before council,’’ she said.
“If they want budget savings – that was surely a quick and easy save.’’
A report about the financial problems is due to return to the council in February.