Locals slam bloated council’s history of ‘incompetence’ as it seeks 40 per cent rate hike
A cash-strapped council that says it has to raise rates by 40 per cent to fund a $40 million hole has a long history of “incompetence”, locals say.
A cash-strapped Sydney council that sparked outrage after voting to raise rates by 40 per cent to fund a $40 million annual shortfall has a long history of financial “incompetence”, locals say.
Northern Beaches Council (NBC) installed concrete traffic slabs in the centre of the narrow road along the Manly beachfront in January 2023 without prior notice — only to quickly pause the works and later remove them after a slew of complaints.
The median strips, installed to enforce a 30km/h limit along North and South Steyne, instead caused a traffic hazard, in some cases preventing cars parked in 90-degree bays from safely reversing out.
Members of council’s traffic committee later complained that they were not even aware that they had voted to approve the slabs, which had been listed only as “minor civil works”.
While the original works were funded by Transport for NSW under its local road safety grants program, NBC has not been forthcoming on whether it was forced to cough up for the rectification.
“Did we have to pay or did the government say ‘we’ll cover it’?” said independent Councillor Vincent De Luca. “Can you imagine the government paying for something twice?”
Cr De Luca, who has led community opposition to NBC’s proposed 40 per cent rate hike and called for spending cuts instead, said he had not received an answer to the question and “that’s why I think” council ultimately footed the bill.
He echoed residents’ concerns raised on Tuesday night that it was just one example of how council had “mismanaged projects”.
Locals have also voiced opposition to a 1.5-kilometre cycleway between Curl Curl and Freshwater, which blew out from an initial $1 million estimate to $3 million under a revised design presented in November — and currently sits half-finished, 18 months after a false start.
“Projects that should have been $3 million have skyrocketed and gone well over,” he said.
“Warriewood Community Centre is a perfect example, [as well as] certain surf club redevelopments. Obviously there are serious issues.”
Cr De Luca said residents were “irate with the failed Manly beachfront works and those proposed for Freshwater and Curl Curl with those works taking away residents’ parking and even obstructing their driveways”.
“There have been several accidents already,” he added.
Cr De Luca has requested from council a “full list of all projects that have gone over budget, the amount and what dates”, but is yet to receive a response.
“Leadership incompetence sits at the very heart of this whole situation,” one resident said.
NBC has been contacted for comment.
On Tuesday night, about 200 furious residents gathered outside the Dee Why council chambers ahead of the 8-7 vote in favour of the hike, which sparked cries of “sack them all” from the gallery.
NBC will now apply to NSW’s independent regulator to increase rates by 39.6 per cent over three years.
The proposed increase, which will raise an additional $57 million per year, will be determined in coming months by the Independent Pricing and Regulatory Tribunal (IPART) in its annual 2025-26 special variations process.
Council warned in the proposal that its “financial sustainability is at risk”.
“The Asset Management Plans require an additional investment of $15.1 million per year to maintain and renew existing assets, along with $10.4 million per year to uplift service levels and provide high priority new assets required by the community,” it said.
“Some community members expressed a desire for council to work within its existing budget and reduce non-essential services to do so … [but a] reduction in some non-essential service and administration would not be of a scale to offset the required level of funding for council’s asset maintenance and renewal backlogs that are in the order of approximately $40 million per annum and increasing.”
NBC blamed the Covid pandemic, as well as storms, flooding and bushfire threats in recent years, for its perilous financial position.
Covid resulted in a net cost to council of $41 million, while seven natural disasters over the past six years cost $15 million, of which $7 million had been recovered from federal government disaster funding arrangements.
Various cost-cutting measures totalling $2.4 million over the past three years “are unable to fully offset the impact of recent high inflation levels”, council said.
Cr De Luca has called for council to seek cost savings by slashing its $171 million staffing budget — NBC employs 1800 people, including 111 managers, directors and executives earning a combined $25 million — as well as axing “non-core” services such as open-air cinemas and food truck festivals.
“Food festivals is one of the most significant complaints we receive,” he said.
“Local businesses complain that the great number of these trucks that council commissions are from out of area. That could be cut. Then you’ve got a lot of cultural initiatives that no one even goes to. It’s just ridiculous. They even issued a recipe book.”
Cr De Luca said council’s response that any cuts would not touch the sides of its budget shortfall was “absolute bulls**t”.
“We have a greater salary bill compared to even Parramatta Council,” he said.
“Our wages bill and particularly our management is much higher than bigger councils with $25 million under the executive alone. That could be cut by at least 30 per cent. That is a huge return.”
Moving to novated leases instead of buying vehicles would save another $3.3 million, he added.
Cr De Luca called for a broader restructure of the council.
“You’ve got your five directors, then all these executive managers, then managers, but under them you’ve got team leaders, then team co-ordinators,” he said. “They don’t get counted as managers but they’re on excessive salaries. You could take out two to three layers.”
In its 2023-24 annual report, NBC had four senior staff earning a combined $2,846,877, not including the $544,875 pay packet of chief executive Scott Phillips — nearly as much as Australia’s Prime Minister.
Northern Beaches Mayor Sue Heins defended Mr Phillips’ salary on Wednesday night, telling Channel 10’s The Project it was “not unusual”.
“So we don’t have a liquidity problem,” she said. “We also, like all councils at that very senior position, that is a position that is not coming under any award. We all look and headhunt for people that we’re looking for. So our CEO’s rate is not unusual.”
NBC hired Mr Phillips in 2023 on a five-year contract. He was previously the CEO of Local Government NSW, the peak body representing councils.
Mr Phillips said in a statement at the time that he was “passionate about working in local government” and believed in “delivering the best value service to the community and exceptional customer experience, backed by an effective and highly sustainable organisation”.
According to analysis by The Daily Telegraph, NBC pays its top executives more than nearly any other council in metropolitan Sydney.
“Our employee costs are consistent with industry benchmarks, and we have some extremely high-performing employees whose skills are regularly recognised through industry awards,” a council spokesperson told the newspaper.
Cumberland City Councillor and former Mayor Steve Christou blasted NBC for its “laziness and incompetence”.
“I’ve been saying this for years — the wastage in local councils is tremendous,” Cr Christou said in a statement.
“Overstaffed with fat cat CEOs and upper management who love to waste ratepayer money on woke culture wars rather than representing the ratepayers’ interests. Rather than slug ratepayers with a 40 per cent hike in council rates they should order the general manager to undergo a restructure of the organisation and identify where money can be saved.”
Tuesday night’s fiery meeting had to be stopped twice due to members of the public shouting at councillors, and multiple people watching the proceedings walked out in frustration.
“Disgusting,” Narrabeen resident Jenny told Manly Daily.
“They are treating us like idiots. The Mayor sounded like a schoolteacher chastising us. A lot of us are struggling. This is going to send people and a lot of small businesses to the wall.”
Cr De Luca said he had received calls from constituents “in tears saying ‘we can’t afford this, we’re going to have to sell our unit’”.
Rates, which are levied on the basis of land values, are the council’s main source of income, currently making up 44 per cent of revenue.
NBC covers roughly 50 suburbs stretching from Palm Beach to Manly and represents about 267,000 residents.
A community engagement process polled residents on several options, including staying at the rate peg — the maximum amount set by IPART that councils can raise rates without approval for a special variation.
Fifty-one per cent of the roughly 6000 respondents backed no change, or to “reduce” service, while 32 per cent supported option two, which would have maintained services while still increasing rates by a sizeable 31.1 per cent over three years.
But council nevertheless voted in favour of option three, “improve services” — an option favoured by just 11 per cent of respondents — to permanently increase rates by 39.6 per cent.
“While many of the survey respondents indicated they did not want an SV, there was also support for levels of service to be improved, which is not possible without a rate increase,” council said.
The application to IPART must be made by February 3. Ratepayers will then be able to make submissions through a public consultation process.
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