Central Coast Council suspended after budget blowout

An NSW council went bankrupt and asked the state government for a bailout – then the government made a drastic decision.

Central Coast Council will be run by an administrator who will seek to shore up its spiralling finances.

NSW Local Government Minister Shelley Hancock pulled the plug on the council on Friday after Mayor Lisa Matthews made a last-ditch attempt to convince the minister she could turn the situation around.

“Council is clearly addressing the issues and risks and taking action to ensure proper fiscal management,” Ms Matthews wrote in a submission to Ms Hancock earlier in the week, proposing to chart a “way forward” together with the minister and to appoint a temporary adviser and a financial controller.

But it was too little, too late.

Ms Hancock wrote in a statement her chosen interim administrator Dick Persson will “restore the proper and effective functioning of the council.”

Mr Persson was described as an experienced local government administrator with a proven track record of fixing similar issues in the past.

He has previously been administrator for Warringah and Port Macquarie-Hastings Councils after they were dismissed in the 2000s, and has held senior roles in the NSW, Queensland and Federal governments.

He will be joined by Rik Hart, described as a former local government general manager with decades of experience.

“Dick Persson and Rik Hart bring with them the knowledge, skills and experience needed to restore the financial sustainability of council,” Ms Hancock said.

The council has blamed a ruinous financial year on external forces, including natural disasters and the COVID-19 pandemic.

Last week, it confirmed a $41 million deficit reported in March had ballooned to $89 million.

The council proposed a 100-day recovery plan, boasting it would be “a multifaceted approach to address the current liquidity issues and introduce structural changes aimed at ensuring the longer term financial sustainability of council operations”.

But Ms Hancock was unimpressed.

“The local community is sick of excuses from council. In the two weeks since council’s financial dire straits came to light, all council has done is write letters, issue media releases and set up a finance committee,” she said in a press release announcing the council would be suspended.

The Central Coast Mayor told the Express Advocate newspaper on Friday she was “really disappointed” by the suspension.

“Just to say ‘you are gone’ really makes me angry,” she said.

“They have taken emails straight away and are asking for laptops and swipe cards. It looks like we are criminals. Councillors didn’t cause this.

“I hope over the next 12 weeks someone gets to the bottom of it so the truth can come out.”