Central Coast Council was put into the hands of serial administrator Dick Persson at the end of October last year. The reason, according to the NSW Minister for Local Government, Shelley Hancock, was council's "abject failure to address the consequences of its own financial mismanagement".
Across the media the headline was predictable - Council sacked! - and we held our noses expecting the smell of uselessness, waste, cronyism and corruption when investigations were complete.
But, not smelly at all, says Mr Persson, in his interim report to the minister last December. Concerned at widespread comment on social media, Mr Persson says there is "no evidence of theft or corruption". Rather, says Mr Persson, this is a story of "the failure of a Council to understand or practise the basics of sound financial management".
The interim report calculates that more than $200 million in operating losses had been allowed to accumulate on council's books over the past four years. Moreover, instead of a touch of the frugal, given the persistent losses, council had approved an expanded capital works program, up by $69 million in 2020-21, an increase of about 40 per cent over the previous two years.
When you read the expanded capital works agenda that landed Central Coast Council in trouble, you don't see a list of indulgences.
Wouldn't ongoing large operating deficits and unfunded capital expenditure be obvious to councillors approving an annual budget, you ask? Not necessarily, says Mr Persson.
Indeed, his report acknowledges the complexities faced by councillors in understanding the council's financial difficulties. A major problem, says Mr Persson, has been the use of "restricted funds" for expenditure beyond the purpose for which they were being held. Evidently the biggest stash of cash was in council's water and sewerage accounts, and releasing it to fund projects in other portfolios proved irresistible.
So, is this where the story ends, Mr Persson having completed his clean up, allowing council, suitably disciplined with a new CEO, to get back on the job? Unfortunately, no. Mr Persson's clean up involves a large dose of austerity for the Central Coast. There will be major staffing cuts, perhaps 250 frontline council workers. A significant rise in rates seems inevitable. Land assets will be sold. The capital works program will be slashed.
We need to ask what is the moral to this story? Should we praise the state government for the clean-out it organised, bringing another council to heel? Or does the case show that reform of local government in NSW has a long way to go still?
Consider first the size of the task that sits on the desk of Central Coast Council following the amalgamation of Wyong and Gosford councils in 2016. The resident population is 350,000 - to which should be added the 100,000 visitors, mainly Sydneysiders, that the coast hosts on average every week.
The amalgamation created a jurisdiction of a vast 1680 square kilometres of land, as diverse as any imaginable. The local government area runs from Frazer Park in the north, down the coast to Patonga Beach in the south. It includes the fragile lakes system that abuts this coastline, and the enchanting estuaries of Broken Bay and the Hawkesbury. To the west, council has custody of forests and farmland stretching from Wiseman's Ferry in the south to Bucketty in the north. As well, the council manages this region's water supply and drainage system, a unique responsibility in NSW for a major regional council.
When you read the expanded capital works agenda that landed Central Coast Council in trouble, you don't see a list of indulgences. The projects are plain - no big stadiums, no flashy buildings - the things you'd expect from a competent council offering basic services to a large, widespread community. The bigger items are improvements to roads, a struggling IT system, and waste processing facilities.
Then there are pages of smaller items, upgrades to public spaces that line the beaches and lakes, local drainage, footpaths, caravan parks, forest roads for fire protection, public libraries, sporting facilities, all the basic things you look to council to deliver.
Slapping down a council that doesn't know the rule book cover-to-cover may have merit. But until local government receives adequate funding and is afforded genuine autonomy, then councils in NSW will continue to fall over - and community assets will deteriorate even further.
Phillip O'Neill is professor of economic geography at Western Sydney University.
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