Persson calls for administration while merger proceeds
Central Coast Council administrator Mr Dick Persson has recommended "a formal inquiry to determine what is needed to achieve the successful merger of the two previous Councils" in his final report to Local Government Minister Ms Shelley Hancock.
He also recommended the Minister "prevent the return of the currently suspended councillors" and "delay the September election" until after his recommended inquiry.
Mr Persson rejected calls for a fresh inquiry into what went wrong, stating that he had already done this.
"Usually such an inquiry is held by an independent person with extensive experience in the subject matter.
"Well with due respect to some members of the community, that is who and what I am.
"I have carried out an independent investigation into what has occurred at Central Coast Council.
Mr Persson acknowledged that "the merger of Gosford and Wyong Councils did not have strong community support at the outset".
"Regrettably, the performance of the councillors did little to build community support.
"In fact, I feel there is quite widespread community antagonism towards the new entity."
Mr Persson implied that the situation was exacerbated by the fact that councillors were not faced with a merged council as a fait accompli when they were returned in 2017.
"There is considerable evidence that the merger was incomplete when the elected body returned in September 2017, and that there was little interest or effort in gaining further efficiencies-savings by the newly-elected body."
He said that neither the councillors nor the former chief executive were interested in achieving "merger-related savings".
"On the contrary, the council expanded all aspects of council spending with little regard or understanding of the financial consequences."
Mr Persson said: "My investigation has concluded that by far, the greatest reason the council became insolvent was due to mismanagement of their budget over the years following the merger and leading up to their suspension", although "unusual circumstances ... accelerated the collapse of the operating budget".
"Nothing excuses the negligence of those in charge for their relative inaction, which was manifestly much too little and much too late," he said.
Mr Persson said the use of Restricted Reserves, while not unimportant, was not the reason why the budget blew out.
"Even if those in charge thought those funds could be used for their expanded spending, they must have known they would eventually run out.
"To use them for capital spending is one thing, but to use them to prop up a rapidly deteriorating bottom line is inexcusable at best, and negligent at worse.
"None of those involved have explained what they were going to do when the Restricted Reserves ran out."
Mr Persson said that the best outcome for the council and the Central Coast would be a further extended period under administration.
This would allow the new general manager and the new administrator "adequate time to complete the merger and re-build community confidence, without the distraction of elected representatives intent on playing out broader political agendas".
Central Coast Council agenda 2.1, 15 Apr 2021