CCBR Business Review

15 C E N T R A L CO A S T CO U N C I L N E W S CENTRAL COAST COUNCIL has notified the Independent Pricing and Regulatory Tribunal (IPART) of its intention to apply for a Special Variation (SV) of either a one-off ten percent remaining in the rate base for seven years or a one-off fifteen percent, remaining permanently in the rate base, inclusive of the 2021/22 rate peg of 2%. The application for a rate rise is proposed as of part of a suite of measures being considered to address the current financial situation Council is experiencing. “I want to assure the community that this is not a done deal. It remains one of the options on the table,” Administrator Persson said. “We need to keep our options open here as a rate rise may be needed to ensure our community can continue to receive the ser- vices they want and need. “IPART is a completely independent pro- cess and the community will be consulted on a rate rise if we go down that path. We can’t put rates up on our own. “We are exploring all other options as well including the sale of assets, borrow- ings, a reduction in our management struc- tures and restrictions on spending which will all help our bottom line.” Meanwhile Council has surveyed ratepay- ers as to their attitude to the rate increase with the survey closing on 1st February. Acting CEO Rik Hart said he was closely monitoring the community sentiment as it was critical that the community were heard on this very important matter. “However, I need to make it clear that no rate rise is not a viable option. Council needs a rate rise to repay the restricted funds spent on community infrastructure and services and to deliver a level of service to the community that ensures our assets and essential services are maintained. “I urge all community members to keep an open mind, consider the information put before them, and to provide their feedback before 1 February.  “We are committed to capturing as much community feedback as we can in order for the Council to consider whether or not to formally apply to IPART for a Special Variation of the rates,” Mr Hart said. Rate rise inevitable – thanks to wilful incompetence Central Coast Councillors – Elected 2017 Suspended 2020 (left to right) Jilly Pilon (Lib), Chris Bourke (Lib), Jeff Sundstrom (ALP), Doug Vincent (ALP), Jane Smith (Central Coast New Independent), Jillian Hogan (ALP), Chris Holstein (Ind), Bruce McLachlan* (Ind), Lisa Matthews (ALP), Richard Mehrtens (ALP), Rebecca Gale (Lib – Resigned 2020), Greg Best* (Ind), Louise Greenaway (Ind), Kyle MacGregor (ALP), Troy Marquart (Lib – Resigned 2020) *Only Clrs McLachlan and Best called out the financial mismanagement of Council. The NSW Government has extended the suspension of Central Coast Council for an additional three months. Minister for Local Government Shelley Hancock said it followed a request from interim administrator Dick Persson AM for more time so he can continue to develop and implement a comprehensive recov- ery strategy to address the financial crisis. “The interim administrator’s 30-day report alone made a compelling case for more time to address the significant financial issues and dysfunction plaguing the council,” Mrs Hancock said. “There is no doubt that he needs more time to develop and implement his recovery strategy to restore stability and address the significant reputational, finan- cial and organisational issues. “In particular, Mr Persson is focusing on recruiting a new general manager and putting a new budget in place for next financial year. “Mr Persson and acting general manag- er Rik Hart have done an outstanding job to date and I thank them for their efforts in these very challenging circumstances.” Under the Local Government Act, the Minister can extend the period of suspen- sion for up to three months if she believes it is necessary to restore the proper or effective functioning of the council. As required by law, notice has been served on the council advising of the intention to extend the period of suspen- sion. The current three-month suspension period expires on January 29. The order to formally extend suspen- sion until April 29 will be published in the Government Gazette Minister extends Council suspension Central Coast Administrator, Dick Persson, issued a statement to explain his decision to make a $380,000 termination payment to former Chief Executive Officer, Gary Murphy. “Ratepayers’ anger about my decision to agree to a full payout of the former CEO’s contract is totally understandable,” Mr Persson said. “I was angry too. “I was angry because, as I said in my 30-Day Report, the former CEO did not ade- quately perform key parts of the role and, therefore, was a major contributor to the financial decline confronting the Council. “So, why did I agree to it? I spent a lot of time challenging the legal advice and work- ing through the contract. “While I accept responsibility for my deci- sion, I don’t believe I had a realistic alterna- tive given the provisions of the contract and the laws governing employee legal rights.” “So, why pay 38 weeks salary to someone who I felt had not performed to an accept- able level? “The contract lays out several options to remove a CEO. The option I ultimately agreed to provided the most clear-cut path. “No reason needed, but 38 weeks’ pay. “The path to remove a CEO for unsatis- factory performance (still with 13 weeks’ pay) would have required me to conduct a performance review and then provide the CEO an opportunity to respond. “This process would have taken at least eight weeks. “Proving the poor performance would have been made difficult by the previous Council having determined his perfor- mance as ‘meets expectations’ in the two previous CEO performance reviews. “This timetable also assumes that Mr Murphy was available to be interviewed. “On two occasions, I requested a meeting and he declined to meet. “Given all this, I stand by my decision as the best for the long-term future of the Council, its ratepayers and staff.” Persson said he regretted that he could not find a better way forward. Mr Persson said having reached that deci- sion, a new CEO was needed to lead Council through the challenging times ahead. Therefore, the most important thing was to remove the former CEO quickly to allow the recruitment of the new CEO to commence. “Recruiting a new CEO typically takes three to four months, so getting started became the major priority,” he said. CEO $380,000 termination payment explained CENTRAL COAST BUSINESS REVIEW FEBRUARY 2021