A marathon four hour meeting of Kiama Council has heard just how close it is to government intervention.

Mayor Neil Reilly revealed that late last week the Office of Local Government contacted the CEO and made clear it was at top of mind for them to install a Financial Controller.

This is usually a precursor to the Office issuing performance improvement orders, the first step towards administration.

In a passionate speech, he appealed to councillors to make urgent decisions to show that they were listening to words of the Minister of Local Government in her letters to them [Encouraging meeting with the Minister].

He quoted advice from the Audit Risk & Improvement Committee (ARIC), “We believe this to be your first and final warning. You have one opportunity to satisfy the minister that council can manage its affairs. This is the most serious warning a council can receive, and your response will be critical. We believe that if the minister feels compels to act, it will be in all likelihood setting aside council and installing an administrator.”

And the Finance Advisory Committee, “The correspondence from the Minister for Local Government needs to be treated as very serious and our final warning. Kiama Municipal Council needs to go back to its core business running the LGA and this necessitates selling Blue Haven.”

Councillors at an earlier meeting

However, when the Meeting agreed to moving the discussion of Blue Haven out of confidential into the public meeting, the Mayor’s motion to call for expressions of interest to explore the sale of either all or parts of its Blue Haven operations was lost 5:4 (Reilly, Croxford, Brown and Steel for).

Instead, Deputy Mayor Imogen Draisma’s motion was passed on the same division. In brief, it:

• noted the need to improve cashflow, and restore cash reserves to the order of $30-40 million by exploring all divestment opportunities, including the sale of Havilah Place (the old Blue Haven aged care home) and the Barney Street Quarry (leased to Burnetts on Barney)
• raised the spectre of service reductions and cost efficiencies, paid parking for visitors and a special rate variation
• looked to continue the work on the sell/keep/lease options for Blue Haven
• looked to investigate options to use sale revenue to generate income
• saw the need to engage in community consultation and reassure residents of Blue Haven that the quality of care and standard of service will be maintained
• foreshadowed further expenditure cuts at the Quarterly Budget Review.

The question is how the Minister will view this decision, and others that are to be made at an extension of the confidential meeting tomorrow (Wednesday 21 Sept).