A show of unity at an Extraordinary Meeting, held to make the NSW Auditor-General’s letter to the Minister for Local Government public, may help Council ward off the appointment of an administrator.

Kiama councillors unanimously spoke of the need to work together to correct Council’s financial situation with a sense of urgency.

The letter, which relates to the 2020/21 year, notes significant concerns about going concern issues, the adequacy of Council’s books and records, and the use of externally restricted reserves [Letter from the Auditor-General now public].

“We have a problem here that we have to face,” said Councillor Matt Brown who last week called for the letter to be released, claiming that Council was insolvent (see Mayor's response below).

“It now falls upon us to work in collaboration with our staff and government agencies to make sure we are a going concern and that we make rational decisions that are on behalf of all of our ratepayers.”

Councillor Croxford commended the work of the CEO and other key players, and spoke of the need to work together, “I would ask we continue to respect the intent that we are all trying to achieve, despite where you come from.”

Councillor Draisma echoed the sentiments, “I look very much to continuing to deliver what we have promised at a previous Council meeting, to deliver long term solutions to the issues that we face, and to work constructively with our stakeholders, including the Auditor-General, the Office of Local Government and the Minister to come up with the appropriate solutions to the challenges we face.”

She earlier unsuccessfully put forward an amendment to highlight that the situation was caused by decisions made in the past, and give protection to employees and services.

The sale of Akuna St will help with cashflow

While querying some aspects of the letter’s analysis, Councillor Rice said “None of us would deny that Kiama Council’s financial situation is delicately balanced and our Strategic Improvement Plan seeks to address this. The multiple challenges to Council’s finances and efficiencies remain, and we must all keep working together to turn this situation around.”

Councillor Keast, a practising chartered accountant, spoke of the challenges of not having reliable financial figures on which to base decisions while needing to move forward. “Today we have to formally acknowledge what the issues are. We have a strategic improvement plan, we are securing our revenue and we are looking at our costs. We are communicating what our action plan is and we will continue to provide regular updates.

“Our community needs certainty and clarity about the way forward, and collectively we will work to improve the financial and operational performance of Council.”

Councillor Renkema-Lang spoke of the need for councillors to work collaboratively and respectfully, and said, “Importantly, while we must as a matter of urgency demonstrate that we are a going concern, that we have sufficient liquid assets to fund Council’s liabilities, we must also understand any risk with decisions that we make in haste now and what they will mean for the longer term sustainability of the Council.”

Mayor Reilly warned that given the need urgency there is a risk in delaying decisions to wait for more information, “Sometimes that means taking excellence over perfection. I know those people who are keeping an eye on this Council are after us to be decisive, intelligent and insightful with our judgment.”

He told The Bugle earlier in the day that Council isn’t insolvent.

“If we don’t take some serious steps, in twelve months’ time we may be. The big problem is the $45 million we owe TCorp in August next year. We have $28 million set aside for that, plus some money from Akuna St and other asset sales.”

Unfortunately the possible sale of five blocks Council owns at Spring Creek is now off the agenda, with the State Government declining to lift a covenant that limits the ability to build housing on the parcels, until the quarry activities cease.