Kiama Council has 14 days to respond to a Notice of Intention to Issue Performance Improvement Orders from the Minister for Local Government, Wendy Tuckerman.

In her letter, Ms Tuckerman also says, “In my opinion, a temporary adviser with the requisite financial expertise is needed to advise Council, to report on and oversee the implementation of the financial aspects of the Performance Improvement Order.”

The issuing of Performance Improvement Orders is usually a stepping stone to administration.

Ms Tuckerman’s letter is now available on Council’s website to be tabled at the Extraordinary Meeting being held on Thursday 13 October, but is expected to be discussed at the Ordinary Meeting on 18 October.  

In it she lists her concerns as:

1. There is evidence to suggest that Council has failed to meet its legislative responsibilities in relation to its financial management. Specifically, Council has accessed restricted funds without approval and used those funds for purposed other than for which they were intended in breach of the Local Government Act 1993 and the Environmental Planning and Assessment Act.
2. There is evidence to suggest that Council may not be able to pay its debts as they fall due.
3. There were, and continue to be, serious risks faced by the Council due to its financial position having deteriorated to the extent that it had insufficient cash to cover all internal and external obligations.
4. There is evidence to suggest that Council’s records do not adequately indicate Council’s true financial position.
5. There is evidence that Council has not effectively monitored its liquidity.
6. There is evidence that there have been inadequacies in relation to the oversight and reporting on the financial circumstances of the Council.
7. There is evidence to suggest that Council has not fully or correctly reported the construction costs of the Blue Haven aged care facility (Blue Haven).
8. There is evidence to suggest that Council has not operated the Blue Haven aged care facility in accordance with relevant legal requirements of the Aged Care Act 1997 (Cth).
9. There is evidence that the continued operation of the Blue Haven has caused and is causing significant financial stress to Council.
10. Council has failed to meet its statutory reporting obligations with respect to its 2021/2022 financial statements.

“I respect the Minister’s right to respond to Council’s ongoing financial crisis, and she has made her intentions clear,” says Mayor Neil Reilly.

“My feeling is that we have had 10 months and many opportunities to correct things, but we have chosen to prevaricate and councillors were warned in September that this was our last chance. It seems as if this chance may have passed us by.

“If councillors delay once again making a decision [at the Extraordinary Meeting discussing the sale of Blue Haven Bonaira], it will confirm the Minister’s fears for our financial future.”