Life under a client dictator… (Riktator)

Not surprisingly, when you live under a local government dictatorship ratepayers can expect to be seen as no more than a heard of council milch cows – to be milked completely and utterly dry. And that’s exactly what is happening on the Central Coast! Council Administrator Rik(tator) Hart wants every last drop to appease his master, the NSW State Government, and  his latest money grab – a 15% rate increase for a further seven years – could well leave many ratepayers facing penury.

13 May 2022

ALAN HAYES

 

CENTRAL COAST COUNCIL’S financial problems are a direct result of the Baird-Liberal-Government, it’s as simple as that. A merged mega council that the State Liberal Government thought would give them absolute control of the area, except that there was never any due diligence – there were too many skeletons in the closet; skeletons that are still hiding behind those closet doors protecting their secrets and dreaming up new ways to milk ratepayers for their own self-serving benefit.

 

The clandestine culture of lies and falsehoods kept secrete the true financial position of the Council from the elected councillors, until it was too late – the mud had already hit the fan when councillors became aware of the complete facts. So, why were councillors kept in the dark and then blamed for Council’s financial mess? Why are those certain senior staff , who continue to ply their nefarious trade of deceit and dreaming up new ways to tax ratepayers, still employed?

 

Let’s face it, the Central Coast suffers an administrator that has allowed millions more to be wasted on yet another airport master plan, while at the same time cries poor. The previous airport investigations have all confirmed that expanding Warnervale airfield is not a viable financial option. Then to ‘add more milk to the pail’, millions more is now going to be spent on a desalination plant – allegedly to drought-proof the Coast against climate change. This scheme was previously flushed down the toilet, where it belonged, by Wyong Council as an unsustainable and expensive bad idea. The damage to the environment was also an overriding factor in that decision.

 

So, why was Administrator Hart keen to endorse this pricey scheme? The science says that west of the Great Divide climate change will cause longer periods of drought but the eastern seaboard, including the Central Coast, will experience rain, rain and more rain – worse than we have currently been experiencing. The Central Coast will become the ‘Big Wet’, not the ‘Big Dry’.

 

The answer to Hart’s decision was that it allowed those ‘closet skeletons’ to gouge for an excessive water rate charge - allegedly to pay for future infrastructure that is still a ‘pipe dream’. Sound familiar – it should, it’s straight out of the Morrison ‘yet to be invented technologies’ answer to climate change.

 

And while Central Coast ratepayers are coming to grips with increased property, water and sewerage rates, and wondering where their next can of baked beans will come from, petrol prices are still on the increase, the cost of living is spiraling upwards, and mortgage rates, which went up by a quarter of a percent, are destined to rise even further.

 

Not satisfied with the milk pails only half full, Rik(tator) Hart has now hit ratepayers with the ‘double whammy’ – IPART has approved Central Coast Council’s application to maintain the 2022 Special Rate Variation (SRV) at its current level for an additional seven years. That’s ten years in total, which now begs the question – why did IPART overturn its previous determination.

 

IPART Chair Carmel Donnelly said that the tribunal has considered community concerns along with Council's demonstrated need for additional revenue to ensure financial sustainability and service provision. "There was "a genuine financial need for the rise to remain for an additional seven years to enable services to be maintained." NOT TRUE!

 

For those of you who don’t remember, Council pretended to consult with the community over the special variation in rates. They did this with a loaded web-based questionnaire that did not allow you to proceed through the feedback form unless you gave answers that ultimately favoured the desired outcome that Council wanted to achieve.

 

Based on Council’s original SRV application, IPART recommended that the SRV only apply for three years and that within that time Council should get its financial house in order. But doing so was not on Rik(tator) Hart’s agenda. Selling off vast amounts of community assets, resubmitting a SRV application and making a bad decision on an industrial land sale, and treating ratepayers as the Council’s milch cow heard will allow him to move quickly onto more lucrative greener pastures.

 

Democracy truly at work – NOT!

 

"In March 2016, weeks before its forced amalgamation with Wyong Council, Gosford City Council’s CEO declared that its total loss from dodgy Collateralised Debt Obligations (CDOs) in the Global Financial Crisis totalled $19.6 million.

 

"At around that time, according to the report of Roslyn McCulloch, who was the Commissioner for the Public Inquiry into Central Coast Council’s 2020 financial meltdown, Gosford City Council had $155 million in outstanding loans and Wyong Shire Council had $178 million in loans outstanding.

 

"Both were deemed to have a healthy debt service cover ratio (DSCR) of 3:1 against a benchmark of greater than 2:1 and it was concluded that the loans could be adequately serviced.

 

"Just a few years later, at the end of 2020 Rik Hart, in the role of interim general manager of the Central Coast Council (under administration), has said (repeatedly) that he was scrambling to find commercial lenders willing to bail out the council to the tune of an additional $150 million and Interim Administrator Dick Persson was telling anyone who would listen that the Council was in debt to the tune of over $500 million." (Source: thepoint.net.au).

 

So, what happened? Rik Hart secured a commercial loan for $150 million, the terms and conditions of which are still unknown, except that it was expensive to service and that to do the deal Council had to cut infrastructure services to the bone. Yet Rik(tator) Hart and IPART would have the community believe that the 15% SRV is to guarantee a continuation of services - IT IS NOT!  The SRV is to service the Council borrowings, not provide funding for much-needed services, and is something that could have been avoided had the Liberal State Government took ownership of its merger blunder.

 

If climate change doesn't end up devouring the Central Coast, the interest on commercial loans negotiated at the end of 2020 may drown the region’s debt-riven Council.

 

But it gets even worse - in comes the triple whammy for those Coasties living in the rural areas of the Coast. Rural property owners harvest their own water, provide the infrastructure for their own on-site sewerage systems, for which they pay council a fee for the privilege of treating their own effluent, and do not have the benefit of any form of drainage supplied and maintained by Council. Yet Rik(tator) Hart now has secured agreement from IPART to have water, sewerage and drainage fees included as part of the general rates. Rural landowners will very soon have to pay for three services that they do not and will never receive- all the hallmarks of a true dictatorship and an individual obsessed with power and forcing his will upon the people.

 

Mr. Hart's only interest, however, is a black bottom line apace of Council’s principal duties and not the plight of ratepayers. Why? Because he’s not a Coastie and he is only concerned in appeasing his master, so that he can be given yet another high-paying job!

 

Rik Hart is failing to understand that the Council should be more concerned with its core operational responsibilities before embarking on grandiose schemes to placate the whims of the sycophant ladder climbers still employed in senior positions. These ambitious schemes should come from the surplus funds, not the ratepayer’s pockets. Yet ratepayers are continually being asked to dig deeper into their pockets, while at the same time Hart has the audacity to say “the continuation of Central Coast Council’s current rate structure for a further seven years is a sensible decision”.

 

“This outcome allows Council to continue to maintain current service levels, comply with current banking requirements and most importantly, allows us to continue without interruption our 10-year long-term financial plan that provides long-term financial stability for the organisation,” Mr. Hart said.

 

Yet despite the sale of assets, and the windfall of all that extra money, the basic obligations of Council seem to be left wanting – such basic criteria as road maintenance, potholes that continue to get deeper and wider, the majority of them remaining unfixed,  kerb and guttering, and poor maintenance of Council facilities that is lacking and unlikely to improve, will continue despite the Administrator’s spurious claims.

 

It’s difficult for ratepayers to accept that they should be paying off a $150 million loan that they didn’t sign up for just to bail out the State Liberal Government’s titanic merger blunder. A loan that could have now almost, if not fully,  been discharged had it not been for the Council’ lack of due diligence in the industrial land sale at Warnervale.

 

Is there the smell of a dead rat in the Warnervale land sell off?

 

Lake Macquarie Developer, Winarch Commercial says it made a gross profit of more than 120-million dollars after selling-off 25 lots in the Warner Business Park, which it bought from Council last July, for 27-million. This was land on the corner of Hue Hue Road and Sparks Road, which Council previously purchased from Terrace Towers, to develop the Warnervale Airport, for $17 million.

 

In a radio interview with ABC Central Coast Council Administrator Rik Hart admitted that he knew the developer. He said “One of the purchasers I happen to know and I happen to know what their plans are for part of the site”. So, was this land sale at arms-length or just another Liberal Government deal for one of its developer mates?

 

The Stage One Warner Business Park was a legacy asset for the council, which tried to sell it three years ago for $17 million. After purchasing it for $27 million, Winarch Commercial claim that they turned it around in twenty-one days to make an obscene profit at the expense of Central Coast ratepayers.

 

Rik Hart says that all the developers associated costs – connection to the M1 Motorway, electricity, sewage, curb and guttering and road corridors (Services) - has to be taken-into-account, and that Winarch Commercial’s gross profit reflects this. He said 'Service' obligations are “the word gross profit”. Yet Winarch Commercial in their press release said that they didn’t have the obligation to cover 'Services', they just sold the land on because they didn’t want that obligation hanging over them.

 

Rik Hart said that “the purchase was with one individual, who then had a partner… which is the developer”. He then said “I’m not at liberty to talk about what the other person’s plans are, their component, but I am aware of what their thoughts are…”.

 

The contracts for the sale of the Warnervale land exchanged on 30 July 2021 and was sold, according to RP Data, as undeveloped land to Warnervale LF Pty Ltd, a company that was only created four days earlier on 26 July 2021. Nineteen weeks later the land settles – why so long and why to a company that couldn’t have existed when sale negotiations commenced? What was going on behind closed doors?

 

According to an ASIC current company extract, Winarch Commercial Pty Ltd is the only shareholder in Warnervale LF Pty Ltd, a company with a paid-up capital of only $100.

 

According to RP Data and the Australian Securities and Investment Commission (ASIC) the only player in the purchase of the Warnervale land was Winarch Commercial Pty Ltd’s fully-owned subsidiary Warnervale LF Pty Ltd. Mr. Hart’s claim that the purchaser had a partner is misleading and raises even more questions.

 

Back to the rate rise

 

IPART’s decision to extend the rate increases for Central Coast Council to the full ten years should be of concern to struggling local residents.

 

Coast ratepayers have been subjected to the costs of an unsuccessful merger of their local Councils by the State Government resulting in significant cuts to services and higher rates and charges and now they will be hit with a permanent rate increase for a further seven years.

 

Central Coast Labor MPs are calling on the NSW Government and IPART to monitor closely the performance of Central Coast Council with a view to review this decision if the Council is not meeting its stated targets and service delivery.

 

“The current financial situation for many ratepayers is dire given the increase in interest rates, higher inflation and the pressure on mortgage and rent payments,” said Member for Wyong, David Harris.

 

“It is more important than ever, that Central Coast Council, has generous provisions in place to assist people in genuine need when it comes to rate payments. There needs to be sympathetic treatment via payment plans and other strategies to ensure no ratepayers are disadvantaged through no fault of their own and Council needs to articulate through a communication plan what avenues are open to assist people and families who are struggling.

 

“With rising costs of living, stagnant wages and now increasing interest rates these rate increases could not have happened at a worse time.”

 

The Draft Long Term Financial Plan and Delivery Program will be considered in the Ordinary Council Meeting on 24 May 2022 to be placed on Public Exhibition for public comment at yourvoiceourcoast.com.

 

Where do we go from here?

 

The Grapevine has had ongoing conversations with a senior barrister about a class action in respect of the position Central Coast ratepayers have been put in and the ongoing administration of the Council. It would appear that there may be a case to answer and, if so, the Grapevine will inform readers of the process that will be followed and how to join the action.

 

The fact is that the Central Coast ratepayers have been hung out to dry by the Liberal State Government. The public inquiry was a public farce… a blame shifting exercise. And what did the only Liberal State Member on the Central Coast do? Member for Terrigal Adam Crouch put forward a motion in the House on 22 March 2022 and said, “Thanks Ministers for Local Government, Shelley Hancock and Wendy Tuckerman, for ensuring that those responsible for the appalling situation (of Council) are held to account.”

 

Adam Crouch’s ‘bootlicking’ seems to have distracted his eyes from the true facts - who really is responsible for Central Coast Council's financial debacle.

 

A NOT SO PERFECT DAY

JACKIE PEARSON - (thepoint.net.au)

 

The sale of community assets including environmental land, rate hikes and service cuts are expected to continue on the NSW Central Coast even though the public was told the merger between its two old councils in 2016 would result in a “mega council” with a seat at the table to negotiate more funding from the state and improved services for the community.

 

It can be much easier to create a mess than it is to clean one up. On the Central Coast NSW politicians of all stripes appear to have drawn that magical ‘line in the sand’, moved on and told residents and rate payers to get on with it following the 2020 suspension and, finally, the 2022 sacking of the elected councillors. What happen... happened. We’ve had our public inquiry – the public should be satisfied and just move on.

 

The councillors, deemed ultimately responsible for the financial mismanagement of the Council even though they had no control over the finances other than to ‘sign off’ on budgets and reports, were sacked. New processes are being put in place and we have a benevolent administrator (NOT) taking care of us until the next time we are permitted to have a local election – beautiful one day and perfect the next.

 

Royal Commission or Judicial Commission Council inquiry needed

 

The first 23 pages of Commissioner Roslyn McCulloch’s report to the Central Coast Council Public Inquiry read like a justification for a full Legislative Council inquiry into the whole fudged amalgamation process.

 

McCulloch made the point of reminding readers that amalgamation was not a foregone conclusion for Wyong and Gosford – the establishment of a Central Coast Joint Organisation was given serious consideration because the two former councils had a history of working together and shared water and sewer assets.

 

McCulloch reported that in January 2016 the merger proposal for Gosford and Wyong was published.

 

“In his foreword the Minister for Local Government listed the benefits of the proposed merger including a total financial benefit of $135 million over a 20-year period, a projected 119 per cent improvement in annual operating results, potentially reducing the reliance on rate increases through Special Rate Variations (SRV) and a greater capacity to manage and reduce the infrastructure backlog.”

 

None of those promises is likely to eventuate and that cannot all be the responsibility of the 15 councillors elected in September 2017 and dismissed three years later.

 

On 1 May 2019 the Audit Office published its report entitled Workforce Reform in Three Amalgamated Councils (Workplace Reform Report). It looked at Inner West Council, Queanbeyan-Palerang Regional Council and Snowy Monaro Regional Council.

 

The two regional councils didn’t expect to achieve savings or efficiencies from workplace reform within the first three years of amalgamation, according to the report.

 

The report also said that amalgamated councils should be routinely reporting to their communities about the costs and benefits of amalgamation. Councillors interviewed by The Point shortly after their suspension said every request they made for information about the status and cost of the amalgamation was stonewalled by staff.

 

Staff protections under the Local Government Act were cited as the main reason for stopping efficiency gains and that was certainly a factor within Central Coast Council but there is much that went on that cannot be explained by those restrictions.

 

“There were also administrative and logistical barriers to achieving efficiencies including the need to maintain duplicated information technology systems until an integrated enterprise system could be implemented, inconsistent policies, procedures customs and practices that needed to be aligned, and significant staff time devoted to recruitment.

 

“None of the Councils concerned could adequately assess the effectiveness of the changed management efforts.”

 

Following the 2016 amalgamations new councils were required to prepare benefits realisation plans for the Department of Premier and Cabinet (DPC), according to McCulloch but in mid-2017 amalgamation monitoring and support was transferred to the Office of Local Government. “After that time no mandatory reporting of benefits realisation was required.”

 

These comments from McCulloch barely skim the surface of a festering sore spread across at least some of the 17 amalgamated councils created from the 39 that were sacked in May 2016. The current NSW Government certainly doesn’t have the appetite to lift the rug and have a good look at what’s been swept under.

 

It remains to be seen whether the Labor Opposition and cross benches will tackle the state’s local government problem before the March 2023 election. A Royal Commission or a Judicial Commission Council inquiry would appear to be the best antiseptic. Labor has undertaken that, if elected, it would give residents living in merged councils an opportunity to vote on demerging. Why wait – why not push for an inquiry now?

 

Contact your local state MP and encourage them to work with their parliamentary colleagues to call for a Royal Commission or Judicial Commission inquiry into Central Coast Council before the March 2023 state election is held.

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