The NSW government is moving to sack the Central Coast Council over a financial crisis after being forced to cough up $6.2 million in emergency funding to ensure thousands of workers and suppliers are paid.
Local Government Minister Shelley Hancock issued a scathing statement on Wednesday saying she would issue the council with a notice of intention to suspend it and appoint an interim administrator, given the council's "abject failure to address the consequences of its own financial mismanagement".
The government had no alternative but to forward $6.2 million to the council to ensure more than 2000 council employees were paid on Wednesday, she said.
"It's hard to think of a more fundamental failing of a council than to pay its own staff," Ms Hancock said.
"Council reached a new low last night by deciding once again to approach the government for a bailout at the risk of council staff not being paid.
"To use its own staff as bargaining chips is reprehensible from a governing body that has failed to address its own financial failings," she said.
At a council meeting on Monday night, the council outlined its dire financial position blaming "a year of natural disasters and the impact of COVID-19".
A statement on its website says its budgetary position has deteriorated since March with its deficit blowing out from $41 million to $89 million.
Under the Local Government Act, the minister is required to provide the council with the opportunity to make any submission before making a final determination on suspension.
The council has seven days to make a submission as to why it should not be suspended and an independent administrator appointed and the minister must consider any submission before making a final decision.
Suspension would apply to the mayor and councillors but would not affect council staff and daily operations. An interim administrator would perform the functions of the mayor and councillors.
The move by the minister came after the United Services Union lodged urgent proceedings in the NSW Industrial Relations Commission seeking an intervention to ensure workers were paid.
The council was formed in 2016 following the forced amalgamation of Gosford and Wyong councils.
CEO Jamie Loader said his immediate focus was on cutting expenditure.
Mayor Lisa Matthews announced a '100 day action recovery plan', promising to "ensure essential services are maintained and the impact on our community is minimised".
The union said the crisis followed recent revelations from the NSW Audit Office that the council had breached the law by spending more than $13 million collected in developer contributions on administration costs between 2001 and 2019.
"Workers are rightly shocked and concerned by revelations that Central Coast Council's financial crisis has escalated to the point that there isn't enough money available to pay wages this week," USU general secretary Graeme Kelly said.
"This is a truly extraordinary situation. It is something you might see in an impoverished developing nation, but it should never be the case at one of the largest councils in NSW."
Australian Associated Press
