Council responds to Minister’s letter on performance orders
Published on 26 October 2022
Kiama Council has formally replied to the Minister for Local Government’s letter about issuing a performance improvement order and a financial adviser.
The reply was in response to the letter received from the NSW Minister for Local Government, the Hon. Wendy Tuckerman on 11 October: Notice of Intention to issue a performance order under section 438A of the Local Government Act 1993. The deadline to respond was 25 October.
In a draft letter endorsed by Council on 21 October, Council outlined 3 key positions on the proposed Performance Improvement Orders.
Council’s position on the proposed Performance Improvement Order:
- Kiama Municipal Council accepts the fact the State Government of NSW has compliance and regulatory responsibility of Local Governments. We understand that given the financial position of Council, the incomplete audit of the financial statements for the year of 2020/21 and historic legacy issues facing the organisation, the issuance of an Improvement Order may be necessary.
- Kiama Municipal Council objects to the appointment of a Financial Advisor, due to the demonstrated commitment to addressing these issues, with the vast majority of the actions noted in the Schedule of the Performance Improvement Order already underway, or complete. Council’s evidenced transparency with the community and the relevant key State agencies in approaching these challenges is well documented and will continue. Council is of the view that the appointment of a Financial Adviser would be cost prohibitive for an entity in our circumstances, and respectfully requests that if appointed, the State Government be responsible for the remuneration of this position. The legislative purpose and functions of a State appointed Financial Adviser are also not immediately apparent to Council.
- Kiama Municipal Council proposes to submit for approval to the Office of Local Government the second stage of the Organisation’s Strategic Improvement Plan and commits to including those items listed in the Schedule in the document. This document would be submitted on 31 October 2022 for accountability purposes and will clearly document the strategies required for cash flow improvements and organisational improvement.
Yesterday Council sent the endorsed letter and a detailed submission on the schedule to Minister Tuckerman for her consideration.
The 15-page letter is accompanied by more than 55 attachments, all of which demonstrate through hard evidence that Kiama Council has acted proactively since first self-identifying issues within the organisation.
“We have asked the Minister for the chance to keep being proactive, without the need for Performance Improvement Orders or the expensive appointment of a financial advisor,” Kiama Mayor Neil Reilly said.
Council has also proposed to create a second stage of its own Strategic Improvement Plan, to assist in the continuation of this important work and offered to undertake monthly reporting to the Department as a form of compliance.
Cr Reilly said the work we have done so far shows clearly that many of our issues stem from dual involvement in aged care and local services. This is being addressed with the recent decision to sell Blue Haven Bonaira.
“I thank my fellow Councillors who have supported our return to core local government services. This is a time of great change and great challenge for Kiama Council. No change is ever easy. But fundamentally, we need to focus on being a local government that is here for our community, not just today, but in two years, 10 years and well into the future,” he said.
Kiama Council CEO Jane Stroud acknowledged the hard work of the sitting Councillors and staff who have been working to improve our situation.
“I know we have approached things differently to other Councils, and not everyone has appreciated that. We have been proactive in facing our issues head-on, being transparent and working collaboratively to address our financial problems.”
“This has involved self-reporting to ICAC and to the State on serious matters such as potential maladministration, potential fraud and corruption as well as going concern status. It has been an arduous and sometimes controversial process, but fundamentally the right thing to do,” said Ms Stroud.
Ms Stroud said Kiama Council’s response shows almost all the matters listed in the Minister’s letter are issues that we found, brought to public attention and have taken comprehensive actions to improve. Most actions listed in the schedule are well underway, if not complete.
“We know what the road ahead looks like to restore our business and better manage the financial position of council in the short and long term,” said Ms Stroud.
“This is a wonderful Council with a proud history but, like many local governments out there, we aren’t perfect. Investment and service decisions made historically have overstretched our financial means and organisational capability.”
“We are working hard and continuously to fix the issues. I sincerely hope we can keep going on the path of self-directed improvement, rather than have State based sanctions imposed which will create additional financial burdens for Council. However, I do fully appreciate that, given the gravity of the challenges, the Minister needs to act as she sees fit, and we will accept her decision and continue to work positively on improving the business,” she said.
Cr Reilly said: “We’re in a period of intense transition at Kiama Council, and we’re working hard to get where we need to go. We have put an unprecedented amount of information on the public record, which shows how we got here, and which has been confirmed by the Office of Local Government and the NSW Auditor General.”
“We simply can’t afford to stop, we must focus on next steps – our stage two Strategic Improvement Plan, realising key asset divestments and re-focusing on our core business of delivering Local Government services.”
Read our response to the Minister’s letter here:
1-Kiama-Council-response-to-Minister-Tuckerman_resolution.pdf(PDF, 229KB)
2-Kiama-Council-response-to-Minister-Tuckerman_main_letter.pdf(PDF, 288KB)
3-Kiama-Council-response-to-Minister-Tuckerman_detailed_response.pdf(PDF, 247KB)
Image: Kiama Mayor Neil Reilly and CEO Jane Stroud.