Kiama Councillors will next week consider adopting a Strategic Improvement Plan, including key actions to ensure the organisation has a balanced budget and a sustainable future.
The Plan was developed by the Mayor, Councillors, CEO and Council’s Finance Advisory Committee (FAC) to address a number of core challenges facing the business which threaten its immediate financial position and future sustainability.
Mayor Neil Reilly said Council has a short window of opportunity to demonstrate to the NSW Government that it is able to meet essential debt repayment and sustainability targets.
“Over the first 100 days of our term since the local government election, my fellow Councillors and I have listened to our community and carefully considered the information presented to us in the by our CEO Jane Stroud, her team and our key Committees about the challenges facing our organisation,” he said.
“We have an opportunity to set things right and ensure Council is on a firm path to sustainability. This will require strong leadership and decisive action, a roadmap for which is set out in the Strategic Improvement Plan.”
The Strategic Improvement Plan outlines the specific course Council must take over the next 12 weeks and longer-term to deliver financial sustainability, as well as issues to be addressed in the areas of governance, administrative and organisational capability, culture and performance.
Kiama CEO Jane Stroud said the Council is currently operating with a deficit operational budget of $4.8 million and has received written concerns from the NSW Auditor-General.
“In my professional opinion, we need to improve the immediate and long-term unrestricted cash flow by at least $20 million to avoid facing these issues again in future,” she said.
The Plan also tables urgent requirements to assess Council’s assets and look at what can be sold, leased or otherwise addressed to improve the organisation’s short-term financial position.
The urgency is due to Council’s requirement to pay the third instalment of its TCorp (NSW Treasury Corporation) loan by August 2023. The amount to be repaid is approximately $45 million.
Council’s Financial Advisory Committee (FAC) Chair Graeme Gherashe said: “It’s time Council had a good hard look at its asset portfolio and the types of services it is in. Do we need to be in all these businesses or is it time to realise our investments and dispose of some assets, so that we are not just asset rich and income poor. Maybe it’s time to switch things up.”
“The FAC has been in constant dialogue with the CEO, CFO, Mayor and Councillors and last week were briefed by the audit office.”
“Together we are working through the issues openly, robustly and with a deliberate plan. I see the Strategic Improvement Plan as the clear view or map for the community as to what work needs to be done straight away and is underway behind the scenes.”
Cr Reilly said: “By taking a proactive approach, Kiama municipality can shape its own future rather than the NSW Office of Local Government issuing performance orders to Council. We completely respect the State’s role in monitoring performance of Local Governments and understand why this would occur, but would prefer to be strategic and on the foot front rather than reactive.”
As well as immediate actions, such as the sale of Akuna Street landholdings, the Plan identifies longer-term activities to transform the organisation over the next three years, improving the administrative and cultural performance of the organisation in all spheres of work.
Key areas to be considered include the future ownership of Council’s aged care business, Blue Haven Illawarra, potential joint ventures for Council’s Holiday Parks, the potential sale of some Council-owned properties and parcels of land, and the introduction of a temporary Additional Special Rate Variation to raise revenue.
“These are significant decisions and they are essential to enable Council to continue to deliver the many local government services required and expected by our community,” Mayor Reilly said.
“As a high growth area, Council over the past four decades has had to provide and maintain increasing levels of infrastructure. As well as addressing our current challenges, we must ensure we can deliver assets and facilities to an acceptable level for future generations.”
“Our Councillors have worked together to develop the Strategic Improvement Plan to restore community confidence and trust in Council’s systems and processes while ensuring Council is positioned to be sustainable for the long term.”
“Through this Plan, we want to ensure that the organisation improves, continues well into the future and builds on the strong foundations of the past, while correcting existing challenges,” he said.
