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10 SEPT 2022
Brown shares details from financial briefing Fellow councillors were surprised when Councillor Matt Brown spoke publicly about what was discussed in the first financial workshop held to assist their understanding of Council’s financial situation. “I am disturbed that the situation is worse than we thought and believe the public have a right to know,” he says. “All councillors looked shocked. We didn’t know we were using general ratepayers’ funds to pay the electricity for Blue Haven, we didn’t know that Blue Haven didn’t contribute to rates, and we found out that we are not a going concern as a Council. They were the exact words. “I think the community has a right to know what the councillors took away from it.” The sole subject of the workshop was cashflow projections for the next two years. Cllr Brown says the meeting wasn’t confidential, and the information the presentation by KPMG was based on is publicly available. Mayor Neil Reilly says he is surprised that Cllr Brown has shared what he learnt. “The gist of it is on the public record, particularly with the letter from the Auditor General outlining some of the problems and perceived problems facing council. “The absolute detail was for internal discussion, just as with other technical briefings, and I don’t see there is any value in making what we
were told public. “It was a very valuable meeting, and having absorbed that information we will go to the next meeting being able to explore different scenarios.” Cllr Brown says he is motivated by his love for the place where he grew up and the need to make the right decisions. “The CEO has been telling us about this situation for the past nine months, and a number of councillors have refused to listen her, instead questioning and challenging her. “What she has been saying was verified and supported by professionals last night. We should have listened to her six months ago, because every day we continue not making decisions to move forward is another day closer to administration.” The second briefing is being held when this edition is at the printer, with the status of its confidentiality expected to be made clear. One measure that was brought home to councillors (that was reported in the Finance Advisory Committee’s August Minutes but overlooked by some including this paper) is that in July Blue Haven Residential Aged Care Facility was losing $119 per bed per day, compared to the average bottom 25% of the industry benchmark survey showing a loss of $24 per
bed per day (the 2023 budget projects it to reduce to a loss of $75 per bed per day). “With 134 beds, that is a loss of nearly $100k per week,” says Cllr Brown. “That is a staggering loss for ratepayers. “The community has a right to know their community leaders are not qualified in running an aged care facility. “They have a right to know their rates are subsidising Blue Haven. The community has a right to know council is in a precarious position. If we get it wrong we will go into administration and get The newly elected Council, after its first meeting earlier in the year amalgamated.”
Akuna St in limbo The long drawn out sale of Akuna Street continues, with exchange now not expected until after 14 October. Having resolved the legal issues raised after the tender winner was announced on 28 June, Kiama Council has announced that it signed the contract to sell the property to the Level 33 Property Group last week. However Council says Level 33 Property Group has advised they will be exchanging contracts after 14 October, with settlement of the sale 42 days from the date of signing as they stipulated in the tender.
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Council is relying on the sale as a key element in easing its cashflow problems, and the short 42 day settlement was mentioned as one of the attractions when the sale was announced. “With financial transactions of this magnitude it’s always best to be thorough, and it takes time to do that. It’s time well spent,” says Mayor Neil Reilly. Details of the sale, including the sale price, will not be released until settlement but it is anticipated the sale price will be above $20 million. We have approached Level 33 for comment.
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