Thursday, February 29, 2024

Cash-strapped Kiama Council workshops cashflow solutions

Councillors of the cash-strapped Kiama Municipal Council on the NSW south coast have attended a financial workshop this week to look at cashflow solutions.

The move follows the public tabling of a letter from the Auditor General of NSW to the Minister for Local Government confirming significant issues with Council’s 2020-21 Financial Statements.

The letter outlined concern about Council’s inability to repay its debts, noting that this poses “a significant risk to Council”. It also noted issues with the adequacy of Council’s books and records and the use of externally restricted funds.

“The Councillors and I are being transparent in releasing this letter so our community can see exactly what it says,” said Kiama Mayor, Neil Reilly.

“Although the letter does not convey good news, it is not new information and it does verify what myself, the Councillors and our CEO have been saying publicly in regard to Council’s financial situation for the past nine months now.”

The Auditor’s letter confirmed a key source of Council’s current liquidity issues was the construction of the Blue Haven Bonaira aged care facility, a project that was originally budgeted at $74 million, with a final cost estimated at $107.2 million.

Blue Haven Bonaira aged care facility.

Mayor Reilly said the sole subject of this week’s financial workshop was cashflow projections for the next two years.

The workshop was presented by Kiama Council’s expert consultants KPMG.

“The purpose was to help us better understand where we are, and how we can move forward,” the Mayor said.

“Giving Councillors this extra knowledge and the opportunity to digest the information will assist them to make the decisions necessary to ensure we continue to work towards long-term financial sustainability.”

“As I’ve said before, it is vitally important that Councillors work together as a team, to make business-critical decisions,” the Mayor said.   

Councillors have requested a second workshop, to be held in the coming week, to further consider improving cashflow. 

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