Pittwater Life December 2020 Issue

News
Money woes wrong: Mayor
Northern Beaches Council has strongly rejected findings “Northern Beaches Council is outperforming with over $29
from an independent consultant that poor financial management
million per annum in savings, increased service levels and paying
has resulted in accumulated losses of more than $103
million since Manly, Warringah and Pittwater Councils were
merged to form the combined entity in 2016.
Mayor Michael Regan claimed the LSI Consulting analysis
used “flawed” methodology and that NBC was generating
average savings of $29 million a year - despite public records
showing it is more expensive to run than the councils which
preceded it.
In the 2014/2015 financial year – the most recent full year
available – the combined expenses of Manly, Warringah and
Pittwater Councils was approximately $296 million.
The following financial year, reduced to 10.5 months due to
the merger in mid-May 2016, combined expenses
were $269.5 million.
Since then NBC’s total annual operating
expenses have been $355 million for the
13.5-month 2016/17 financial year, $312m in
the 2017/18 financial year, $331 million for the
2018/19 financial year and $347 million for the
2019/20 financial year.
On this basis (excluding the longer 2016/17
financial year), NBC annual operating expenses
have been $16 million to $51 million more than
the combined total of the three councils it replaced,
undermining the argument that council
mergers would result in greater efficiencies and
cost savings.
Despite the increased costs, NBC claims its
off significant debts of the former Councils,” said Cr Regan.
An NBC spokesman admitted this was not obvious from the
annual reports. “Operating efficiencies are not always easy to
see within the financial statements as the Council reinvests
these savings in service uplifts for the community,” he said.
“There are a number of external factors which have impacted
our expenditure (and would have also impacted the former
councils), including large increases in the Emergency Services
Levy (increased $1.9m (35%) over the last two years to $7.4m),
significant storms and COVID.”
He added: “Expenditure cannot be viewed in isolation of
income. Council operates a number of services and programs
that are fully or partially funded by fees, grants
and other income. As income has grown for these
services, so has expenditure.”
Meanwhile, Northern Beaches Council has
reduced the combined debt of the former councils
from $89.8 million to $27.5 million at 30 June 2020.
“The Council has not taken out any new loans
and continues to pay down these existing loans. We
forecast the loans balance will be $22.4 million by
the end of this financial year,” the spokesman said.
Cr Regan further said of the LSI Consulting report:
“We are taking the matter up with LSI, who
have unnecessarily caused reputational damage,
not just us but a number of Sydney councils, using
clearly unsound methodology.”
LSI Consulting did not reply to Pittwater Life’s
financial performance has been outstanding. HITTING BACK: Mayor Regan. approaches for comment. – Martin Kelly
24 DECEMBER 2020
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