Mr Persson indicated in a radio interview that a rate rise was one of a number of options being considered as he reviews council’s economic crisis in conjunction with Acting CEO Rik Hart.
The options, including the sale of some assets, a reduction in services and a $50m loan will be put to ratepayers in the coming weeks.
He admitted in the Triple M interview that he was not aware of “any council that has got to the point where they couldn’t
pay their wages.”
“I am heavily embedded in a learning phase,” Mr Persson said.
He said it was likely that his initial stay of three months would need to be extended by another three months as he attempted to sort out the massive debt crisis at Council.
“If people hoped to hear from me that the situation is not as bad as we first thought, that is not the case.”
“It’s a very serious financial problem facing the Council, but I won’t be cleaning it up in 30 days. What I said was I would have a plain English report to the community in 30 days and that will have some options and considerations about the way forward and the measures we might have to take, plus the timespan about where we are and where we need to get to.”
It is doable
Mr Persson the good news was that “it is doable”.
“What has happened is money has been spent on capital works projects for the community that they didn’t have. They use internal reserves that they thought they could use those and that is one of the things I am trying to get to the bottom of,” he said.
“If they hadn’t used those reserves they probably would have had to have borrowed a very large amount of money and whether they would have done that, knowing it was borrowings, I’m not sure.”
He said there would be a basket of options he will put out to the community.
“Things like selling some assets, cutting costs, delivering services, some borrowings and possibly some rate increases. I want to hear from the community what they prefer.
He said it was very likely that some projects the community was expecting would have to be taken off the table.
In citing the council crisis as the worst he had seen, Mr Persson said every business should be monitoring their cash and should know where they heading to on a day to day basis: “I don’t understand how they got to that position.”
So has the Council too large a staff as has been suggested by local business leaders.?
Mr Persson said when the councils merged there was a protection in place which protected staff from the former Gosford and Wyong councils for three years.
“I have heard up to 300 plus new people have been put on since the merger and that’s one of the things I am currently waiting on information on.”
However, he was adamant that the debt was not a result of the merger.
“Not at all- the debt is from a capital works program they thought they had the money for but they didn’t. They could have borrowed it, but they didn’t and now we are going to have to have borrowings to put money back into those funds they shouldn’t have touched.”
