A rate hike, a change to the fees and charges at council facilities and a review of the services the council provides have been flagged as some of the possible solutions.

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The dire state of the council's finances, staffing arrangements, culture and policies has been laid bare in a damning report from the CEO Jane Stroud, who began her tenure in mid 2021.

The report, included in the business papers for next week's meeting, is scathing about how the council has been run over "decades".

Ms Stroud said she had not been brought in to "fix things", but had simply "discovered some things that need to be brought to the council's, state government and community's attention" in the process of running the council and Blue Haven.

"Across the board there has been a lack of planning, governance, resourcing and quality systems and procedures to help inform quality council decisions," her report says.

"The businesses in their current operating states, without immediate and sustained correction are not sustainable."

Ms Stroud's report states that the "challenges facing the business have been known to some degree for several years" with some staff speaking up and reporting issues which "did not always eventuate in actions".

However, it also states that "no blame is attributed to any previous officers or elected representatives".

"Seeking to blame is not considered useful in correcting the situation or propelling the organisation towards a more sustainable business model," the report says.

Ms Stroud has listed a litany of management failings, noting that many of the council's polices and procedures "either do not exist, have extensive gaps or have not been updated for many years".

Likewise, many industrial agreements are outdated and due to expire this year, and this, along with a lack of comprehensive human resources policies and procedures have affected the culture and morale at the council, which is the area's largest employer.

The council is projecting an operational deficit of $2.7 million in the 2021/22 financial year, with recent unplanned expenditure to add to this deficit.

"Lack of sound financial policy, long-term financial planning, software cutover issues and staff turnover, or understaffing in this area have critically affected our financial performance and reporting," the report says.

There are also a number of capital projects which need to be funded, and there has been no asset management planning for the council's administration centre, depots or holiday parks. In particular, the holiday parks have compliance issues, and need "comprehensive corrective programs" which will require funding.

Meantime, the Blue Haven aged care business - which has deep financial problems of its own, as well as compliance issues that could risk accreditation and lead to costly sanctions - has added complexity to the council's woes.

Its finances are "completely merged with the council's general ledger", according to the report and the investment in the Blue Haven Bonaira project, completed in 2019, blew out from an initial $56 million to $106 million.

"Documentation of how project costs increased are not fully reported or easy to obtain from the public record," the report says, also noting that there were "significant contract variations approved with insufficient delegations".

The report makes mention of "building defects" and problems with the way the project was planned.

For instance, it says changes to independent living units above the residential aged care facility "were not properly planned and are causing significant resident concern regarding noise, shared spaces and lack of policies to enable harmonious living."

There are also critical staff shortages, with 26 vacancies for the 34 care service staff, which is creating excessive staff costs due to overtime, agency usage, temporary staffing and use of casuals.

Ms Stroud and the council's new mayor Neil Reilly said there was no quick fix for the fundamental challenges facing the organisation, but assured residents that there would be extensive consultation in the coming months.

"What we've done has been very open, we have told the community to the best of our ability what the status of our organisation is," Cr Reilly said.

"What we aim to do now is to investigate those challenges that we have ahead and address them."

Exploring a special rate variation, an "essential service and service levels review" and a "review of fees and charges" are some of the measures included in the "short term actions/options" of the report.

However, Cr Reilly said these particular measures would not necessarily go ahead.

"We might take many actions, some of which will have an impact on individuals and some which will impact the organisation as a whole, but we're not closing our ideas or looking through a blinkered view - we are open to solutions," he said.

He said it would make no difference to apportion blame to anyone for the council's current state of affairs, and preferred to see the report as an opportunity to move forward.

"I am happy to have a report that is honest, open and really holds no deep dark secrets, it's just telling it the way it is," he said.

"We've not looking for blame, we're looking for solutions, what's happened has happened and I want to find out some of the root causes, but with regard to blame there's no value to that. Do you think having someone to blame is going to lessen the burden [on the community or council]?"

"Now we have a great leadership team headed by Jane, and probably the most qualified council I've come across in my 13 years of being in local government, so now is the best time to look at these problems openly and honestly."

The council will host workshops in the coming weeks to help inform its new Community Strategic Plan, which will work towards fixing some of the failings outlined in Ms Stroud's report.

Numbers are limited due to COVID restrictions, so bookings will be essential.

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