Kiama council have just three years to get their budget into surplus - and they can't rely on selling assets to do it.
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The demand is part of a revised performance improvement order (POI) issued by Local Government Minister Ron Hoenig on Thursday.
In February Mr Hoenig told the council he was planning to revise the POI originally issued by previous Local Government Minister Wendy Tuckerman in 2022 because he felt the council was "moving quickly enough" to fix their financial problems.
The new PIO requires the council to "regularly and continuously review [its] financial situation with a view to becoming financially sustainable by 2026-27".
It also demands stronger financial action, rather than relying on the short-term solution of selling council-owned property, saying it has to update the Finance and Governance Improvement Plan "to set out the actions council will take over the next two budgets (FY 24/25 and FY 25/26) to break the practice of adopting deficit operating budgets without relying on property sales".
Another one of those sales could happen on Monday, where councillors will decide whether to accept an offer to buy the Blue Haven Bonaira aged care facility.
The PIO recognised there were "significant cost overrun" in the creation of Bonaira and it is now running at a loss.
If offer to buy is accepted, it will see the independent living units - known as Blue Haven Terralong - remain in the council's hands.
In that case, the PIO calls for a tighter rein on finances to see "whether general rate revenue is subsidising its operation".
The council will also be required to establish a restricted reserve of funds to allow for the upgrading of the facility.
"Given the difficult financial circumstances facing the council, it is important that council remains on track with the financial strategies that have been put in place to reduce expenditure and increase revenue," the PIO stated.
"The community needs to have confidence that council's financial management and performance has independent oversight and is being closely monitored.
"While council has recognised these challenges and has taken some steps towards addressing them, in my opinion the PIO should remain in place with a number of variations to the actions required to improve performance.
"Further, in my opinion, council should provide bi-monthly reports to the Office of Local Government on the progress and effectiveness of actions taken to achieve financial sustainability for the duration of the period that this PIO remains in place."
Glen Humphries
I'm an award-winning senior journalist with the Illawarra Mercury and have well over two decades' worth of experience in newspapers. I cover the three local councils in the Illawarra for the Mercury, state and federal politics, as well as writing for the TV guide. If I'm not writing, I'm reading.
I'm an award-winning senior journalist with the Illawarra Mercury and have well over two decades' worth of experience in newspapers. I cover the three local councils in the Illawarra for the Mercury, state and federal politics, as well as writing for the TV guide. If I'm not writing, I'm reading.
