A NSW council faces suspension following a breakdown in the relationship between councillors and senior staff and questions about its ability to function.

Local government minister Shelley Hancock on Thursday issued Wingecarribee Shire Council with notice of intent to suspend, saying a previous improvement order, mediation and the appointment of a temporary adviser had failed to improve the situation.

The NSW Southern Highlands Council has been given seven days to explain why it shouldn’t be suspended or an administrator will be appointed for three months.

The union representing council staff said the minister’s announcement followed allegations of harassment and bullying of staff.

“The union has been made aware of allegations of harassment and bullying of staff, which are having a significant effect on the wellbeing of staff and the operations of the council,” USU organiser Rudi Oppitz said.

“As we understand, these allegations are a central consideration in the  minister’s intervention.”

Council is expected to hold an extraordinary meeting next week to determine its response.

Central Coast cuts deficit

Meanwhile, Central Coast Council, which was suspended last October following “catastrophic mismanagement”,  has released a quarterly budget report confirming it has managed to shrink its projected $115 million budget deficit by $7.7 million.

Administrator Dick Persson says Council is continuing to take action to reduce its deficit via spending cuts – including a $4.4 million reduction in operational expenditure – and sale of underperforming assets.

Central Coast has also generated an additional $3.3 million from fees and charges from its holiday parks, leisure centres, pools and child care centres.

Council has also applied to IPART for a 15 per cent rate rise,  Mr Persson said warning if the application is unsuccessful “it may impact the status of our bank loans with a potential early call on these loans”.

“Good news is all our hard work to find savings and rein in spending is working with the deficit reduced by $7.7million,” Mr Persson said in a statement.

However, bad news is that Council’s projected financial position by the end of the financial year remains “unsatisfactory”, he says, with a forecast loss of $107.4 million.