Local, Opinion/Comment

Coastal Works returns not enough to cover GM’s Office?

Coastal Works was created by the Coffs Harbour City Council (CHCC) around 2009 from an existing operation called City Works with the approval of the Office of Local Government (OLG). 

By Rob Steuermann

Before it became City Works that particular department of Council’s job was essentially to do the day to day maintenance and repair work that Councils need to do.

Coastal Works logo

However, the City Works name angered local tradespeople as it implied the Council was setting up to go into competition against locals. Coastal Works was deemed more suitable as a name. It was also stated by the CHCC that Coastal Works would only bid for work in other local government areas. 

Yet, if my memory serves me correctly, Coastal Works were heavily involved with the major road works at the “Bunnings intersection” and this is clearly within the Coffs Harbour local council boundary.

It also did the Coffs Harbour Airport upgrade.  Coastal Work’s web site clearly identifies it as “a business unit of Coffs Harbour City Council”.

In 2016 the Civil Contractors Federation in NSW called on the Office of Local government to investigate Coastal Works.

From its inception the need for Coastal Works was under constant question. 

Former Cr Nan Cowling incurred a Code of Conduct violation.  Her crime?  It appears it stemmed from asking to see the accounts of Coastal Works. Something that was in the minds of many residents way over the top as a punishment for such a ‘crime’.

It was also an issue raised by former Councillor Mark Sultana in a Council meeting in early April 2016 too.

Former Cr Mark Sultana, Coffs City Council. 26 Februray 2016. Photo: Trevor Veale / The Coffs Coast Advocate

When Coastal Works was made operational it was  put under the control of a Board that was not elected by the residents it served and whose assets it uses.  Two members of the board were the Mayor and the General Manager. 

Interestingly information about the board no longer seems to appear on Coastal Works web site.

The Board carried on treating all they did as “confidential”.  It was ‘top secret’ if you like. 

It appears that contracts were involved and the Board did not wish local trades people to see if they may have be undercutting them. Or so it would seem.

Nevertheless, at long last some figures are available about how Coastal Works is functioning financially. Under law there is a requirement for Council to keep proper accounts and they have to be audited and published. 

In the year ending 30 June 2018 the Council complied with the law.  Three volumes of papers were duly published of which the third volume contains the account detail. 

At close to 100 pages it is anything but light bedside reading.  But a closer examination reveals the long held mystery of the real value of Coastal Works.

An extract from the report is in the photo below.  Page 13 is the footnote to the financial statements with a sub heading of Note 2(a) Council functions and Activities. 

Listed under the functions is Coastal Works and against this heading are the income and expenses for 2018 and the previous year 2017. The following table is reproduced for convenience only.

FunctionIncome
‘000
 Expenses   Result  
  2018 2017 2018 2017 2018 2017
Coastal Works 3,5803,3353,056 2,604 524 731

This means, for all the effort and for all the secrecy, Coastal Works made a net profit of $524,000 in the 2018 year which is $207,000 less than it did in the 2017 year.

Which rather leads to the question “Has it been worth all the secrecy and organisational change costs?”

A photo of Page 13 of the CHCC accouints to 30 June 2018

Part of the answer to that may lie in the same set of accounts in the photo above.  Higher up on the same page are the figures for the “Office of the General Manager”. 

It should come as no surprise that there is no income derived from this function.  The expenses (and the net result) show a LOSS of $560,000 in 2018.  In other words the loss is greater than the net income from Coastal Works. 

So, is this the real worth of Coastal Works? It rather makes a person wonder if it was it all worth it!

Could the resources have been better deployed for the benefit of the community without going to all the trouble of running this “top secret” unit?   

And would not diverting Coastal Works to what citizens probably think are priorities such as repairing roads and constructing footpaths and gutters in our local government area possibly achieve a more desirable outcome?

The Coffs Harbour City Council has this to say about Coastal Works on its web site updated on 22 July of this year;

“The purpose of Coffs Harbour City Council’s Coastal Works construction unit is to generate profits and earnings for the benefit of the local community by winning building projects.

Council is one of only two local operators that can tender for projects with the NSW Government’s Roads and Maritime Services (RMS), as it has the necessary pre-qualification.

Coastal Works only bids for projects outside of the local government area so that it does not directly compete against contractors from Coffs Harbour. It is also able – and does – employ local sub-contractors to carry out works on projects.

In this way, the community benefits twice – the annual net profit generated by Coastal Works is put into the city’s funds to be used for works like roads, footpaths and kerb and guttering – plus local sub-contractors are also employed.

The money then earned by the sub-contractors also goes into the local economy, which provides further benefit to other businesses and the wider community.

The average profit made by Coastal Works is around $600,000 a year – and all of that extra income goes into Council’s General Fund for infrastructure maintenance and renewal.”

(Our emphasis added).


Rob Steuermann is a retired forensic auditor for the Federal and State Governments.

7 Comments

  1. Well that’s amazing isn,t it? what else does this council do behind our backs,,As board members would knight and G M be paid?? unbelievable..they need major investigations as surely theres enough proof calling for it

  2. If the standard of work they applied to resurfacing our street in Toormina is any indication, their skill base seems pretty low. Within a month of completing the job, potholes were appearing.

  3. Coastal works is a disaster!!

    Look at their work starting with Harbour Drive outside Gowings… coast $ god k owns how much. Fell to bits and recently relaid at a cost of $ who knows and who knows who paid for the new/ repaid works. I hope it was out of coastal works budget.

    Jetty pathways opposite school. Took over a month to construct. A private operator would have completed the job in a week at best.

    Wind up coastal works. Pay the staff out and subcontract all council works to private local operators who can rehire the council staff who are up to working for a privately operated outfit.

  4. Well if this forensic report does say it all!!Imagine if this cultural centre goes ahead,this should give a good insight into the fiscal mismanagement of the council.Great article Rob Steuermann ,well researched ,you should be commended

  5. A matter for the auditor general. Janne C Lindrum

    • Is it Rob Steuermann who Councillor Sally Townley wants, as an independent, to investigate and oversee the financial management of the Gordon Street edifice ?

  6. NSW Government should endorse the following Policy:
    Construct Limits on Local Councils – NSW Government should prevent Local Councils using taxpayer funds to develop civil contracting businesses

    The NSW Government must ensure every dollar given to Local Councils for infrastructure work is used to build and maintain infrastructure in the LGA. Local councils cannot be permitted to use State Government funds for profit or to build businesses that compete with NSW civil construction companies. State Government Funds should not be used for new websites, new uniforms, new branding, glossy marketing and set up costs for new business units that will compete with NSW businesses across NSW.

    It should be recommended that the NSW Government should audit all Local Council’s activities in this area, including the governance of such entities, and it should start with Coffs Harbour City Council

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