City of Nedlands: City’s future in serious doubt as ‘catastrophic risks’ revealed to cost $27m

An explosive review of the City of Nedlands has cast doubt on its ability to continue functioning. The review, which was scheduled to be presented at a special meeting on Thursday night, details widespread financial and management failures, with the cost of fixing the problems estimated to exceed $27 million. It also contains acting chief executive officer Arthur Kyron’s observations of the many issues facing the city, including staff feeling unsafe to make mistakes and a high staff turnover. The commissioners running the city have been recommended to immediately provide the report to Local Government Minister Hannah Beazley, as well as the new Local Government Inspector Tony Brown and Department of Local Government director general Lanie Chopping, to assess the city’s “ongoing viability”. They have also been recommended to immediately close four playgrounds, due to safety issues that the council cannot afford to address. The review listed significant and historic issues that have plagued the city, including $24m worth of overdue and under-resourced infrastructure renewal works that now pose a direct risk to the city’s financial sustainability. It warned that without immediate intervention, the city’s compounding financial, operational and governance failures risk further deterioration, placing its long-term sustainability — and its ability to function as a local government — in serious doubt. “It has become apparent the city is at a crisis point with long-standing, systemic (issues) impacting the majority of the city’s operations,” it says. “This includes significant financial and operational issues, which affect the viability of the City of Nedlands as a going concern.” Other outstanding financial issues include costs to repair ICT issues, underground power, audit remediation and insurance risks. Absence of important up-to-date informing documents was also reported as “unprecedented in contemporary leadership practices”. “The dangerous impact is that the decisions taken are based on opinions, beliefs, expedient or populist grounds and nothing to do with responsible leadership,” the review said. It also found significant distress was being experienced by staff, there was a high staff turnover and low psychological safety. According to findings from a psychological safety inventory report, staff did not feel like they were listened to and felt unsafe to make mistakes. They reported that new ideas were not welcomed and information was not shared. About two-thirds of the city’s staff have turned-over from 2024-25, which has cost the council an $2.99m, with an additional $175,000 cost due to worker compensation claims. Claims that staff had been underpaid in 2020 were also revealed. The total number of affected employees is yet to be confirmed but the report estimated the total repayments cost will be at least $1.5m. The review was released on the same day as nominations open for a its full-spill council election next month. Minister for Local Government Hannah Beazley said the reports’ findings show the city is at a “crisis point” and warns candidates planning to nominate for council to be aware of these systemic issues. “The Commissioners have done an excellent job of steadying the ship, but it is clear there are many challenges ahead,” she said. “The serious financial and operational issues that have been revealed raise questions about the future viability of the City of Nedlands. “This situation is entirely of the City’s own making, and the incoming council will have to make some difficult decisions regarding their future. “It is important that everyone nominating in the upcoming election is aware of the significant problems plaguing the City. “Both the Local Government Inspector and I will review the situation and take necessary action.”