Can KI Council right a sinking ship?

By DANIEL CLARKE

07/05/26

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Kangaroo Island Council was within six weeks of administration and now needs to save at least $4 million over the next four years to stay afloat, its CEO has told Island Independent.

 

In a wide-ranging interview about the Council’s finances, Chief Executive Officer Daryl Buckingham said island ratepayers must prepare for “a few years of pain” as he attempts to rein in debt that has been labelled unsustainable by the Essential Services Commission of South Australia (ESCOSA). 

 

He warned services would need to be cut and new projects put on hold as he and elected councillors attempt to limit this year’s rate increase to six per cent. 

 

In a scathing report released in February, ESCOSA said KI Council’s historic, current and forecast financial performance was unsustainable. 

 

The Commission said Council’s draft Long-Term Financial Plan showed cumulative operating deficits of $45 million over 10 years, “which would significantly exacerbate sustainability risks”.

 

“Of immediate concern, the Council may have an impaired ability to fully service its debt, renew its assets, or fund routine and emergency expenditures, in the absence of securing further external funding, raising rates and/or reducing services to the community,” the report stated. 

 

Buckingham – who took over the job from former CEO Greg Georgopoulos in 2023 - claimed he self-reported KI’s dire financial situation to ESCOSA in 2024 once he’d grasped the enormity of the problem. 

 

“I did self-report and I told ESCOSA and the Minister at the time (Joe Szakacs) that 'you guys are complicit in this because your overwatch, your oversight is very very low compared to other jurisdictions',” Buckingham said.

 

“The Minister wasn’t very happy with me and he threw out there that he could merge us and I said ‘who with?’ They tried that in New South Wales and it was a disaster because they merged broken councils with really healthy councils and now they’re both broken. We’re not alone in our position – every regional council in Australia is facing similar problems.”

 

The former CEO of Tenterfield Council in NSW laid the blame for KI Council’s perilous situation squarely at the feet of the previous administration. 

 

“We had red flags everywhere,” Buckingham said. “The people running the show didn't have the understanding of how budgeting works for local government.

 

"It was amateur hour… and it was just like the ship of fools,” he said. “I don’t like saying it but it was just poor fiscal management and reporting, and not having the right systems and processes in place.

 

“We had a long-term financial plan when I got here that hadn’t been refreshed for four years. Their plan was to continue borrowing every year for 10 years and at the end of it we’d have a $50 million debt. I'm going to use a military term for the picture I’m painting here; it was a Cluster Foxtrot.

 

“I sound like the voice of doom but that’s the reality. It’s not easy. Those debts will be called in if I don't get them down in the next four years. It’s really hard because...we have to do less. We can't afford new and shiny things.”

 

Service cuts would be carried out strategically, Buckingham said, with recent higher fuel costs already blowing a $200,000-plus hole in Council’s budget, as revealed by Island Independent last month. 

 

“We already know that our waste collection is about to go up five per cent because they can't eat the fuel costs so I've got to pass that on,” he said.

 

“In terms of road maintenance, we've got to become more efficient. It may be that some of the lesser used roads have a lesser service - maybe a grade less. Depending how bad it gets we might look at a destination and go, okay, there's three roads going to that location. We're not going to worry about that one road for the next year or two because that doesn't stop people from getting there.”

 

Buckingham said he had no idea about KI Council’s financial position until he’d stepped into the role, “so yes it did bother me”. 

 

“All the reports were - I won't use the word fraudulent - but they were certainly inaccurate and did not give the correct picture. I didn’t realise how bad it was,” he said. 

 

“We got to the point where we had no cash to pay wages and I had to shuffle things around but because I smelled a problem really early when I got here I’d already started a strategy to put some money back in the bank.

 

“We only just made it. It was that close.”

 

He said Council staff never missed a pay cheque but that he delayed payment to contractors as long as legally possible while the organisation recovered cash flow. 

 

“I think we are 10 positions down (Council staff) on when I came in and I’ve still got a moratorium on replacements.

 

“I can actually put my hand on my heart and tell you now I'm running lean so we are at a point we can't cut any more staff. I just lost one of my team and I'm not replacing her and will pick up the work myself.

 

“What it means is you've got to change the culture of your workforce to become agile which local governments are not good at. We've had a lot of cultural change in the last couple of years, and I believe we are agile now. But the bottom line is that we're doing probably the same amount of work with less and we have to work out ways of making that sustainable.”

 

Buckingham said he understood the disappointment felt by the Penneshaw Progress Association after a $2.17 million major upgrade of Penneshaw’s foreshore was scuttled last year due to the belt-tightening in Council’s finance department.   

 

Council was forced to hand back a $1.375 million grant from the Federal Government after it said it could not make good on its co-contribution of $765,000 that was vital to completing the work along Hog Bay Beach and Frenchmans Terrace. 

 

“If you can't afford the co-contribution out of your reserve, then unless it's a really, really critical piece of infrastructure, you just don't do it. It's disappointing for everybody but that's why it's so important to manage your finances correctly,” he said.

 

As part of that grant, a $150,000 pre-fabricated toilet block was bought by Council for Lloyd Collins Reserve that is now sitting dormant in an Adelaide warehouse.  

 

“They (previous staff) bought a toilet before they even had the grant, which means you can't claim the cost of the toilet on the grant,” Buckingham said.

 

“This is just amateur hour - everyone knows this. They bought it but they needed the money for it because they didn’t have the grant so I had to take it out of operations. And it's sitting there in a warehouse at the moment - it's safe but to bring it over and install it is another $150,000, which I don't have. We'll look at this year's budget because we've saved a chunk of money from our toilet cleansing program.”

 

He also dismissed rumours that he opposed a new tourist walking trail from Frenchman's Rock to Baudin Conservation Park that the Department of Environment and Water (DEW) has proposed to build for the community. 

 

“I support the concept and we actually wrote them a letter of support to secure the grant but there’s an old saying, ‘beware of Greek’s bearing gifts’.

 

“Organisations like DEW want to come and build these shiny things and give them to us. And I say, why? Well, because they don't want the asset, it’s a depreciated asset. You've got to maintain it; you've got to take responsibility for it.

 

“If it’s a tourism project, the State government or Tourism SA are best placed to own it. Why would we put that burden on the little ratepayer base of Kangaroo Island when the real benefit is going to be the tourism industry?

 

“I’m anti taking gifts like that because they kill us. Councils go broke very quickly when everyone gifts infrastructure to you. I'll be honest, I’m a financial rationalist and I really believe we should not be spending ratepayer’s money on stuff that ratepayers aren't really going to get benefit out of.

 

“To be clear, these aren’t my calls, they are my recommendations. These calls are made by Council members; the representatives. But I'll be honest, that's the sort of advice I give them. 

 

“The Council members are by expansion the community. That's what you elect them for, to make those calls and you're hoping they're making good calls."

 

Buckingham said he was pleased with the “political will” shown by current councillors but was wary of any change in ideology after Council elections in November. 

 

“The current members have really bought into it and they want me to repair it but we go to elections in six months time and I don't know what we're going to have so that could be a problem,” he said.

 

“I've got two and a half years left in my contract. When I leave here my ambition - and I'm pretty confident I'll do it - is that I'll hand it over to the next person as a nice little box and it will be fairly healthy and sustainable.

 

“It is fixable but I’ve got to make hard calls now. And when I say I’ve got to make them, the elected members have got to have the political will.”