Dean Frost will step down as acting chief executive officer and a replacement will be installed, following a contentious vote on Monday night.
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Former director Murray Wood will step into his shoes, taking up the role as interim general manager for 12 months.
However, not all councillors have supported the decision.
Mayor Ben Shields was in fierce opposition to the move - which was discussed during the closed council session. Councillors Greg Mohr, Dayne Gumley and David Grant were also opposed to the decision.
Mr Frost was promoted to the interim role after Michael McMahon retired in April. The decision was made by Cr Shields and deputy mayor Stephen Lawrence after a recruitment process was undertaken.
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Councillor Jane Diffey was among those who supported the decision for Mr Wood to be hired.
"Given the current situation at council it's important to have some stability," Cr Diffey told the Daily Liberal.
"It's not that Mr Frost wasn't providing that but to know that you've got someone in that position for 12 months, and someone who is familiar with the organisation I think is reassuring, and familiar with the community too."
Mr Wood left council in September 2018 to take up a role with the Department of Premier and Cabinet. Before leaving he was director of parks and landcare for a number of years.
Cr Shields ended the meeting by stating he would be moving a recession motion. If he does, it would take the decision to have a new CEO back to another council meeting, and if more support was drummed up for the vote, Monday's actions would be undone.
"I think this is a pretty poor effort... To change midway through just before a council election and appoint someone just before an election I don't think is very fair on the incoming council. Full stop," Cr Shields said.
"I am certainly totally and utterly opposed to this."
Councillor Greg Mohr also raised concerns about appointing a new boss before a new council was elected.
During the meeting, Cr Shields echoed earlier calls he had made for the council to be dismissed by the NSW government, saying the councillors should "fall on their swords".
But Cr Diffey has dismissed the idea.
"The mayor used the justification that the council is split six-four. Well it's pretty much always been split six-four, now it's just not in his favour, so it's an 'unworkable council'" she said.
As it currently stands, Local Government NSW Management Solutions will undertake the recruitment of a new general manager after Mr Wood's 12 month appointment.
Mr Frost will be given two weeks notice to return to his director's role.
Cr Diffey said she hoped that Mr Frost would stay at council.
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