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COUNCIL assets dispersal: ‘not a fire sale’

 

Clarence Valley’s councillors have instructed the general manager to identify “a minimum $5million of assets to be considered for sale as a first wave of asset dispersal”.
The decision was made at an extraordinary council meeting on Tuesday October 27, following a request by councillors Andrew Baker, Karen Toms and Jim Simmons.
Under the local government act, the meeting had to be held within 14 days of the request, which was made on October 22 – the act only requires two councillors to sign the request.
Councillor Baker led the initiative, which, he wrote in the business paper, aimed to “formulate a … Fit for the Future response” following Premier Mike Baird’s call on October 20, for “councils to respond within 30 days” to a press release titled: Fit for the Future: $2billion community windfall by merging unfit councils.
Councillor Baker tabled a detailed motion that sought to abandon the proposed special rate variation (SRV) and to request the Minister to “favourably consider referring this replacement submission to IPART, with a view to having IPART consider reclassification of Clarence Valley Council to a status of Fit for the Future”.
However, Cr Baker’s motion failed to gain majority support, and was instead replaced with the foreshadowed motion proposed by the mayor, Richie Williamson: to have the general manager “provide a report to the November 2015 meeting of Council identifying a minimum $5million of assets to be considered for sale as a first wave of asset dispersal”.
Each of the councillors debated Cr Baker’s motion; Cr Sue Hughes was absent.

Councillor Baker’s motion called for a series of reports to be tabled at the February, March and April council meetings, or sooner if possible.
Those reports would have addressed proposals to: reduce general fund operating expenses by at least five per cent through cost reductions to office, administration and corporate operations, including the transfer [to private providers] or elimination of the council’s tourism, economic and business development/promotion services, along with the elimination or reduction of other non-essential services and programs; and, realise at least $40 million by the sale of unused and not required assets, and then leasing back the assets sold that are required for continuing operations.
Councillor Baker proposed that half of the proceeds would be used to reduce the general fund debt.
The other half would be used for renewal of existing infrastructure.
Councillor Baker argued that the council needed to do something “decisive” because “we’ve already been told” that the council won’t meet the benchmark dates that councils are expected to comply with to be fit for the future, even “if we get approval for the SRV”.
He said that the mayor’s foreshadowed motion was “not any better than what we’ve done already”.
Councillor Craig Howe was sceptical of the $40miliion sell-off proposal and called for a “considered response”.
“We could sell $40million in assets and still leave the next council with the same problem,” he said.
“The general manager has a meeting with the Department of Premier and Cabinet in the next few days; we need to wait until that has happened.”
He wondered “how many people would want us to sell assets then lease them back”.
Councillor Jim Simmons said “Cr Baker should be congratulated” for his proposal.
He said that ratepayers couldn’t continue paying increased water and sewer charges and that they cannot afford to pay the proposed eight per cent SRV.
He said that if an administrator was appointed to run the council, “the first thing done would [be the appointment] of an independent auditor of council’s business”.
Councillor Arthur Lysaught said he agreed “with a lot of what Cr Baker says, but I’m not prepared to support [him] today”.
He said he would prefer to “wait for a report from our general manager and finance manager, who are well equipped to give us the information to make long-term decisions” about which assets to sell, and “maybe come back with options not quite as savage as the motion before us tonight”.
Councillor Karen Toms, who supported all of Cr Baker’s motion, was incensed about the general manager’s meeting with the Department of Premier and Cabinet.
“We weren’t told until today that the general manager has made an appointment to talk about what we might do,” she said. “If the council is running this organisation, why hasn’t the general manager asked us about what he is going to do?”
Councillor Jason Kingsley judged Cr Baker’s motion as “a knee jerk reaction” and said he wasn’t comfortable, either, with the proposed eight per cent SRV proposal.
Councillor Margaret McKenna said she hasn’t supported an eight per cent SRV “from day one” and was critical of information within Cr Baker’s motion, describing some of it as “flippant”.
She said it was “not reasonable” to expect council’s staff to prepare a new submission to IPART within the time available.
During debate of the mayor’s foreshadowed motion, Cr Toms called it a “knee jerk reaction” triggered by Cr Baker’s “more complicated motion”.
Mayor Williamson, however, pointed out that his motion to sell a minimum of $5million in assets was a “first wave”.
“I am proposing more, both in terms of dollar terms and in an ongoing process,” he said.
“I’d like to see these first waves underway almost immediately, however, this is not a fire sale.
“If council can responsibly move through an asset disposal program, act responsibly with regards to our obligations corporately, and also move through the SRV process, that is the way forward to be fit for the future.”
Councillor Baker’s motion was lost 5-3, with Crs Howe, Williamson, Kingsley, Lysaught and McKenna against.
The mayor’s motion was carried 6-2 – Cr Simmons voted for the motion, saying that “$5million is a start … but after 11 years of virtually doing nothing [since amalgamation], I’m not holding my breath”.

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