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Rationalising depot consolidation

Clarence Valley’s councillors have resolved to auction nine properties to help fund its proposed depot and office accommodation rationalisation.
The properties – five depots in the Grafton area, the office building at 42 Victoria Street, the regional library at South Grafton, office space at McNaughton Place in Maclean and vacant land at Mulgi Drive, South Grafton – were independently valued at $5.305million.
The proceeds had largely been earmarked to fund the proposed $17.5m depot at Tyson Street, South Grafton, as reported in last week’s Independent story, All roads lead to ‘super’ depot.
The rationalisation is one of the key strategies identified in the council’s Fit for the Future submission to the IPART (Independent Pricing & Regulatory Tribunal).
At the meeting, Cr Karen Toms and Cr Jim Simmons (seconder) proposed an amendment to the council officer’s recommendation to council, which flagged listing properties for sale “with all interested real estate agents” in Grafton and Maclean (where the properties are located), with a minimum reserve price matching the independent valuations.
“And [that] the general manager be delegated authority to sign all contracts associated with each sale,” the report states.
Councillors Toms’ and Simmons’ amendment added an additional point to the officer’s recommendation.
They called for proceeds from the sales to be applied “as follows: a) Depot and like properties into the Strategic Building Reserve for use in depot rationalisation, and b) Sale of offices and other properties not associated with depot rationalisation into a Fit for the Future infrastructure backlog reserve”.
Speaking to the motion, Cr Simmons said: “Forgetting about Fit for the Future, how is this council going to address [the infrastructure] backlog unless it makes a start somewhere?”
Cr Simmons didn’t think it was “appropriate for the full amount” to be allocated to the Strategic Building Reserve, which is for the depot rationalisation.
”Council needs to make a start towards putting money aside for that backlog,” he said.
“Council needs money to address the backlog, it needs to address where it’s going to get those funds from and it needs to address the discretionary services it provides.
“So that’s why I’m endeavouring to make a start Mr Mayor.”
The mayor, Richie Williamson, and Cr Margaret McKenna (seconder), however, gained the support of Crs Baker, Lysaught and Howe to “receive a report on the merits” of allocating the funds as proposed by Crs Toms and Simmons.
Councillor Andrew Baker and Cr Toms (seconder) added a third target for the funds.
Only the mayor opposed adding a third course of action, to consider directing some of the money “to debt reduction of the general fund”.
Councillors Baker and Toms (seconder) made a further amendment, supported by all councillors apart from Cr Margaret McKenna, to sell the properties at auction.
Councillor Baker told his fellow councillors that the council was more likely to realise higher prices by auctioning the properties; and that there is no cooling-off period when a property is sold at auction.
Councillor Baker also successfully gained support for authorising “the general manager [to] report to a council meeting or a delegated party of Council on auction day on any offers below the reserve price on the day”.
This, he said, would keep the sale process “moving more quickly” with a “concentrated effort by one agent”.
“This is only designed to get the best possible result for the council,” he said.
“It’s not necessarily designed to sell all the properties on auction day, but it does concentrate the sales effort through a single agent, who will be very motivated by the council paying [for] advertising.”
“… Importantly, any gap between a sale day and a report back to council is one more day that the buyer can get cold feet.
“… The whole idea is to ensure that if we have a buyer on the day … that we are prepared to sell to them even if it is a $1,000 or even $10,000 below the price.”
Cr McKenna had earlier failed to gain support to not auction the Grafton properties, however she voted with the rest of the councillors when the final vote was made.
The general manager will also “provide a report to the March 2016 council meeting identifying further property assets that can be considered for sale”.
Councillors Sue Hughes and Jason Kingsley were absent and lodged “unavoidable absence” apologies.

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