A recent controversial State Government push to take control of local government developer contributions has lead to a push back from the NSW Local Government Association,(NSWLGA) representing Councils across New South Wales, and has lead to a renewed media focus on developer contributions themselves.
By The Editor
Locally this has lead to resistance to the State Government proposal from the Coffs Harbour City Council (CHCC) and also a statement in response by local State MP Gurmesh Singh that Council’s will still be able to access their developer contributions.
Those stories were covered by CCO here; https://coffscoastoutlook.com.au/mayor-says-plan-to-take-developer-contributions-from-councils-will-lead-to-rate-rises/ and also here too; https://coffscoastoutlook.com.au/developer-contributions-gurmesh-singh-has-his-say/
What are developer contributions?
The NSWLGA has defined developer contributions as helping “fund vital infrastructure to support population growth in communities, including footpaths, cycleways, parks and open space to help cope with the increased demand new development brings.”
Correspondents to CCO have also been debating this issue and some have asked for proof of ‘the many millions’ of unspent developer contributions.
Today we present evidence to the effect that the CHCC, as per the accounts presented in tonight’s Council agenda, has accumulated unspent developer contributions of almost $21m.
Council’s bank balances
Tonight’s council meeting agenda states; “The bank balances and investment total of $252,909,524.75 as at 31 August 2021 is allocated between Council’s external restrictions, internal restrictions and unrestricted funds.
The balance of Council’s cash, cash equivalents and investments as at 30 June 2021 was attributable to external restrictions, internal restrictions and unrestricted funds as follows:
Now there are a number of issues that are immediately of interest here but today we want to focus on the External Restrictions figure of $139,150,000.
This figure is where any unspent developer contributions can be found because they are ‘ringfenced ‘external contributions. This means they can only be spent on things such as footpaths, cycleways, parks, and infrastructure needed with the increased demand new development brings. In other words monies aid by developers to Council for these purposes
Attachments to the 26 August Council meeting one month ago showed a breakdown of the External Restrictions entry in the accounts. The entry pertaining to these is reproduced as a screenshot below;
We know these figures are correct, in spite of the Draft diagonal stamp above, as they align exactly with the figures in tonight’s Council agenda
Questions for Council
Now there might be some very good reasons for this and we are sure Councillors, and probably State Government and also more than a few developers would like to know what they are.
No doubt Council’s executive Management, being as open and transparent as they always are, will oblige.
However, in addition to; “Why is it that almost $21m is unspent?” Questions such as; “How long have some of these contributions been unspent?”, “What plans are in place to acquit these contributions?” and “Is keeping these monies tied up in the bank at a time of historically low interest rate returns such a great strategy?” also spring to mind.
In regard to the last question above we note that tonight’s financials show that the CHCC has $43,036,947.00, or 17.02% of it’s investment portfolio, in BBB+ to BBB- securities.
These are supposedly the ones it has been argued that the NSW Treasury based TCorp had concerns about in regards to a possible CCS loan to Council . See Pg 16 of tonight’s agenda at the link below.
Issues such as unspent grant monies and the amount of available ready cash also arise from the finances as presented to Council tonight.
We will address those, and other issues too, tomorrow.
Tonight’s CHCC agenda can be found at; https://infocouncil.coffsharbour.nsw.gov.au/Open/2021/09/CO_20210923_AGN_2257_AT_WEB.htm
Lead photo: Adobe Stock