Yesterday we ran a story highlighting that Council’s accounts showed that they had accounted for almost $21m in unspent developer contributions.
By The Editor
That issue has become current because of a controversial State Government proposal to be put to Parliament to take stronger control over developer contributions made to local government authorities such as the Coffs Harbour City Council and others on the Coffs Coast.
The full story, including links to previous stories and a definition and explanation of what developer contributions are and what they are meant to be used for according the NSW Local Government Association, can be found here; https://coffscoastoutlook.com.au/council-has-almost-21m-in-unspent-developer-contributions-in-the-bank/
Could there be more than $21m in unspent developer contributions?
Yesterday we focused on Council’s figures. But as with all figures further analysis unveils new possibilities.
To show you what we mean lets go back to the August 26 figures presented to Councillors on that date which were reaffirmed in the accounts presented in the agenda for last night’s council meeting.
Lets again look at the External Restrictions figures. This is money council has ‘ring fenced’ for eventual expenditure on certain items.
External restrictions monies amounts to $139,150m, just over 55% of what council ‘has in the bank’.
Of that an amount totaling $11,600m is publicly allocated for water and sewerage as liabilities with a further $4,027m of developer contributions for water and sewerage.
So right there admitted developer contributions so far unspent now amount to $24,909m, almost $25m.
However something else that needs to be taken into account are the figures for the Transition to Sustainabily entries.
This fund comes from a restructuring exercise done by council some while ago. Eight or nine years ago potentially. Normally restructuring savings are a one-off entry. So it has always been a point of amusement at least, and contention at worst, among those who know finance that somehow this is a bookkeeping entry and one which also seems to carry on and change every year.
But leaving that aside in it Council allocates $2,687m for water and sewerage.
Where do the monies for that come from? There may well be a very straightforward answer. However sources have told CCO they believe some, perhaps even all, may have come from developer contributions.
If that is correct then the unspent developer contributions suddenly becomes $27,596m.
We do know that $10m from the T2S fund was allocated for Yarrila Place (formerly the CCS) and that seems to have been spent.
Lastly there is also an entry simply called ‘Sewer fund’ which has $29,041 attached to it. Again we are not sure whether that includes developer contributions too or if it comes in total directly from the sewer component in rates.
There are some who are arguing the real unspent developer figure is more like $47m. If that is correct then a further $20m needs to be allocated from somewhere. Could the answer lie in the Sewer Fund or have they been sent elsewhere over the years?
The T2S fund perhaps?
Our respected commentator, 40c, overnight posted the following on the comments section here – was he/she being very prescient?
“Has there ever been questions or disclosure as to what was spent on the idea prior to it becoming publicly tabled? Can’t recall a single one. It’s in that area that I wonder if developer contributions were kept aside for the preliminary costs, which begs the question as to how early the council offices idea actually originated, awaiting an opportune time. (Run the ‘cultural’ element first, get the public onboard with a bigger local project, knowing you’ll add the offices later? Piggy back the State Govt push for infrastructure?) When and who cooked this thing? So the above comment doesn’t refer to consultants that we know about. And the CCS idea is infrastructure.”
Unspent Developer Contributions at least $27.5m?
At the very least we believe a strong case can be made that currently unspent developer contributions in reality are $27.5m. But the opacity of the make up of other entries over the years, especially the T2S fund, raise questions as to whether some developer contributions may have been sent there too.
As 40c points out, in the strictest sense of the word Yarrila Place is infrastructure.
Just arguably not what developer contributions are meant for according to the NSW Local Government Association?
Questions, questions, questions
Originally we were going to cover some other points arising from Council’s accounts today but they will now have to wait until early next week.
But let’s give you a foretaste.
Where did the $25m down payment to Council in the last financial quarter for the long term lease of the airport go? It’s hard to our eyes to see any obvious entry for it. Perhaps council could highlight it?
However, if it has been entered wouldn’t that meant the current available cash on hand for Council, $4,467m would be more like $29,467m? Or has that money been already spent? If so on what? Settling a problematic legal issue or similar perhaps? Or something else?
Is the current $4,467m of available cash on hand enough? Would it currently meet the OLG’s Fit for The Future guidelines and ratios? Is it true $4,467m equates to somewhere between two to three weeks running expenses for Council?
We will look at these in more depth next week