Mayor says plan to take developer contributions from Councils will lead to ‘rate rises’

NSW Councils could be forced to raise rates if the NSW Government take away Developer Contributions. Mayor Denise Knight spoke about the issue with Moffee on TripleM Coffs Coast breakfast yesterday , saying she was meeting with Gurmesh Singh MP this coming Tuesday.

By The Editor

A full recording of this interview can be heard here (montage image below courtesy TripleM Coffs Coast); https://www.triplem.com.au/shows/moffee-for-breakfast/catch-up/65813f68-e8c9-4b26-a250-ada40170b4a5

This follows on from a Local Government Association media release on 16 July criticising the State Government plans and which is reproduced below;

NSW councils to oppose rule changes to infrastructure contributions  

“Local Government NSW (LGNSW) will oppose infrastructure contribution rule changes that threaten to defer and reduce critical developer payments to councils at a Parliamentary inquiry this week.

LGNSW President Linda Scott said the NSW Government had tried to sneak the changes through Parliament during last month’s NSW Budget week to avoid scrutiny, but the peak association for councils successfully pushed back and the legislation was sent back to an Upper House Committee for review.

“These contributions help 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,” Cr Scott said.

“I was surprised the NSW Government tried to push through changes that would result in potential deferral and reductions of these payments without even consulting councils and their communities.

“The proposed new rules may help developers, but they will potentially hurt communities and shift some of these costs incurred by new development back to communities.

“The changes could also result in the delay or removal of projects for the public good from local government community plans, with a consequential hit to important community infrastructure such as pools and parks, as well as investment and jobs that would have been generated through the design, development, delivery and operation of these public facilities.

“I am looking forward to speaking on behalf of councils and our communities at the Upper House Committee inquiry, where I will be calling on this rushed legislation to be withdrawn so councils and our communities can ensure vital community infrastructure can proceed, and councils are no worse off.

“This Bill, if passed, breaks the nexus between development and place. The NSW Government could regulate to collect a contribution from a development in Penrith and spend it in Potts Point.

“Communities that bear the brunt of density deserve to receive a public benefit in return. This Bill risks breaking that strong link between a place and a public benefit.”

Cr Scott said a cursory review of the proposed changes revealed a number of significant problems.

“The Bill also seeks to make permanent some troubling temporary arrangements, including allowing the Planning Minister to direct all councils to permit deferral of infrastructure payments by developers until the completion of the project,” she said.

“Communities shouldn’t have to wait for thousands of new residents to move in so that the roads can be built, and then dug up to build the drains. This reform condemns infrastructure upgrades incurred by new developments to the very end of the process.

“Importantly, it would delay the provision of parks, cycleways, footpaths, stormwater drainage and a plethora of vital infrastructure and leave new residents without essential services and facilities when they move into an area.

“Local governments are advocating for the value of the developer contributions to cover the cost of increased local infrastructure required to meet the needs of new residents.

“The NSW Government must provide assurances that councils and our communities will not be worse off under any of these reforms.”

Cr Scott will be joined at Friday’s Parliamentary hearing by representatives from Illawarra Shoalhaven Joint Organisation, Western Sydney Regional Organisation of Councils and Riverina Joint Organisation, who will also argue for the withdrawal of the Bill for further consultation.”

See; https://www.lgnsw.org.au/Public/Public/News/2021-Media/0716_contribution_rules.aspx

Twenty two Sydney Councils yesterday ran a full page advertisement in the metropolitan daily newspapers voicing their concerns;

From the SMH, Thursday 16 September 2021

Local reaction

Mayor Knight’s plea for residents and ratepayers lead to a number of reactions locally. Together We’ll Fix It candidate for Mayor, Rodger Pryce, posted the following on his social media site;

“So, lots of commentary about the State Government suggesting that they are considering having Council contributions, paid to and managed by themselves.

There is also the suggestion that whilst the contributions may be collected for a specific purpose, or use, there is no suggestion that when the funds are spent, that it will be spent on what it was collected for.

If this is the case then that of course would be totally unacceptable.

The other question that exists is, why has the Council not spent, what is rumoured to be, $10s of millions of dollars of contributions, which remain in Councils bank accounts? Add to this, millions of dollars in grants, either allocated or, in fact given to our Council, also remaining unspent in Council bank accounts.

We are aware of grants being given to our Coffs Harbour LGA, to be implemented by Council, back in 2019.

How can we expect our Government to keep giving us grants when we haven’t spent what we have already been given?

The question does need to be asked: Can we please have Council disclose, how many million dollars of contributions and grants are in our bank accounts? Can this include an aged report, in other words, identify for how long have some of these contributions and grants been sitting waiting to be spent?

Let us also remember, the NSW Treasury, via TCorp, it’s finance arm, would not lend us money for the CCS project as it viewed a percentage of the cash we have invested being in too high a risk investment areas.

So why don’t we get the money spent?”

———

CCO editorial comment;

It is very doubtful if this move by the State Government relates solely to the CHCC. And some of the fears and issues raised by the Local Government Association have genuine merit, especially in regards to the deferral of developer contribution expenditure.

However, the irony of Mayor Denise Knight urging local residents and ratepayers to contact the State Government in opposition to this proposal is rich indeed.

Approximately 15,000 locals did just that via a petition in regards to the CCS in Gordon Street, now to be known as Yarrila Place. Approximately 800 people submitted objections to this proposal to the Ministry of Planning.

They could see a myriad of problems with the proposal and clearly articulated many reasonable concerns in our opinion. Many see the CCS itself as a guaranteed rate rise generator in spite of the promises of the Mayor, who has since announced she will not run for re-election.

Their entreaties were ignored by four Councillors and Council’s Executive Management and they were scorned as ‘a noisy minority’.

Among the concerns raised by that so called ‘noisy minority’ were that that the CCS would effectively drain money from other essential services.

Our finance commentator, Rob Steurmann, a retired federal forensic auditor, has raised here on many occasions concerns about the opacity of council’s accounts.

Yes, they may meet the required format under the Local Government Act, he said, but in his learned opinion many concerns arose about the expenditure of government grants, how they were accounted for and how some still seemed to be unspent.

Clearly this may also be an issue in other LGA’s in NSW too. As we say above it is doubtful this legislation is driven by the actions of one NSW council alone.

However, it is hard not to have some degree of suppressed schadenfrude in the position Council now finds itself in, a German term which means “enjoyment obtained from the troubles of others”.

When is it okay to feel schadenfreude? It depends. | CBC Radio

The worsening opacity exhibited by this Council is an issue we return to time and time again here at CCO. Only to be ignored and for the situation to usually just worsen.

If this proposal by the State Government were to shine just a little more light on the workings of our council, just some more transparency even, then it has the germs of some good outcomes at least.

________

Lead photo: From Local Government Association media release 16 July 2021.

14 thoughts on “Mayor says plan to take developer contributions from Councils will lead to ‘rate rises’

  1. A band of Sydney councils has organised and is furiously opposing this attempt by the State Government to capture developer contributions. The State has a fight on its hands, and may get done over on it.

    Meanwhile, locally, the fight is led by Cr Rhoades, not Cr Knight, who’s following. Lost of all credibility and gravitas, for D. Knight any of her rare “community” causes have long been about optics.

    Rodger’s questions about if and why CHCC management hasn’t spent its contributions need to be strongly investigated in light of heavy costs due to the builder’s contract being signed without funds in the bank — was it Plan D, to use the contributions in case of the need for emergency payments?

    On a much-needed front, Shelley Hancock, readers will be relieved and delighted to know, has taken a powerful step into cleaning up local government management. And moving at lightning speed on it.

    She’s going to instigate rules to check their credit card usage, wherein the major failures lay, commencing as fast and as soon as June of next year, no less.

    Well into the new term, to boot, after new mayors and councillors have set about making requisite changes, all around the State.

    Not that it’s in the new CHCC Council’s remit, though worth a thought. The only way the Office of Local Government is going to do its job properly is if an example is made of a local council, whereby a mayor and governing body investigate and expose licentious, bad, mud pie, wanton and self-serving management.

    Throw the state and national media spotlight into the NSW laughing enclave.

    1. Agree that the Mayor is merely the mouthpiece on this, parroting the concerns of the GM and senior management who must be quaking in their boots at the thought of losing control of the rivers of gold that are Developer Contributions flowing into Council coffers. It’s clear from the annual financials that there are millions of dollars which have accumulated over the years from property development sitting in Council’s bank which have not been spent on the things for which they were levied. Rodger Pryce has highlighted this recently locally but the suggestion is that it seems to be a problem in many LGAs.
      The old chestnut of a potential rise in rates has been trotted out to strike fear in the community in attempt to garner support for opposition to this. But hang on been there, done that. Remember the reasons behind the special rate variation a few years ago?…….to bolster funds for “desperately needed” sewerage and water infrastructure spending. How’s that going?
      I have little faith that another bureaucracy (NSW govt) is somehow going to do a better job of managing spending, remotely, on local community projects and infrastructure than our Council but at the very least if this shines a light on the mismanagement of these funds in all LGAs and change occurs for the better……bring it on!

    2. “”Local communities rightfully expect their council to be responsible when it comes to spending their hard-earned ratepayer dollars so these new guidelines will not only help manage their credits card expenditure more efficiently but also give ratepayers confidence about how their money is being spent,” Mrs Hancock said.””

      Great to see Shelley is working tirelessly behind the scenes protecting “hard-earned ratepayer dollars”. It’s just a pity she’s got her priorities arse-about.

      Instead of worrying about whether GMs are buying their lunch with the corporate credit card, Shelley, how about zeroing in on Coffs council’s irresponsible spending of $82m + + + (and rising) on a building the majority of community members neither want or need? A situation, I might add, that you personally made possible by delaying local government elections.

      Putting aside council’s failure to secure TCorp finance and state government grants for the CCS; the exhorbitant waste management debacle and associated litigation; and, the firesale of council assets, just how is drowning ratepayers in debt for the next 30 years to finance the unwanted CCS considered to be giving Coffs ratepayers “confidence about how their money is being spent”, Shelley?

      As M/s Hancock has never responded to any of my previous correspondence, I don’t expect I’ll get a reply.

      1. And, directly, millions upon millions spent on wanton legal actions, with resultant inefficiencies costs (which have not yet been raised by a single councillor) along with consultancy spends- and, at best, the phenomenonal opportunity costs of “mud pie” producing management, sending a region into backward-binding constrictions across the board, for the remainder of a region’s occupation.

        Shelley Hancock is the Mal Colston of State Government. A do-nothing standard which as mentioned previously perfectly suits the State.

        The entire local government system needs an overhaul, a re-envisioning. (Setting higher standards for managerial positions is a good starting point.) Years ago an entity existed called the “government sector”. This no longer exists.

        The corporate world and the government world has now merged. It’s a blended entity, no longer definable nor either operative independently. Be interesting to see if Australia stands alone in having achieved this severe degree of opportunistic failure.

        Every level of government is now lost to it. But local government is in such a state that it cannot sustain itself as it is. The loss of control of costs, the heavy overspends, mostly unnecessary, need to be paid somehow and on current trajectory those fiscal generators place too much burden on non-bureaucratic workers — a pinch being unavoidable. Currently government systems rely solely on population growth to pay for those inefficiencies, growth which in turn produces a smoke-screen veil hiding them.

        Again, the final solution resides in an informed electorate; aware, putting pressure on its representativies or, better, electing high-achieving people in the first place thence appointing managers of much, much higher standard, who then appoint that standard of staff.

      2. Quick addition. Having blended, a re-envisioning of the system, beginning with local government which lends itself to a starting point, requires the decision to be made about whether it is to revert to a more defined separate entity as a “government sector” or whether it is to pursue corporate involvement in its operation. There are benefits in both. It looks to be an unstoppable progression into a government-corporate (or business sector) blend, or at least it’s difficult to see a reversion.

        The latter would then invoke the need to set stronger definitions as to how that involvement is to occur. It’s currently, and long been, open slather. Local reliance on consultancies and legal firms is a case in point at exorbitant costs.

        Without those definitions, by way of legislated structures and standards, the situation continues whereby the worst elements of a government operation are maintained, with loss of the best.

  2. “Bullshit Weakly”, one of the Community’s Remaining Independent Print News outlets, can reveal that an outgoing (as in “I’m not going down with the ship!”) senior councillor has re-discovered her long-lost Sense of Civic Duty.
    “I found it down the back of my office chair. It must have fallen there and been covered up by Common Sense, Integrity, and An Understanding of The Concept of Democracy, which had also gone missing. I found it when I was cleaning out the office, because the community have made it pretty obvious that they don’t want me anymore. It’s a bit ironical that I should find it now, when it’s too late. I suppose that a lot of people will say that, by reactivating my Sense of Civic Duty, I’m only responding to a guilty conscience, that I’m hoping that, by doing something right, future mention of my name will not cause people to throw up, but I prefer to believe that I’ve only recently been able to see over the pile of stuff on my desk, stuff like Egotism, and my Plans for Monument Building. This reactivation hasn’t been easy. I first had to swallow a heap of Hypocrisy and Irony, but I managed to wash those down with a nice glass of fine vintage Shiraz.”

  3. When I heard of this proposal I was horrified. It is so like a coalition government to take money away from councils to give back to developers while the ordinary mums and dads end up paying for it through their rates. Of course Gurmesh Singh will support it at the expense of the rest of us. I might have expected the worst possible construction to have been put on the mayor’s thoughts and words by the usual suspects. The fiscal responsibility shown by this council is borne out by the Commonwealth Bank’s willingness to establish a fixed interest loan over thirty years. Untold millions stashed away? I wait for proof of this.

    1. With respect your comment shows a complete lack of understanding of the issue or the way developer contributions work (or should work) within the planning system as well as an attempt to portray this as another (imagined) attack on the Mayor. Misogyny rearing it’s head again?
      You want proof? It’s all here in Council’s annual financials. From 2019/2020 only as it seems 2020/2021 haven’t been published yet but I assure you there is more to come.

      https://www.coffsharbour.nsw.gov.au/files/sharedassets/public/your-council/corporate-planning-and-reporting/att-3-coffs-harbour-city-council-financial-statements-2019-20.pdf

    2. Well, Margaret, Little Charlie has provided you with the proof that you require. We await your further comment.

      He’s also raised another interesting issue, where the abundant public criticism of Denise Knight’s behaviour is concerned.

      It is specifically not my intention to offend you. However, I feel justified in asking you several questions.

      Both your position as a passionate Knight supporter and known member of Advocates for Advancement, the secret society which has been proven to use misinformation in pursuit of its goals, and your position as a defender of culture in the Coffs community, has led to the frequent publication of your views including accusations of misogyny, in various media, hence, the following questions:

      Is it misogynistic for men and women to criticise the behaviour of a woman who has, in my opinion, done incredible damage to our community? Is such criticism indicative of a pathological hatred for women, or indicative of a complete lack of respect for one individual and her flawed judgement? Were the outgoing mayor a male who had used the same despicable behaviours as has Denise Knight, would you be accusing his critics of misandry?

      Does the fact that so many people (your “usual suspects”) disagree fundamentally with your views regarding the mayor, mean that any expression of such disagreement can legitimately be met, by you and your fellows, with further accusations of misogyny? It has, in the past, seemed to be your default response.

      Finally, if I ask why you choose to make oblique references to those who disagree with you, (I assume that a popular mayoral candidate is included among your “usual suspects”), rather than taking a direct approach and naming names, am I guilty of misogyny, or am I simply commenting upon your apparent lack of courage?

      If you wish to criticise the behaviours of the common people, Margaret, you may gain some respect,and some credibility, by stepping down, rather than just looking down, from your elevated social position.

    3. Margaret, the proof you are waiting for re “Untold millions stashed away?” in total is on page 18 of the Council’s current business report which the Ed. kindly drew to your attention at the foot of Julian May’s comment of Sept 22. As of 31st August 2021, CHCC has 32 investment packages totaling $252,909,524.75.
      My question remains; how much of this investment money is an accumulation of Development Contributions and Government Grants that should have been appropriated to infrastructure?

      Editor: Tom, we will give both you and Margaret the answer to that question tomorrow. Stay tuned 😉

  4. “The fiscal responsibility shown by this council is borne out by the Commonwealth Bank’s willingness to establish a fixed interest loan over thirty years. ”

    I believe that T Corp found this council’s investment strategy to be flawed, necessitating a search for alternative finance.

    “I might have expected the worst possible construction to have been put on the mayor’s thoughts and words by the usual suspects. ”

    The worst possible construction is currently being carried out in Gordon St, as a result of the mayor’s thoughts and words.

    There are none so blind as those who will not see.

    Editor: The financial accounts in this week’s agenda show 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 TCorp had concerns about. See Pg 16 here; https://infocouncil.coffsharbour.nsw.gov.au/Open/2021/09/CO_20210923_AGN_2257_AT.PDF

  5. How much of our money did Council lose during the GFC, due to the collapse of second tier fincial entities which Council had placed our money with?
    What have they learnt?

    1. Rodger this I posted a while ago =
      CHCC lost $8.8 million over five years in a ‘high-risk’ investment since the start of the Global Financial Crisis in 2007.
      This so called cultural center they are investing in / moving into will make the above look like peanuts.

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