Mayor Karen Williams and her challenger have different views on the health of Redland City’s finances.
Mayor Williams says that $100 million of Redland City ‘s cash reserves can be lent to the State Government to help it fix state roads between the proposed Shoreline development and Cleveland. The Council has offered to lend money to the state government as part of a three-way deal in which council and private investors would fund upgrading the state road. According to a Bulletin report, Mayor Williams said:
We are in an enviable position to provide a loan to the state and, at the same time, quarantine the value of revenue raised in Redlands by the state government through the hundreds of millions of dollars of stamp duty they will raise from major projects such as Toondah Harbour, Weinam Creek and Shoreline to repay the city through a legally binding financial agreement.
Details of the Mayor’s proposal have not been made available publicly, for review by residents and ratepayers.
Financial time bomb says challenger
Challenger Greg Underwood says there’s a financial time bomb ticking for future councils and ratepayers.
“I’d like to find out why Council’s borrowings haven’t reduced from $50 million, when it has benefited by over $60 million with the return of water revenues.” he said. He also pointed out that under the Williams plan, “Major improvements and upgrades, including the purchase of land for much needed sports fields – will be much harder to pay for by future councils and ratepayers.
The Mayor has often pointed to her record in achieving financial surpluses. But her challenger says residents should be aware that the surpluses are only arising because Council is consistently not completing its works program.
Capital investment on infrastructure
Underwood is particularly critical of the current council’s spending on infrastructure, saying:
“According to its own finance department and the Queensland Treasury, Council is neglecting the repair and replacement of assets such as roads, drains, buildings and parks. The official measure, which looks at how well Council renews or replaces assets, targets over 90% in the long term. Council’s performance was only 24.1% in 2015-16 – the lowest in six years.”
Mr Underwood said that capital spending has reduced under the current council because important public projects had been deferred. If capital expenditure is assessed on a per capita (inflation adjusted) basis it becomes evident that less is being spent on infrastructure works. Figures calculated by Redlands2030 are:
per capita per year
Impact of housing development on City finances
Greg Underwood has also raised concerns about the impact of housing development on the city’s finances.
“I am also concerned about the hidden cost impacts of unplanned housing developments on ratepayers. Developers pay a set amount for roads, water and sewerage works. The state limits developer contributions to $25,000 per 3-bedroom residence, whereas Council was previously collecting over $40,000 per residence. As well, the Cleveland CBD has been given further developer concessions, which are being banked by developers,” he said.
Ratepayers pay for everything over the capped developer contributions. Council is also responsible for ongoing renewal and care of these assets. Unplanned development costs simply add to the ratepayers’ future burden.
Checking the books
Redland City has had considerable turnover in the role of Chief Financial Officer in recent years. The Bulletin recently reported that Council will soon be employing its fourth CFO in four years.
Greg Underwood says he’ll call for an immediate independent audit if he’s elected Mayor on 19 March.
Redlands2030 – 17 March 2016