Redland City finances and infrastructure spending

Traffic on dual carriageway north of Victoria Point Shopping centres

Traffic just north of Victoria Point Shopping centres

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:

Council Term Capital Expenditure
per capita per year
Seccombe 2004-08 $376
Hobson 2008-12 $345
Williams 2012-16 $275

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

 

 

 

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3 thoughts on “Redland City finances and infrastructure spending

  1. If we can afford to loan the State Government, then why can’t we reuce the rates for local homeowners and benefit all Redlanders.

  2. How amazing, all that money and Macleay Island needs roads with proper drainage, sewerage to protect the bay, a basic all tide recreational boat ramp in safe non commercial waters, better parking facilities…. and much much more before we even think about luxury sporting facilities.

  3. Everything is relative. I like to compare budgets in order to get a grip on what the opportunity cost of a gesture like this might mean. Three years ago I attempted to bring a significant philanthropic injection into the city and from memory, the community budget then was $33 million. I am not aware of what the latest community budget is but I’d love to know. A road return to state representing three times the community budget whilst simultaneously increasing our population capacity by 33% doesn’t quite add up. But then neither does cramming 4 times more people into a 300 hectare development than 7 other similarly sized projects proposed nationally in master-community planned projects that are well serviced with comprehensive infrastructure and self-sustaining, not like the ones proposed here.
    So what community provisions and servicing would we be sacrificing in order to bounce money we don’t have, back to the state government in a damning precedent that could come back to haunt us in repeat expectation, or future budget cuts?

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