Cost neutral

ERC defends projects amid persistent rumours

“We won’t be spending any council money that won’t be paid back.”

That is Edward River Council general manager Phil Stone’s promise when it comes to the Seniors Living Precinct proposed for Deniliquin.

Mr Stone has been forced to defend council’s decision to proceed with the project before final house prices have been confirmed, because of circulating rumours.

Speculation is rife that the departure of some senior staff at council has been, in part, because they do not agree with council pursuing the project.

Council has now been asked to answer to the rumours twice, and Mr Stone refutes they are related.

He maintains the comment made to the Pastoral Times in April when he said “Edward River Council is not immune to the labour shortages the rest of Australia is facing” and that staff turnover is still well below the Australian average.

There is also rumoured to be a report which indicates the SLP is not feasible, but Mr Stone said “if there is a report that says it is not feasible, I have not seen it”.

Council’s involvement in the SLP was a topic of discussion at council’s recent budget roadshow.

It is seen, along with proposed upgrades to the Deniliquin Airport, that it will have little financial benefit to council.

As such, both are seen as projects that should be put on the backburner until more detailed financial planning can be completed.

Airlie Circuitt, who has a history in local government and attended the Deniliquin roadshow, said both are examples of council ‘putting the cart before the horse’.

“They are spending our money, as ratepayers and taxpayers, to prop up these developments instead of putting them on hold until they are demonstrated to be solid investments,” she said.

“As far as the seniors living project is concerned, council still can’t tell us how much the homes are going to cost.

“Proceeding with the SLP without factoring in the current and ongoing escalating cost of building and infrastructure is a concern.

“It would seem the SLP homes could well be beyond the reach of most people if the current, and perhaps ongoing, national financial climate is any indication.

“It’s taken the community 30 years to get to this point (on the retirement village), what harm is there in waiting a little longer to make absolutely sure it is viable?

“Council seems to be pinning its hopes on this project, which does not seem to have a business plan or a budget. Or if it does, why are they not making them public?

“I don’t know how they can justify spending millions on the SLP at this point.”

Mr Stone has suggested that because of the nature of the project, council is under no obligation to make the SLP budget public.

He said it is designed to be cost neutral, meaning any spend is covered by the price of occupancy.

“The view is that we will need cash to build the SLP, but that it will be paid back as the new residents buy in,” he said.

“The SLP has been the number one priority of council since I got here, and it has been marketed on being a cost neutral exercise.

“As an entrepreneurial exercise, the budget is immaterial.

“Council may, however, choose to subsidise the costs.

“That will be a decision of council later on, once we know what the homes may cost. We are waiting on final house prices, and expect to decide on those price points in July.”

While admitting community sentiment toward the project has been varied, Mr Stone said he has confidence in the project.

“There are various opinions about the project, and there has been an ebbing of interest given the delay to the council elections and getting the new council settled.

“The audit risk committee has said it is a good project and council has resolved to proceed with it.

“Overall this is a great project - I’m very confident in it and I believe in it.

“By the beginning of August we will start to see some works, mainly on road formation.

“Stage one will be six homes, built as one contract, and we did have more than 50 people express interest 12 months ago.”

Mr Stone said he could understand concerns relating to the proposed Deniliquin Airport upgrades, confirming that it will not be a revenue raising exercise.

But he did say the upgrade was necessary.

He also said if either the airport or SLP projects were shelved, any funding allocated would be lost.

“We have received one $1 million grant (for the retirement village) and we have applied for $2 million more, and obviously any grants reduce our borrowing and reduce the costs to the residents.

“If council does decide not to proceed based on costs in July, the grants we’ve received to date would need to be handed back

“The money for the airport we have so far was funded by the Federal Government, but we did not receive the matching funding from New South Wales like we thought.

“What we have done is to allocate a portion of funds from a different funding round, and we hope to go to tender soon on a detailed design.

“The airport will not generate revenue, and I understand the community point of view in regards to that, but the runway is at the end of its life and may become dangerous.

“Our choice is to upgrade or demolish the runway, and I have a feeling no one wants us to demolish it.”