Upton asked to intervene in sewer loans

MINISTER for Local Government Gabrielle Upton has been asked to intervene in a $6 million redirection of funds by Orange City Council for projects around Orange Airport.

The Orange Residents and Ratepayers Association has written to Ms Upton asking her to investigate two internal loans from the sewer fund to fund land acquisitions within the controversial proposed Orange Airport Industrial and Technology Park precinct and the emergency helicopter hangar. 

Both loans required ministerial approval but the projects went ahead without it, placing the council in breach of the Local Government Act.

The hangar loan was approved at the end of 2016, but the other is outstanding.

Councillors at their meeting last week resolved to seek an external loan should it fail.

The report to councillors said internal loans carried a 2 per cent interest rate.

Ratepayers have been subjected to annual sewer rate increases of 7-10 per cent from 2013-16 to bring the sewer fund into surplus. 

Association president Tony Mileto said the ratepayers submitted the letter after they were dissatisfied with the council’s response as to why the loan was taken at all.

“They said ratepayers expect the council to save money,” he said.

“They haven’t saved them money because the ratepayers must bear the brunt of the [interest] and if that land is in the water catchment area, people who live around that area will possibly lodge appeals in the Land and Environment Court.”

Council spokesman Nick Redmond said the land in question had already been purchased for the industrial project and a 4.7 per cent loan on the open market would cost an extra $380,000.

He said the council was not concerned the matter had been referred to the minister.

“The question now is how to best manage the loan to limit the cost,” he said.

“The money comes back in before the need to do that capital work – it doesn’t go out forever, it has to be repaid.”

Mr Redmond said the sewer charge for residential properties was $1.30 a day and increases would come down to 3 per cent next financial year.

“We have a 30-year funding plan that has more than $80 million in proposed future works,” he said.

“After the loans there is currently $8.4 million in the sewer fund.”

Ms Upton is yet to receive the letter and a spokesman said it would be considered.


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