MOREE Plains Shire councillor Kelly James was muted during a fiery extraordinary council meeting on Thursday, convened for councillors to discuss a recommendation from senior council staff to request the NSW Government to ‘stage’ funding for the Special Activation Precinct south of Moree.
Cr James attended the meeting via audiovisual link from Queensland.
Councillors debated a report tabled by senior staff warning the current delivery model could overwhelm Council’s finances if proceeded as planned.
Report 16.1 Moree Special Activation Precinct Update notes Council is engaging with the Regional Growth NSW Development Corporation regarding the negotiation of the Deed for the Moree Special Activation Precinct Master Plan.
The report recommended Council endorse a staged delivery approach for the Moree Plains Special Activation Precinct infrastructure; support an initial infrastructure cap of approximately $40 million, with road infrastructure capped at approximately $20 million; delegate authority to the general manager to formally write to the Regional Growth NSW Development Corporation seeking this revised staging approach prior to the finalisation of contractual arrangements; and note that this approach is intended to protect Council’s financial sustainability while still supporting the long-term objectives of the Special Activation Precinct.
The recommendation before Council was to ‘stage’ the project by reducing the initial infrastructure burden from $79 million to around $40 million – a recommendation Cr James strongly disagrees with.
Cr James said asking the State Government to stage funding could hinder progress of the SAP.
“It could stop the development all together, or damage the amount (of funding) we do receive,” Cr James said.
“We all know the majority of spending is always spent in the cities, and the government will not hold on to funds forever.
“I fully understand we receive the cost of depreciation of the infrastructure once it’s built, but by design, SAPs are set up to succeed and grow regional communities, not send them under,” she said.
An artist’s impression of the Moree Special Activation Precinct.
James: ‘staging’ funding is something I cannot support
Cr James said she believes Council can refuse to take on the assets once completed and is not responsible for tenders or contracts.
“Tenders have already been sought by RDGC and contracts are ready to be signed – what now?
“We go back and spend another 12 months stuffing around to re-write tenders and then contracts and then what?
“Progress in this town is always stalled by Council in some way or another, and ‘staging’ funding is something I cannot support,” she said.
“The SAP development, a gift from the state government, will not come again.
“No-one is thinking forward. When the state government engages tenants for the plots along the SAP, Moree will receive immense growth.
“The SAP isn’t any different to any other development where the developer – in this case the state government – subdivides land into blocks.
“It is my understanding, they are responsible for building everything initially. This means all infrastructure, roads, water access, landscaping, lighting and so forth, then sell each block at a profit.
“Yes, all of the infrastructure becomes the responsibility of Council after construction is finished,” Cr James said.
“Council also has the option to reject the handover of the infrastructure until such time as rates are able to be collected from the sold sites.”
Cr James says “certain councillors” are “hell-bent on stomping on growth” in Moree.
“We have been screaming out for housing, growth, jobs, industry and the like for decades. We have been handed a gift that costs us nothing to build and I firmly believe by staging works, we will lose,” she said.
“What costs $90 million now will cost double that in five years’ time, and we won’t get this chance again.”
Building boom likely
Cr James says when construction does get underway, Moree will experience a major building boom.
“There will be more work than our local contractors will be able to handle, and specialists will be required for a job of this scale,” Cr James said.
“This means motels, stores, pubs, clubs, corner stores, coffee shops, retail shops, hardware stores, mechanics and hairdressers – everyone across town – will benefit from the influx of workers required to build the SAP.
“People working on the SAP will have to eat, sleep and live,” she said.
Cr James said Thursday’s meeting left quite a few questions unanswered.
“I was approached by a local rate-payer and asked why no-one questioned, if the SAP is done in stages, what will the cost of stage two be in five or 10 years’ time,” she said.
“Let’s face it, the cost won’t be the same as if it was being built tomorrow, and with council funds not paying for the build, there’s no guarantee we’ll get additional funds to cover this from the State Government.
“Where is the rest of the money going to come from to complete the project if there is only $39 million left, but the cost has blown out to another $80 million,” she said.
Staged response may deter investors
Cr Brooke Sauer said at Thursday’s meeting, she feared a staged response might frighten investors.
“I fully appreciate the financial and fiscal responsibility, and the financial pressure that this puts on us, too,” Cr Sauer said.
“I want to reiterate that we have to balance that with the social and economic impact the Special Activation Precinct presents as well.
“I’m not saying we’re not going to get a Special Activation Precinct. I’m not suggesting that at all.
“I am really concerned that at the moment we’ve had significant delays over the years and not at the fault of anybody in this room, or the council, and possibly not the State Government,” she said.
“But there has been some significant delays with significant interest from a number of anchor tenants that have disappeared because of delays and uncertainty, and things like that.
“I am super-concerned the staged approach may have greater impact potentially on securing reputable and great anchor tenants that will attract further anchor tenants as well,” she said.
Cr Sauer said a staged approach may allow other local government areas to take up the slack.
“I’m also super-concerned that neighbouring councils, who did not secure the special activation precinct investment, have moved on and are significantly supporting infrastructure investment as well, which will further diminish our capacity to attract great tenants to create industries and sideline industries,” she said.
“I am absolutely a little confused about how to balance all of that, but appreciate that we do not want to burden the community any further.
“I’m also very conscious of what the message says when we go, ‘sorry, we’ve realised we can’t afford this’ and we’re winding this back when there’s been so much hope and prosperity pinned to what the Special Activation Precinct can deliver, particularly around economic growth.
“I guess my use of the words ‘winding back’ is probably wrong. Staging, but with great risk that the rest of the funding will not be there to complete the next stages, is probably my point,” Cr Sauer said.
Potential to transform the shire
Moree Plains Shire mayor, Susannah Pearse, said in a media statement released by Council on Friday, the SAP has the potential to transform the shire over the next 40 years.
“It has the potential to attract not just new businesses to town, but also an anticipated 4000 jobs to go with them,” Cr Pearse said.
“We need industry diversification if we are to sustain and grow our population.
“But we have to balance that opportunity with ensuring we are also looking after our existing ratepayers, and a staged approach provides a way of doing that.”
General manager Natalia Cowley said in the same media release, while the Moree SAP has the potential to attract new businesses and jobs to the shire, Council needs to ensure it has adequate provisions to fund operations, maintenance and renewal of all infrastructure which will be handed over to council once complete.
The report shows that the $79m of infrastructure assets will result in approximately $1.4m in additional annual depreciation for Council, requiring Council to either reduce services or increase rates to cover the additional annual expenditure required.
“While some of this will eventually be offset by the rates and charges revenue from new businesses operating in the SAP, it will take some time to see this revenue come in,” Ms Cowley said.
Cr James questioned the logic behind the report’s reasoning that $79m of infrastructure assets will result in approximately $1.4m in additional annual depreciation for Council
“Depreciation is not paid to anyone – it is a line item on a balance sheet,” she said.
At Thursday’s meeting, Council resolved to continue working with the NSW Government and request a staged approach to the development, limiting the initial asset transfer value to $40m.
“Council has at all turns over the last five years, maintained support for this project,” Cr Pearse said.
“It is rare to get this level of State Government investment, and we are genuinely grateful and excited by what is to come.
“The staged approach is designed to ensure Council’s financial sustainability while still supporting the long‑term objectives of the Special Activation Precinct.
“Council already has a maintenance and renewal backlog on our existing road, water and sewer infrastructure and long-term loans we are paying down, including for the Moree Gateway.
“Many councils within the region have increased rates significantly – 58.8 per cent at Armidale and 38.88 per cent at Gunnedah – and that is not a path we want to be heading down,” she said.
“Council has asked for the NSW Government to work with us on a balanced approach that supports the SAP but also looks after our existing businesses and ratepayers.”
‘Build it and they will come’ the wrong approach
At Thursday’s meeting, Cr Pearse referred to the Gateway development, which has failed to attract long-term investors.
“I think we also need to be cognisant that this council has historically already done a land development project on the basis of ‘build it and they will come’,” Cr Pearse said.
“We’ve seen the results of that, which I think we would all agree have been hugely disappointing.
“Currently, this council and rate-payers are paying down a loan from a build-it-and-they-will-come development, where they have not come.
“In an ideal world, I’m sure all of us would love to have this massive development happen and have it filled with tenants and reach those possible population projections of increasing our population by 20,000 people,” she said.
“That is absolutely what we’d love to see happen. But we have to balance risk and potential reward, and we have to operate based on fact, and we know the facts are that this depreciation will hit us in the first year that assets are handed over,” she said.
“That is a known quantity, whereas I suppose the occupancy projections are not actually a known quantity.
“I think we have to operate based on the facts available to us now, and that’s the best we can hope to do,” Cr Pearse said.
Cr James muted and expelled
Toward the end of the meeting, Cr James was asked by the mayor to refrain from interrupting while the mayor had the floor.
This prompted Cr Kerry Cassells to call for a point of order directed at Cr James for “overtalking and being abrupt and rude”, to which Cr James replied: “Good for her.”
Cr Pearse asked Cr James to “please refrain from speaking”.
“As chair, I am dealing with the point of order. I have to rule on the point of order, and I rule that the point of order is carried.”
Cr Pearse referred to clause 15.10A, and asked Cr James to apologise without reservation, to which Cr James replied: “Ooh, I’m sorry.”
Cr Pearse did not accept Cr James’ apology was genuine and asked that Cr James be muted.
“This disappoints me greatly,” Cr Pearse said.
“We need to be able to have these conversations as councillors; we need to be able to have robust debate respectfully.
“Cr James, you need to, like all other councillors, act in accordance with the rules of this meeting. “Can you please just make a genuine apology for speaking over me and then we can continue on with the meeting.”
After a few seconds of silence, Cr Pearse addressed all councillors.
“Cr James has failed to comply so we have the option of expelling Cr James from the meeting,” Cr Pearse said.
Cr Cassells moved Cr James be expelled, seconded by Cr Debbie Williams.
After Cr James was muted and expelled from the meeting, Cr Pearse said she was disappointed.
“Everyone is entitled to an opinion and all councillors are entitled to have varying opinions, but the code of meeting practice, and the rules in the code of meeting practice, are there to actually ensure that we can have respectful debate,” she said.
“I’m disappointed we didn’t, but we will move on with our business.”
Cr Cassells moved that the recommendation be adopted. Cr Mailler seconding the motion, with the recommendation being adopted by council.
“There’s a lot of information here. We have to trust our general manager, which we do, to do the right thing and not overburden our community,” Cr Cassells said.
“And a lot is being said about financial sustainability. We have to grow our town, not send it backwards. We are the town on the move, not the town going backwards, so I think we have to do this.
“It’s been on the books for eight years, and we need to go and progress our town. I think it’s a great idea,” Cr Cassells said.
The one-hour video of Thursday’s extraordinary meeting can be viewed HERE.
More information on the SAP can be found at Moree Special Activation Precinct Regional Growth NSW Development Corporation.
