LOWER Hunter councils have been accused of “hoarding” ratepayer’s money to boost their balance sheets, rather than spending it on much-needed infrastructure.
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The Hunter’s so-called “big five” councils – Newcastle, Lake Macquarie, Maitland, Port Stephens and Cessnock – are sitting on $192 million in cash from developer contributions that the Hunter Property Council says “robs” residents of investment in things like cycleways and sports grounds.
An analysis of local government budgets across the region reveals councils spent less than half of the section 94 funds – money collected from developers for projects like apartments – raked in last year.
The Hunter director of the Property Council Andrew Fletcher says that’s a problem because it “robs communities of local infrastructure they need today”
“With a booming population and a decent regional plan which identifies the emerging strategic centres, now is the time for council’s to spend.” he said.
“They have an opportunity to get ahead of the infrastructure curve, while the money is in the bank and before the pressure is too great on communities.”
Figures put together by the Property Council show nearly $50 million worth of levies from developers were collected in the 2015 – 16 financial, but less than half that amount was spent.
But Gareth Curtis, the director of planning at Cessnock City Council, says it’s “not as simple as just spending all the money we get straight away”.
“It’s dependent on ongoing growth and demand and sufficient funds for the infrastructure identified in s94 plans – the cost of which exceeds the annual contributions collected,” he said.
While Cessnock's section 94 balance is comparatively small - about $6.8 million - it saw a huge 45 per cent year on year increase.
Mr Curtis said the growth had come "off a very low base compared to other lower Hunter council areas", a reflection "of new release areas and the Cessnock local government area increasing its share of the lower Hunter housing".
"Cessnock City Council has earmarked around $1 million for expenditure in the next 12 months." he said.
Similarly, Port Stephens general manager Wayne Wallis said spending section 94 funds year by year was “neither realistic nor practical”.
“Simplifying it down to a spreadsheet doesn't help explain that these funds are necessary to renew ageing infrastructure as well as meeting future infrastructure needs,” he said.
Lake Macquarie is sitting on the region's biggest developer contribution war chest, with $97 million pot of funds while Maitland boasts nearly $58 million.
But a spokeswoman for Lake Macquarie Council defended its massive developer fund, saying it had seen a 100 per cent increase in the number of lots developed in 2016 compared to 2013, and that the $97 million balance “reflects the growth of the city and significant increase in the development of new land parcels in recent years”.
She said the council had “dedicated more resources to its section 94 development planning” as a result, and expected to spend more than $20 million next financial year on projects like the new Cameron Park sports and recreation area and Speers Point Park upgrades.
“Major projects such as these can take several years to evolve, due to the time required for property acquisition, design, tendering and community consultation,” the spokeswoman said.
Maitland’s planning director Bernie Mortomore said spending section 95 funds is "dependent on the rate at which new development occurs and hence the rate at which funds come into the plans".
"Often, council will hold funds, pending the accumulation of a sufficient amount of funds to deliver the various works [in] a section 94 plan," he said.
"Council aims to align the delivery of section 94 works with its annual capital works program."
Mr Mortomore said developer funds in Maitland had been used to begin work on an indoor heated pool at Maitland Aquatic Centre and a new “multi-purpose community facility in Gillieston Heights”.
Call for state government to release Hunter infrastructure plan
The NSW government is in the process of developing a new special infrastructure contributions plan for the Hunter, which was due to be released for formal public consultation “in early 2017”.
In October the Newcastle Herald reported the government planned tap developers to help fund infrastructure projects in the Hunter under a plan to grow the region by a third in the next 20 years.
The government would ask developers to help pay for infrastructure projects by establishing a new “Hunter Region Special Infrastructure Contributions Plan”, a sort of levy already used in parts of western Sydney to fund essential projects in new growth areas.
Mr Curtis, from Cessnock City Council, said the sooner that plan was made public the better, because it would “help councils free up development and infrastructure in our new release area”.
Mr Fletcher agreed, saying the government “needed to take a greater leadership role in the debate about who pays for local community infrastructure”.
“The last Planning Minister promised we’d have a regional infrastructure plan finalised by now, but we’re yet to see the draft document and 2017 is slipping away,” he said.
HE said the plan was “needed to give Hunter Development Corporation the capacity to intervene when local government stalls on infrastructure delivery”.
“The Hunter needs policy settings with teeth that compel councils to spend development levies swiftly on the infrastructure they claim it will finance, rather than just hoarding the cash,” he said.