Councillors at the February 8 meeting adopted a notice of motion to borrow $5 million over a maximum of 10 years with repayments to the loan generated from the Nelson Bay Smart Parking revenue.

"Delivery of the plan was a key aim of our 2018 application for a Special Rate Variation - when this got knocked back, we had to investigate another way to fund the much needed work in the bay," mayor Ryan Palmer said.

"We've been working closely with residents and business over the recent weeks ... this will deliver more car parking, street trees, pathways, lighting, and corridors that connect the CBD with the foreshore. We will be engaging with the community to determine their priorities."

Cr Arnott said that alarm bells should be ringing for every ratepayer. "No notice, no warning, no briefing, no community consultation, and no full staff report on the proposal - but the council wants to borrow $5 million from a bank so the CBD can be upgraded.

"If I was a banker - a lender in a bank - and the proposed funding source was only active for a number of months a year with no idea how much it will raise to cover the loan - I'd be saying no.

"Even if the Smart parking earned enough to cover it, there wouldn't be much if any at all left over to 'continue additional capital works, maintenance and marketing in Nelson Bay'.

"Council's own finance manager says: 'the resultant interest repayments will have a negative impact on the underlying result for each year...this is anticipated to add around $100k to council's interest repayments' per year."

Cr Arnott moved an amendment requesting a full council report outlining the financial feasibility of borrowing $5 million over a maximum of 10 years, but it was unsuccessful.

TRAA's media officer Geoff Washington said that the action would seem premature given the acknowledged uncertainty over revenue from parking, and the motion needed to accommodate the wider long term financial plan.

"The motion mentions construction of a new car park without specifying location or other details and given the recent controversy over parking, we would have expected prior consultation as well as more details in this motion."

TRRA recognises the attraction of raising such a loan in the current circumstances of low interest rates. "However, we draw attention to the advice provided to council by financial manager that 'while the Smart parking infrastructure has only been installed for a little over a month, it is difficult to predict with any certainty the additional revenue that may be generated from this initiative'.

"TRRA believes that a much more detailed business plan based on at least some months of the financial outcomes from Smart parking is essential before making such a major loan commitment.

"We all welcome the turn around in visitor numbers in recent months, but there is no guarantee that this boom will continue once other tourist destinations return to the market after the Covid-19 crisis is over.

"It also remains to be seen what proportion of those parking in Nelson Bay are visitors who pay and, whether there is any longer- term diversion of visitors and locals to other commercial centres where there is no charge."

Mr Washington said there were questions over the level of community consultation being advocated. "The addition to the motion for continuing community consultation is most welcome, however, we believe that the consultations leading up to the roll out of Smart Parking fell short of public and business expectations.

"The decision to extend the limits to 7am -7pm was not raised during public consultations and is still a matter of contention with business interests. The large bare concrete traffic controls without any provisions for landscaped inserts are ugly."

You can learn more about the Nelson Bay Strategy here.

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