Council sticks to its guns over fleet leasing plan
CLARENCE Valley Council has voted to keep a proposal to lease its light and heavy fleet despite a report showing it could put the council $20 million further into debt.
Included as a late item of business for Tuesday's council meeting, Cr Richie Williamson's rescision motion for part of a council resolution from November last year, was emphatically voted down, 6-2.
Cr Williamson's motion aimed to remove part of the resolution from an extraordinary council meeting on November 30, which called for the council to cease buying light and heavy fleet and begin leasing it.
This was part of an overall plan put forward by Cr Andrew Baker to meet the NSW Government's Fit for the Future guidelines to repair the council's budget, without seeking a special rate rise.
His resolution also called for a report to come to council and consultants AEC Group provided the council with a document which showed externally financing fleet acquisition would add $20 million to its debt and increase its operating expenditure by around $2 million a year.
It was the magnitude of these figures, which he learned about last week, that prompted Cr Williamson to convince deputy mayor Cr Jason Kingsley and Cr Greg Clancy to co-sign a rescission motion on Friday to remove the external financing elements from the November resolution.
There were some sharp exchanges with Cr Karen Toms, who questioned the legitimacy of the motion.
She argued that act of including the rescission motion in the agenda was against the council's Code of Meeting Practice.
Cr Toms also questioned the timing of it.
"It came to my attention that is was signed after the committee meeting last Tuesday," Cr Toms said.
Cr Williamson's reply was hot.
"I categorically and emphatically deny that lie," he said.
Mayor Jim Simmons settled things down and councillors voted to accept the motion onto the agenda.
Cr Greg Clancy, whose signature was on the rescission motion, attempted to amend the motion, Cr Simmons ruled it out of order.
In debate Cr Williamson explained how the consultant's report convinced him the council needed to avoid the extra costs leasing fleet items would cause.
"Our aim should be to improve our overall financial position," he said.
"From the evidence I've seen the opposite effect could be at play.
"The evidence I've seen makes it worse. The negative effects could increase debt by $20 million at a time when the council is endeavouring to reduce debt."
He said the leasing costs would also add between $2 million and $4 million a year to the operating expenditure."
"There's not one option in the leasing framework that improves council's position," he said.
Cr Baker disagreed with Cr Williamson's reading of the figures, saying he was only reading the headline figures. He said the consultants who had prepared the report didn't have access to the right information.
"I've seen that report and it's a crock," he said. "We should send it back to them so they can have another go when they're fully informed."
- BAKER'S DELIGHT: The radical plan that swayed council's vote
- 8-point plan to fix council's debt-ridden finances
Cr Baker said the council needed to accept the full resolution on November 30 because it was an integrated plan.
"There will be time for amendments when the full figures come in," he said. "There's nothing here that makes the money disappear.
"We've not agreed to any spending of our fleet reserve yet. The fleet reserve remains there until we get the information we need.
"If the information suggests something negative to council's position, I will beat Cr Williamson to the line to sign the rescission motion."
Cr Karen Toms supported Cr Baker, while the deputy mayor spoke in favour of Cr Williamson's position.
Cr Simmons said his personal view was against leasing as council was not taxed, so there were no tax advantages to be gained.
He said it would be better for the council financially to have a mix of external finance and paying cash for plant.
In his right of reply Cr Williamson said Cr Baker's proposal, while genuine, would have disastrous effects on the council's finances.
He said the additional leasing costs would go on top of the council's current $17.7 million operating deficit, driving it to an annual deficit of $20 million.
"The November resolution was genuine, but it doesn't stack up," he said.
The voting on the motion was Crs Williams and Kingsley for; Crs Baker, Toms, Clancy, Simmons, Peter Ellem and Debrah Novak against.