Many Projects At Risk Over Funding Plan, Councils Warn

Sydney Morning Herald

Monday February 4, 2008

Wendy Frew Urban Affairs Editor

PROJECTS as diverse as a planned upgrade of North Sydney's business district, an aquatic centre on the Central Coast and a $45 million bridge at Dapto may fall through if constraints are placed on local government's ability to raise funds, councils have warned.

Attacked last week by the State Government and the property industry for "hoarding" almost $1.3 billion in money raised from developers, some councils have already suspended projects because of the Government's plan to cut the funding.

The levies, known as section 94 contributions, are raised and spent by councils on facilities such as roads, libraries, parks and pools. Rate pegging by the Government limits councils' ability to raise funds from residents.

The Government says the developer levies should be used only on infrastructure and services directly needed by people living in a new development, not projects that benefit the wider public.

But that would mean important council projects such as the conversion of a five-hectare coal loader site on Balls Head Road into parkland and a planned North Sydney central business district upgrade would not go ahead, said the Mayor of North Sydney and joint president of the Local Government and Shires Associations, Genia McCaffery.

Cr McCaffery said it could take years to gather the funds for something like the $13 million extension of North Sydney Olympic Pool in 2001, or the recent upgrade of Stanton Library.

Wyong's mayor, Warren Welham, a Labor councillor, said the changes could jeopardise the construction of the Wyong Performing Arts Centre, and a $40 million aquatic centre and sporting fields planned for Warnervale.

"This will hit hard those regional councils such as Wyong with lots of greenfield developments still on their books," he told local media.

Wollongong City Council has scrapped the tendering process for the long-awaited Fowlers Road bridge, part of a network of roads known as the West Dapto Transport Link, because of doubts about raising the funds from developers.

An analysis of money held by councils in greater Sydney showed more than half of the unspent funds was held by just 10 councils, the NSW executive director of the Property Council of Australia, Ken Morrison, said.

"We all know councils are resource-constrained, but hoarding money and hiking levies on new housing is not the answer," Mr Morrison said.

The Mayor of Blacktown, Leo Kelly, a Labor councillor, said councils should not be judged by their bank balances. For example, his council had $61 million in developer funds but council's 2008 budget showed it had been set aside for land Blacktown was negotiating to buy for parks or was earmarked for upcoming projects.

"[Developer levies] encourage the private sector to invest in the local area but these clowns [the State Government] see this as a chance to milk the councils to shore up Treasury coffers ... it is really disgraceful," Cr Kelly said.

© 2008 Sydney Morning Herald

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