OPINION: Decision to shelve section 94 fees ‘curious’

LAST month the Herald reported Port Stephens Council had waived $30,000 of section 94 charges for Curves Gym in Nelson Bay.  Staff had recommended waiving part of the fee, down from $75,642 to $46,857.

Section 94 charges are levied on developers at the application stage to help pay for community facilities and/or infrastructure. 

The report said the gym’s owner had argued the business ‘‘does not generate profits that would permit the payment of section 94 contributions” and that the development did not require the amount of parking usually required of gyms because of its small operation.

Despite some councillors’ concerns about setting a precedent, the waiver was passed.

I believe this decision is unsafe.  It looks a bit like the council regards public funds as some sort of councillors’ personal play money. And it puts a cloud over staff impartiality.

My opinion is founded on local government studies, qualification and experience in the 1970s, ’80s and ’90s, which included three years as the chairman of the Port Stephens Council’s development assessment panel.

From that ‘‘old school’’ perspective, what I see is this.

 The action of the staff to support the waiving of the $30,000 is curious. To start, it suggests policy shortcomings and gaps.  Does the section 94 charges policy fail to foresee a situation in which the extra $30,000 charge would not make sense?  In that case, the correct action, I’d have thought, would be to change the section 94 policy, not invite the councillors to randomly overrule it. 

That the council’s planning staff were not prepared to defend the section 94 charge but instead support the applicant’s arguments is also curious. Profitability is not a planning consideration when assessing a development application.  With all due respect, that’s not their field.  Wearing two hats – a professional planner’s and a business facilitator’s – is, I’d have thought, a conflict of interest.  

Perhaps most worryingly, there’s no sign of internal governance scrutiny with the result that scant regard seems to have been paid to protecting the public interest over private benefit.

Short of changing the section 94 policy, the correct course, I suggest, would have been to condition the consent to give the developer, say, five years to pay the $30,000, secured by a bank guarantee in favour of the council. And/or the council could have directed the developer to seek a $30,000 grant under the council’s donations policy.

Either way, the section 94 works and services would have been funded as intended. And the public would have had a say before the council doled out ratepayer funds to a private individual or business.

I recall a Division of Local Government report a few years back talked about the dangers of ad hoc council decisions and the importance of staff being able to give frank and fearless advice.

In the case of the gym development application, it seems the council at large saw the section 94 policy, the law, strong financial management, sound governance and  the department of local government’s advice  not as parameters, but as things to be ignored or worked around.

To my mind at least, that is a recipe for maladministration and  mismanagement of the public purse and,  ultimately and potentially, corruption.

Rod Stanton worked for Port Stephens Council from 1974 to 2006 in a range of administration and public communications positions.