Cash stash: councils’ $111 million booty

HUNTER councils are sitting on a $111million pile of cash that is barely being used, despite complaints  they don’t have enough money.

The money comes from developers, who must pay it to councils under state laws that require them to contribute to infrastructure in the areas they develop.

But strict rules around the way the money can be used prevents councils  spending it on infrastructure that is urgently needed.

Despite the five Lower Hunter councils having a booty of $111million,  only $15million was spent last financial year, council documents show.

News of the  cash stash comes as  Lake Macquarie City Council general manager Brian Bell  lobbies to continuously increase rates above state government rate caps.

Lake Macquarie council has  $52.3million in its kitty from developer contributions, up  from $33.6million  five years ago.

The  council spent just  $2.5million from the fund last financial year, but received  $5.5million.

It made an additional $2.4million in interest.

Cr Robert Denton said the council should be able to use some of the money for urgent works. He  said intersections at Northlakes Drive and Minmi Road, Cameron Park, and Bayview Street and Warners Bay Road, Warners Bay, desperately needed upgrading.

He could understand councils wanting to save money for projects to meet future demand but suggested urgent work could receive some treatment now.

‘‘I’m not saying ‘let’s blow $100million’,’’ Cr Denton said. ‘‘But if you had $100,000 sitting in the bank and your bathroom was falling apart, it’d be a brave man to deny the wife a new bathroom.’’

A NSW Department of Planning spokesman said the government had ‘‘identified infrastructure funding and delivery as one of the key areas that needs reform in its review of the NSW planning system’’.

‘‘It is vitally important that the money collected for infrastructure, by a local council or the state government, is spent efficiently and effectively,’’ the spokesman said.

Council officials say the rules for developer contributions, known as Section 94 funds, are too complex and restrictive.

The release of money is triggered as developments  progress.

Maitland City Council has the region’s second highest Section 94 kitty, worth $29.6million.

Maitland council spent $3.4million from the kitty last financial year and received $10.8million, plus  $1.7million in interest.

Maitland City Council finance manager Phil Freeman said state government rules stipulated that in some cases councils could not totally fund roadworks from  Section 94 funds.

And, for example,  if only 25per cent of a road upgrade  could come from the Section 94 fund,  the council had to  find the rest of the money from its general revenue.

The rules also state that Section 94  money can  be spent only on new capital works, not maintenance.


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