11 September 2024

NSW Government questions Yass Council's financial competence

| Sally Hopman
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Man digging spade into area marked off with danger tape.

Yass Valley Mayor Allan McGrath turns the first sod in the $50 million Crago Mill development in the town’s centre in July. Photos: Sally Hopman.

The NSW Office of Local Government (OLG) had “serious concerns” about the financial competence of the Yass Valley Council (YVC), documents sought by a ratepayer under freedom of information (FOI) laws show.

Binalong ratepayer, Luke McAlary said he had spent the past 18 months trying to find answers to questions about financial decisions made by the YVC, particularly its ability to repay a $50 million loan taken out to fund its Crago Mill project – a new council administrative building in town along with a library and other facilities.

Documents showed the OLG “had concerns that in discussions with council they do not seem to fully appreciate the potential seriousness of their situation and are progressing the Crago Mills project without due financial diligence or a guaranteed source of funding to repay the substantial loan they have secured to deliver it”.

Mr McAlary described the situation as like “a bus going off a cliff” yet whenever he broached the issue with the council, “they were either indifferent or hostile” to criticism.

The situation was further exacerbated by community concern over why that amount of money was borrowed to build a new council chambers when the town’s water treatment plant was antiquated and barely fit for purpose, regularly delivering brown smelly tap water to Yass Valley homes. It has been estimated that to remedy the Yass water problem would cost in excess of $30 million.

READ ALSO Council finances and town water tipped to top Yass voters’ concerns as poll looms

In communication with the YVC as recently as June this year, the OLG wrote that it was “seriously looking at taking action”.

Asking how serious its cash situation was, the council said it was “working on an improvement plan including a freeze on starting new projects, and a special rates variation in 2025-26” – that is, a rate rise.

The OLG then asked whether the YVC would have a problem finding cash for ongoing operations and asked “whether there was any immediate risk to meeting payroll and essential payments”. Council’s response was that its financial consultants “had assured them they would not need to dip into reserves”.

It is understood that the YVC has not had a chief financial officer since January.

Acting CEO of YVC, Lynette Safranak, responding to questions put to her by Region, said the OLG had not issued council with any warnings regarding the Crago Mill Project.

She said the YVC “was committed to ensuring the financial sustainability of the Crago Mill redevelopment and would continue to work closely with all relevant stakeholders to ensure the project was delivered successfully”.

She said the OLG advised councillors that they were “concerned but not alarmed” about YVC’s financial situation.

“There was no direct question regarding our ability to meet payroll or essential payments, nor was there any comment about ‘seriously looking at taking action.'”

Architect drawing

An artist’s impression of the proposed Crago Mill Precinct in the centre of Yass. Photo: Brewster Hjorth Architects.

Asked about the need for a special rate variation from 2025-2026, she said it had been discussed with councillors previously, “but no specific rate increase has been determined at this stage”.

YVC Greens Councillor Adrian Cameron, who said he voted for the Crago Mill project initially, said alarm bells had since gone off, believing councillors had not been given all the financial information required at the time.

“I and the other councillors had not been given reasons to be alarmed by council’s finances,” he said. “However the documents released under FOI laws seem to indicate that we should be worried.”

Councillor Cameron’s colleague in the local government elections this Saturday, Tanya Cullen, said: “It’s deeply disappointing that the Yass Valley community has been kept uninformed of the OLG’s concerns about council’s financial position – and that eight of nine councillors asked no questions about the financial realities of borrowing $50 million.”

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cannedbeeria9:42 pm 12 Sep 24

Hmmm. YV voters, your future is in your hands. Think about that this weekend.

Does anything look more ridiculous than a local worthy or worthies in suits holding a brand-new shovel pretending to do what the real workers do.

funny how the Mayor (Alan McGrath) and the Deputy Mayor (Cayla Pothan) have been VERY quiet about the disastrous rent increases coming to all Yass Valley residents because of the Crago Mill project. Lack of transparency seems to be part of the culture at Yass Valley Council

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