Unanimous decisions to guide way forward

While the decision at Council’s Extraordinary Meeting on 28 February not to include the Terralong St ILUs in the sale of Blue Haven was the focus of attention for many, a number of other pivotal decisions were made unanimously to help Council meet its Performance Improvement Order (PIO) from the Office of Local Government and restore its financial viability.

“Those decisions weren’t taken lightly or off-the-cuff,” says Mayor Neil Reilly.

“Everything was questioned and everything was debated. However once that debate was over, and minor and major amendments made, all were unanimous decisions of Council.

“I commend the Councillors and Council staff for their vital contributions to the Meeting. I am pleased that we reached a consensus, with some give-and-take from all sides. Tough decisions were made, the outcomes of which have given us a solid path forward towards a sustainable future for our Council and our Municipality.

“The community knows we have wrestled with the issues around our finances and Blue Haven since we were sworn into office back in January 2022. Debates have swung back and forth many times because of the significance of these decisions.

“I’ve been speaking all year about the need for compro- mise and for us to work as a team. This all came together and I’m proud of what we achieved.”

The decisions, most of which reinforce the need for further asset sales, included:

• accepting the two year cash flow forecasts, which show that “further asset divestment to clear the full TCorp debt and also leave KMC a respectable unrestricted funds position at June 2024 is required.”

Amongst other things, the report says further asset divestments are needed as the sale of Blue Haven Bonaira is expected to result in a net cash injection of just $20 to $25 million, possibly by late 2023, as well as a reduction in current liabilities of $72 million. Capital works expenditure has also been reduced by $5 million for both 2023 and 2024, and operational efficiencies are needed.

• accepting the Liquidity Plan, which the business paper says, “illustrates, subject to property sales being realised at the values and within the timeframes anticipated, that the concerns with Council’s ability to clear its debts, replenish reserves and build working capital to meet its regular outgoings, may be eased.

Council has already identified several reserves

(restricted funds) to be replenished, such as Employee Leave Entitlements and property.”

• approving talks to begin on the early repayment of $30 million of the $45 million debt owned to TCorp, as part of renegotiating another loan for the remaining $15 million if necessary. Full payment currently due August 2023.

• approving the Property Plan, after stressing the importance of considering other factors rather than just financial in deciding whether to refurbish, repurpose, redevelop or dispose of. The Plan lists 29 Council properties and five Crown Reserve properties it manages, with some of the properties already in the process of being sold.

• deciding on the distribution of the net proceeds of $27.5 million from sale of Akuna Street, including making $1 million available for TCorp loan repayment; topping up the prudential balances needed to be held for the

RADS and ILU deposits by $4.6 million (required by the PIO); adding $2.5 million to the Employee Leave Entitlement reserves (required by the PIO) and $8.4 million to the Land Development restricted reserve; and injecting $11 million into operational cash. continued on p10