The need for an active ratepayers association

Article contributed By Allison G Walpole

The Auditor General's Report, East Gippsland Shire Council: Proposed sale of Lakes Entrance property, was tabled in the Victorian Parliament in July 2005.

This reads like a detective story. It begins with the purchase by Tambo Shire of 14.9 hectares of land overlooking the Tasman Sea at Lakes Entrance in 1982 for $150,000. Subsequently council offices were built on the site at a cost of $2.5 million and later refurbished at a cost of $600,000.

In December 1994, Tambo Shire was amalgamated with the municipalities of Bairnsdale (Shire and City), Orbost and Omeo to form the East Gippsland Shire Council. At first the new Council had administrative offices at Bairnsdale and Lakes Entrance.

Following a financial report in 1997 the council in June 2001 resolved to sell the property for $1.5 million to a private company, Lakes Village Pty. Ltd. by private treaty.

On 1st June 2001, council's real estate agent provided a professional opinion to a 3rd party on the market and values inherent in the property assuming rezoning and relevent planning permits for its redevelopment. On this basis, the real estate agent valued the property at $6.9 million.

Community unrest and a number of other offers for the property influenced the council to decide not to proceed with the private sale, but sell the property by public tender. In October 2001, the council approved the sale of the property to Lakes Village Pty Ltd for $1.525 million. Subsequently, an interested party initiated a Supreme Court action to prevent the sale.

In October 2003, the council settled the Supreme Court action at a cost of $912,000 and the contract for the sale of the property was cancelled. Appendix A to the Auditor General's report presents a chronology of key events which led to this action.

The report 1.2 Overall Audit Conclusion states:

Although the circumstances outlined in this report relate to a single council, they provide a sufficient basis for government to consider extending to local governments the requirement fo all property transactions over a threshold level to be concluded in compliance with the government's "Policy and Instructions for the purchase, compulsory aquisition and sale of land", and to overseen and approved by the Government Land Monitor.

In August 2005, the Victorian Nationals Plan for Local Government, Policy Directions Paper, addresses matters raised in the Auditor General's Easty Gippsland report. The directions paper also addresses the financial problems of Local Government including Cost Shifting from the other tiers of government.

The report and policy paper provide background information for candidates for the coming municipal elections. They also show the need for an active ratepayers association as in East Gippsland and in the Gannawarra Shire Rates Review

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Read: THE REPORT OF THE AUDITOR GENERAL ATTEMPTED SALE, EAST GIPPSLAND
Read: Ratepayers want Accountability - July 2005

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