The Chief Executive Officer of Central Coast Council, Mr David Farmer, was not aware of a note in the council’s financial reports which said the former Gosford Council Chamber building in Mann St was to be sold on the open market.
By Jacquelene Pearson*
Note C1-7 Non-current Assets Classified as Held for Sale, on page 35 of the draft 2021-22 financial reports, said $15.7 million of non-current assets held for sale comprised of one parcel of land, the Gosford administration building and heavy machinery plant.
“These assets have been deemed excess to Council’s operational requirements and were available for sale and actively marketed as at 30 June 2022,” the note to the draft financial reports said. “The assets will be sold on the open market with one parcel of land being sold in July 2022. The remaining non-current assets are expected to be settled during the financial year ended 30 June 2023.”
One of the factors that may have contributed to the 2020 ‘financial crisis’ at Central Coast Council was a failure to notice a change to an accounting practice that was a note to the 2016 financial reports.
Note C1-7 in the most recent draft financial statements, which Administrator Hart has approved to send to the Audit Office, stood out because it contradicted earlier public statements about transferring the land to the State Government to move Gosford TAFE and develop affordable housing.
In a recent interview with The Point, Mr Farmer said: “I will have to have a look at that note.”
“That is what it was originally going to be… but it is going to be a TAFE and we are in advanced discussions with the NSW Government about acquiring that site for a vertical TAFE.”
Mr Farmer said progress had been made on the plans for the former Gosford Council building to become a new vertical TAFE in the past week. “They are very optimistic and their plans are quite ambitious,” he said.
The Point sent the note to the most recent accounts, relating to Gosford Chamber being sold on the open market, to Council’s media unit for clarification, following the interview with Mr Farmer.
Council returned the following written response: “In relation to the former Gosford Chambers site, Council has a non-binding Memorandum of Understanding (MoU) for sale with Landcom. Council will amend the notes to the accounts to clarify that.”
Parliamentary Secretary for the Central Coast, Mr Adam Crouch, and the then Minister for Skills and Tertiary Education, Mr Geoff Lee, announced the plan to move the existing Gosford TAFE campus to Mann St to make way for a ‘new, TAFE and extensive ‘affordable housing’ in December 2021.
At that time the total project was estimated to cost around $100 million.
A major impediment to the completion of that MoU is that some of the land is classified as community which means it cannot be sold under the Local Government Act 1993.
The following blocks cannot be sold without first being reclassified from “community” to “operational” land: 73 Mann Street Gosford (Lot B in DP 321076) and 75 Mann Street Gosford (Lot 2 in DP 543135).
Local independent journalist Merilyn Vale broke the news on Central Coast Council Watch in March that Council went to the Local Planning Panel for advice on changing the classification of those lots from community to operational land.
“There was no public announcement that the panel was asked to consider the matter. It only shows up in the minutes from the latest LPP meeting and you have to know the background to understand what is being asked of the LPP: there is no explanation of what the “reclassification” means for residents,” Ms Vale reported at the time.
“But community panel member Geoff Mitchell spoke up about it. He said the process should not be initiated until the public is fully aware of the implications. But his view was a dissenting one and the panel by majority noted the opportunities for community consultation would come. The panel said it limited its role to providing advice only to the council,” CC Council Watch reported.
Following receipt of the LPP’s advice, Central Coast Council lodged a planning proposal to amend the Precincts/Regional State Environmental Planning Policy (SEPP) 2021 (formerly known as the Gosford City Centre SEPP 2018) to allow the land to be reclassified from community to operational.
Planning proposals usually deal with rezoning land to change its permitted land uses, from recreational to commercial, for instance. This planning proposal seeks to reclassify the site from ‘community’ to ‘operational’ land, not to amend its current B3 Commercial Core zoning or applicable development controls.
The planning proposal was given conditional Gateway approval from NSW Planning on September 29 based on a letter to council from Dan Simpkins, NSW Planning’s Director, Central Coast and Hunter Region for Planning and Land Use Strategy.
The Mann St land (in addition to the council chamber and Broadway Hotel) was compulsorily acquired by Central Coast Council in 2019 for the proposed regional library and performing arts precinct.
Later that year the council resolved to retain the regional library (no to be built in Donnison St) but withdraw from the cultural precinct. In April 2020 Council decided the Mann St property was surplus to its needs but the land couldn’t be sold until it was reclassified as operational.
The NSW Planning and Assessment Gateway Determination Report stated that the planning proposal wasn’t the result of any strategic study or report.
“It is in response to Council’s review of assets in 2020, which identified that the two properties are no longer required. Under Section 45(1) of the Local Government Act 1993 Council cannot dispose of community land. The planning proposal is considered to be the best way to achieve this outcome.”
Mr Simpkins also waved through inconsistencies in the planning proposal including “applicable directions of the Minister under section 9.1 of the Act 4.1 Flooding and 4.5 Acid Sulfate Soils”.
“Council will need to obtain the agreement of the Secretary to comply with the requirements of section 9.1 Ministerial direction 5.2 Reserving Land for Public Purposes. Council should ensure this occurs prior to the final plan being made,” Mr Simpkins’ letter to Council said.
“The Department’s ‘Practice Note PN 19-001 Classification and reclassification of public land through a local environmental plan’ states all planning proposals classifying or reclassifying public land must address a number of matters for Gateway consideration,” it said.
According to NSW planning that directive means Council needs to address “current or proposed business dealings – for example, any agreements for the sale or lease of the land, the basic details of any such agreement and if relevant, when council intends to realise its asset, either immediately after rezoning/reclassification or at a later time.
“The Practice Note also requires the planning proposal to state how Council may or will benefit financially, and how these funds will be used, along with how Council will ensure funds remain available to fund proposed open space sites or improvements referred to in justifying the reclassification.
“It is not completely clear from the planning proposal that there remains a commitment to providing a performing arts centre, or the funds from a sale would be used for this purpose.
“The language used in the planning proposal does not preclude this outcome, but it also neither confirms this outcome.”
Council was not permitted to be the local plan-making authority because the proposal applied to council-owned land.
Changes to the Local Environmental Plan (LEP) will need to be finalised on or before 08 December 2023, which means Council will need to “commence the exhibition of the planning proposal as soon as possible” and ask NSW Planning and Environment to draft and finalise the LEP amendments in October.
The Minister can appoint an alternate planning proposal authority if Council does not meet these timeframes.
Community consultation is a requirement if the council wishes to use the planning proposal to reclassify the land and enable its sale. The Gateway Determination Report said: “In accordance with Schedule 1 Clause 4 of the Environmental Planning and Assessment Act 1979, the planning proposal is to be exhibited for 28 days. A public hearing is required under Section 29 of the Local Government Act 1993 in accordance with the Local Environmental Plan Making Guidelines (Department of Planning and Environment, 2021).”
The Central Coast Community Environment Centre (CEN)* has asked Council’s Administrator, Mr Rik Hart, to proactively release the details used to justify the sale of every asset that has been placed on the market or sold since April 2021.
“The financial crisis is over at Central Coast Council but Administrator Rik Hart has told CEN that he thinks it is appropriate to keep selling our assets,” said CEN Chair, Mr Gary Chestnut. “I know this because I recently wrote to Mr Hart, to ask him to stop any further sales.”
According to CEN, Central Coast Council has no financial justification for continuing to “flog off” assets.
“My letter to Administrator Hart included two ‘asks’. The first was to withdraw unsold assets from the market. The second was to ensure that any future property sales adhered to the Council’s own Land Transactions Policy (LTP),” Mr Chestnut said.
“Mr Hart believes the asset sales should continue – here is some of what he said in his response to my letter: ‘…I am supportive of continuing with the disposal of land under the current asset sales program and in accordance with previous resolutions of Council…Land and property assets are only considered for sale if they are surplus to Council’s current and future needs. The identification and disposal process is undertaken in accordance with relevant Council policies, including clause 12 of Council’s Land Transaction Policy…’ (Rik Hart, 21 Sep 2022)
Clause 12 of the LTP does state that the council has to prepare a business case, land transaction plan and financial impact analysis assessing the strategic value of the land having regard to need, the geographic context, environmental values and applicable strategic plans. Breaches of the LTP are to be treated as breaches of the Council’s Code of Conduct.
“If Mr Hart thinks it is appropriate to keep selling assets, it should also be appropriate for Council to proactively release to the public the full detail required under Clause 12 of the LTP for each council property that remains on the market and for each of the properties that has been sold since April 2021.
“Environmental land at Doyalson has been sold for substantially less than its ecological value. Land at Warnervale has been sold for substantially less than its commercial value. Perhaps those costly blunders could be excused because the sales were seen as urgent.
“That is no longer the case. For example, the ratepayers of the former Gosford City Council who made contributions for decades to build a regional library in Mann St, and who have been repeatedly promised a performing arts centre in the city’s heart, must surely be entitled to proof that the Council is adhering to its own LTP in selling off the Gosford Council Chamber and substantial nearby lots in Mann St.
“How can a Council Chambers in the region’s ‘principal city’ and land for a performing arts centre be considered ‘surplus to Council’s current and future needs’?
“Section 8A of the NSW Local Government Act sets out guiding principles for councils. It says councils should carry out functions in a way that provides the best possible value for residents and ratepayers; should manage lands and other assets so that current and future local community needs can be met in an affordable way; should consider the long-term and cumulative effects of actions on future generations; should consider the principles of ecologically sustainable development; and that decision-making should be transparent.
“In relation to Mr Hart’s decision to continue to sell assets, CEN believes Central Coast Council has abandoned the above principles and this needs to be addressed with an act of good faith by disclosing in full how each asset sale or proposed sale meets the requirements of Clause 12 of the council’s own LPT. “Council assets are the community’s assets and, as such, we have a right to see Council’s full justification for each and every sale,” Mr Chestnut said.
Crisis is over
At the September Council meeting Mr Farmer highlighted that staff were presenting “a set of statements to audit that show a surplus” which represented a net turnaround of $118 million over the year.
“This result has been the product of the hard work of many people in Council, operating with 25 per cent less staff and significantly less other resources,” Mr Farmer said.
Mr Farmer said Central Coast Council was now operating in a financially stable manner and can use some of surplus to escalate the repayment of loans, and improve roads and planning and DA assessment.
A report to the October meeting will formally consider using part of surplus to escalate repayment of emergency debts.
Before resolving to accept the draft financial reports as ready for referral to the NSW Audit Office, Administration Hart said: “Well I guess what a difference 12 months makes. I think the organization has performed exceptionally well” he said in relation to maintaining financial discipline and managing COVID and severe weather events.
“I really do believe the actual financial crisis component is over but we still have quite a lot of work to do to restore service levels,” Mr Hart said.
WHAT YOU CAN DO
Council has not announced that it received a Gateway Determination for this planning proposal, so it is unclear when the public exhibition is likely to commence. If the timeframe outlined above is to be met it will have to be soon.
If you would like to follow the progress of this matter or be involved in the consultation by writing a submission there are two websites you will need to follow.
The first is the NSW Government’s planning portal. This link goes directly to the matter of the Mann St land but there are other planning propsals making their way through the gateway process you may like to take a look at.
Planning proposals move through stages and this one is currently at the pre-exhibition stage. Once it moves to the exhibition stage Central Coast Council should call for submissions and announce the public hearing date.
The consultation may also take place on www.yourvoiceourcoast.com.au but this is not clear as Central Coast Council has not been permitted to act as the local plan making authority.
*Jacquelene Pearson is a casual employee of the Central Coast Community Environment Centre where she works as a community support officer.