COUNCILLORS have now deferred two Ellerton Drive Extension (EDE) funding items in two months after pushing back a request from Council planners at their Wednesday night meeting for Council to enter into a bank loan worth $25 million or more to fund the EDE on behalf of developers CIC Australia and Mirvac.
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The report from Council's city infrastructure manager Phil Hansen before Councillors listed the current cost estimate for the link road at $75 million, with $50 million of that already secured in federal and state government funding.
"Without any further grant funding, the developer component of the EDE is estimated at [the outstanding] $25m," the report stated.
The report also noted that since 2009, Council had "progressed the construction of the (EDE) and has successfully lobbied for substantial grant funding towards this project. In addition to the grant funding, Council has also arranged for the outstanding cost to deliver this project to be fully funded from developers."
However a council spokesperson told The Queanbeyan Age this week that Council would need to hold a bank loan to pay the developers' share of the road, with the loan repayments and interest to be repaid in full by the developers. This arrangement enabled the road funding to be procured up front, the spokesperson said.
"Under Section 94 of the Local Government Act, Council can charge developers for the cost of providing infrastructure that is required to service their developments. The way Council does this is by charging the developer at the time that the lots within their development are released," the spokesperson said.
"In the case of the Googong development, lots will be released over a 20 year period and it follows that Council will not be able to collect the full amount required from the developer until the last lot is released in 20 years' time.
"Notwithstanding this, there is always the need to provide the particular infrastructure item before all of the money has been collected from the developer. To permit this to occur, Councils will borrow funds to enable the infrastructure item to be constructed and then repay the loan with the contributions from the developer as they are paid over time."
However despite saying it won't have to pay anything for the EDE from its own reserves, Council has nevertheless lodged an additional grant application last month for $10 million to go towards the EDE under the Federal Government's 'National Stronger Regions Fund'. If successful, that grant money would subsidise the developer's share of the road.
Councillors deferred the item on Wednesday to gain more financial information on the loan arrangement.
Cr Brian Brown told The Queanbeyan Age this week that he was concerned it would divert an additional $17 million in developer money intended for community infrastructure (detailed in the Googong Voluntary Planning Agreement (VPA) for developer contributions) into bank interest repayments to service the loan.
The matter will be revisited in the New Year.