CONCERNED about what he sees as a possible failure of corporate governance surrounding Great Lakes Council’s acquisition of the Old School site, resident Paul Van Drunen applied for copies of related documents under the freedom of information act.
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Receiving them four months later, he remains concerned about what he sees as a lack of transparency and due diligence surrounding Council’s expenditure of $3 million of public money.
“The Council is required to do a wide range of things prior to committing public money. It has not done those things... The most basic requirement (which it has failed to do) is to determine whether the proposal will provide a net benefit to the community. Furthermore, it did this without reference to a Strategy or Plan. At the very least, the Council should have notified the community so it had a chance to make comment on the proposal,” he said.
A spokesperson for the Office of Local Government said that councils should always act in the best interests of ratepayers and the community and that they are empowered to purchase land to perform their functions and meet community needs and aspirations as set out in their publicly available community strategic plans.
“Councils are expected to undertake thorough due diligence and act with the highest integrity when making these decisions. Communities should be consulted by councils during the development of strategic plans. Any proposed development within a local government area must follow appropriate planning application and community consultation processes.”
In May last year a preliminary valuation of $2.75 million was carried out by Tew Property Consultants on behalf of Council, revealing a market valuation between $2.5 and $3 million. The valuation cited Council’s future use ‘may not be restricted to residential development but rather may include a mixed use of the total aggregated site.’
The valuation was not available in time to be included as an attachment at the council meeting, and there is no evidence it was presented at the council meeting, however both Mr Embry and Mr Handford confirmed it was tabled and that “all councillors were aware of the valuation advice prior to resolving to acquire the property.”
On the market ‘off and on’ for some time, Mr Handford said earlier asking prices were ‘somewhere over’ $4 million.
The final valuation, based on May 2014’s figures but supplied to Council only recently, confirmed the valuation between $2.5million and $3million and settled on $2.75million.
“But why did Council pay $250,000 more than it’s worth,” Mr van Drunen asked, citing the fact that a couple of the former owners had been going through well publicised financial difficulties.
Mr Embry said council assessed the site as being of value to council and the community at that price and that the financial position of the vendors was not known or considered to be relevant to the valuation.
Mr Handford added that he thought the market had changed since the block was purchased, with “increased interest in high rises” going up along the coast.