June 3, 2015
A decision to declare Memerambi Estate a “benefitted area” which was taken at the South Burnett Regional Council’s June 3 meeting provoked heated debate.
A motion to draw down a $2.1 million Treasury loan so work could begin on building missing infrastructure to make the Estate habitable split the Council 4-3.
Crs Tessmann, Duff and Green opposed the benefitted area proposal, arguing that it posed risks to ratepayers and was unfair to two property owners in nearby King Street who would also face a “benefitted area” charge because new roads to be built in the Estate would pass the rear of their properties.
However Crs Campbell, Heit and Palmer – and ultimately Mayor Wayne Kratzmann – argued they thought the risk to ratepayers in the arrangement was slight to nil; that “doing nothing” was not a real option; and that while it was unfair some property owners who were not part of the Estate would be asked to pay part of the costs of fixing it, a decision to press ahead was in the best interests of the Estate’s property owners, the village of Memerambi and the region as a whole.
Because Memerambi Estate has blighted the region for more than four years and because there has been enormous general interest in the matter, we are publishing this detailed report on the debate for the benefit of readers who would like a deeper insight into the factors individual Councillors considered when arriving at today’s decision.
We are also republishing the full responses of Crs Tessmann, Campbell and Heit, who spoke from prepared speeches at the debate, in PDF format.
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The Arguments Against
Cr Damien Tessmann said he was against making the Estate a benefitted area for two reasons: the financial risk the loan posed to ratepayers, and the burden the arrangement would place on some property owners in nearby King Street.
Cr Tessmann said he’d consulted widely with local real estate agents, Kingaroy bank managers, builders and valuers to get their views about how likely it would be that the Council could resell any properties on the Estate if existing owners defaulted on the deal in order to assess the real risk to ratepayers the benefitted area agreement posed.
He felt that in the current market, it was highly unlikely the Council would be able to recoup the $30,000 that would be owing on any of the 20 vacant blocks on the Estate if the current owners defaulted on the deal.
He suggested this would put at least $600,000 of the $2.1 million loan “at risk”.
Cr Tessmann conceded it was likely the Council could recoup its money from lots with houses on them, but warned that even then potential new owners would still have to spend $50,000 to $70,000 to bring the properties up to a habitable standard.
Cr Tessmann said he was also concerned that some owners in nearby King Street who had purchased their properties before the Estate was developed would now be hit with the $30,000 per lot charge because the rear of their properties will back onto the newly created Prince Street or Earl Street.
“I have had personal contact with one owner who purchased her house with her husband in 2005, well before the developer for the Memerambi Estate acquired the 80 acres in question that was already subdivided in 1908,” Cr Tessmann said.
“This current ratepayer faces … a $60 000 bill for the two back blocks that she has currently, which when combined with the two front blocks make up her acre block. That is $60 000 for something she already owns and can get access to via the current road reserve.
“I did not join this Council to send people broke, certainly not because of the actions of others trying to make a quick dollar in investment properties that have now gone wrong.”
Cr Tessmann was also withering about the “litigious group” of property owners who had taken the Council to court.
“It is not lost on me that there were somewhere around 30 property owners tied in with Members Alliance that took legal action against Council, surmising that Council was to blame for this situation,” Cr Tessmann said.
“This court case has already cost the ratepayers of the South Burnett money defending Council. As far as I am concerned this Council is owed something by those who brought about a failed court case in the Planning and Environment Court.
“The proposal as it stands today is designed to assist these owners of the Estate, almost all whom do not live in the South Burnett.
“I can live with Council bending over backwards to help ungrateful property owners that do not live here to see this place sorted.
“What I cannot live with is sending a young family and others to the point of almost bankruptcy because of legal requirements for them to be included in this area because – in the eyes of the law – they receive a ‘benefit’ from this benefited area.”
- Full text of Cr Tessmann’s speech
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Cr Kathy Duff said she agreed with Cr Tessmann’s arguments.
“As a ratepayer and especially as a Councillor, it is an unpleasant exercise to drive past the wasted, uncompleted Memerambi development several times a week with its weeds and grass growing to waist height,” Cr Duff said.
“It is particularly frustrating the Council could do little to stop the current situation and I hope the public clearly understands two points: firstly, that Memerambi was an existing but dormant subdivision created decades ago so Council couldn’t condition residential development on it; and secondly, Council is not at fault when a development goes bust prior to completion. There are dozens of these types of developments around Queensland.
“I would like to see a solution where funds are found to complete the development so that in the long term Memerambi grows into an affordable and pleasant place to live, adding to the diversity of housing options in the South Burnett region.”
Cr Duff said she was opposing the motion because she had concerns about how watertight the “benefitted area” agreement was.
“I am not satisfied we have done our homework thoroughly enough. I need more assurance that the whole group (of property owners) are on board and that we can move confidently forward with everyone on the same page for the good of the region.”
Cr Duff said while 30 out of the 39 “litigous owners” had signed an agreement, the remainder had only been notified of the offer and had not been given the opportunity to sign anything.
She said she didn’t think this was a secure enough arrangement to risk ratepayers’ money on a $2 million loan.
“I think if we asked ratepayers would they like us to borrow funds to fix a problem that is not really their responsibility with no assurance that all of the funds would be redeemed, or would they prefer us to take more time to ensure that if the money is borrowed then it is guaranteed to be paid back in a timely fashion, I believe they would choose the second option.”
Cr Duff said she also agreed with Cr Tessmann that it was unfair that residents who were not part of the development were being roped into the benefitted area levy because they had properties which would back onto newly created roads in the Estate.
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Cr Barry Green said he had wrestled with his decision on the “benefitted area” arrangement for a very long time.
In the end, he said the inclusion of several King Street ratepayers in the benefitted area was the main thing that pushed him to vote against the proposal.
“This is the biggest injustice I’ve seen in 68 years,” the 68-year-old Councillor said.
“I have grave reservations about lots being included in the benefitted area that were not part of the Estate, so in all good conscience I really cannot support this.”
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The Arguments In Favour
Crs Campbell, Palmer and Heit took opposite views.
Cr Campbell said he felt the arrangement with Estate owners was watertight enough, given that almost 79 per cent of the “litigious owners” had signed an agreement to waive further legal action against Council, and 94 per cent of the “non litigious” group had raised no concerns or objections about the Council’s offer.
“In the end, if any owner defaults Council will acquire ownership of their property, and I think that we stand a reasonable chance of recouping our funds on the open market.”
“I’ve done my own independent assessments with real estate agents and builders who would mostly agree that if these properties came on the market and sold for low prices, there would be no difficulty in selling them.
“Investors love bargains and it’s amazing where the money comes from at times.”
Cr Campbell also warned that doing nothing was not a real option. It would either result in more lawsuits, or the Estate remaining an eyesore for many years until it eventually had to be bulldozed. And in both cases, ratepayers would bear the costs.
“We’ve been elected by our constituents to not just make the easy decisions, but to also deal with the tough ones when they come along,” Cr Campbell said.
“This is a tough one and we’ve procrastinated too long. This is a time to be courageous and act in a forthright and positive manner.”
“I will not be sidetracked by fear of financial calamity.
“Today presents an opportunity to clean up a mess and convert it into a livable community to breathe new life into the Village of Memerambi.”
- Full text of Cr Campbell’s speech
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Cr Heit agreed.
“Sadly there are no good news stories about Memerambi at the moment,” Cr Heit said.
She said the issue had been unfair on the Estate’s property owners, who’d naively trusted the developers.
It had also been unfair to Memerambi’s residents, who’d had their town blighted by the neglected estate, and to every resident who’d had to drive past it the last few years.
And it had been unfair to the Council, who’d been blamed for the Estate and had been taken to court twice to prove its innocence.
But she felt the matter had to move forward, and the Council was the only organisation which had the capacity to borrow the funds and make good on the work the developer should have done.
“Whilst it is taking a risk, I think we as council have to do this otherwise the estate will continue as is and the 73 lot owners will have to write off debts up to $300,000,” Cr Heit said.
“Some may face bankruptcy, and the South Burnett will be stuck with this eyesore.
“I think we have to take this risk and I certainly hope the Memerambi lot owners appreciate what we are doing to get them out of their difficulties.”
- Full text of Cr Heit’s speech
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Cr Deb Palmer said she agreed with Crs Campbell and Heit, and had nothing further to add to the arguments they’d both advanced.
“I feel sorry for the investors who’ve made a bad decision but I must vote yes on solving this problem,” Cr Palmer said.
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Summing Up
Mayor Wayne Kratzmann, who had stayed silent while all Councillors put their points of view, then added his voice to the debate.
“We need to stop the blame game,” the Mayor said.
“I understand the argument about the King Street properties and I am very sympathetic about the situation they’ve found themselves in through no fault of their own.
“And if this were a vacant subdivision, this would be a much easier decision for us to make.
“And I share Cr Tessmann’s concern that even if we do fix up the Estate, will this also fix the situation?
“However we were elected to fix Memerambi Estate, and doing nothing would be wrong.”
The Mayor said he thought it was best to proceed with declaring the Estate a benefitted area and if this proved to be unsuccessful, at least Council would have “had a go”.
“This is the toughest decision we’ve faced,” Mayor Kratzmann said.
“But I agree with Cr Campbell that making tough decisions in the best interests of the majority of our residents is what we’re here to do.”
The motion was then voted on, and carried 4 to 3.
- Related article: Memerambi Estate Fix Gets Green Light
Councillors Tessmann and Duff have hit all the nails on the head very squarely. Now despite their best efforts the vote is lost. Now that it is we have got to have absolute guarantees that the money is recoverable. If that is not on the table I can see some councillors with lots of egg on their faces resulting in new blood being elected next time. Frankly I am sick of the feeble excuses we continue to get when we want information.
I think the great shame here is that existing property owners facing onto King street are being punished for the stupidity of investors who believed that the great “suburb” of Kingaroy – Memerambi – was a viable investment. Let’s face it: with all the businesses that are folding it makes one wonder if even Kingaroy is a viable investment.
I would like to know what part the developer has to pay in helping with this loan. Does he get off scot free because he is “bankrupt”? Convenient. Meanwhile King street residents stand a good chance of losing their homes which they have been in for 10 years.
How is this fair? How would Mr Kratzman, Mr Campbell and others who voted yes feel if someone told Them that they had to pay $60,000 for a mistake that they had nothing to do with? And these people aren’t highly paid citizens – they are the battlers of this world. Shame on you council for including them in this debacle and punishing innocent bystanders. You may not be to blame for the problem but you will be to blame for these people, residents of this shire, losing their home.
It appears it only got the nod because of one “sheep” who contributed zero to the debate and just went with flow and didn’t want to rock the boat. A bit more backbone and it could have gone the other way.
Great to be able to read the full details of the facts of the debate on such an important community decision. Thanks southburnett.com.au.
To put it simply the greatest good to the greatest number. It has to be fixed. But having said that I am sure that council could perhaps ‘waiver’ the rates surcharge being passed onto the pre-existing property owners who back onto the estate. Personally I would think that once there is infrastructure in place the council would certainly make it’s money back. In reference to Lyn we need to instill confidence in our area. One way of doing this is fixing Memerambi so visitors (business and social) can see we are on the up. We live in a fantastic area – unfortunately sometimes we don’t realise how lucky we are.
Having been a builder for about 35 years and knowing that one always has to go through Town Planning with any new development before getting Building Approval, I would like to know how this Memerambi Estate was allowed to go ahead if the Council knew there was no provision for kerb channelled roads to be constructed as part of the project?
Surely it was obvious that the Developer had to include these?
Years ago here in Mclean Road Durong, when I bought my property in 1984, the developers told me (as I was the last purchaser) that power will be brought down the road very shortly.
In actual fact it never was. SEQEB were the electricity suppliers at the time and when I asked them when would power be brought down the road, they said it will if I give them $22,000. I was horrified. I had been conned and lied to by the Developers.
For many years I was told the same thing. Then Ergon took over. They advised me to contact all property owners and if they all agreed, it would then cost us $1000 each. I wasn’t successful, then the Wondai Council decided to subsidise the power to be brought down the road at a cost of $1500 per property.
That was a bargain, but then I had to get power brought 200m down the boundary, which was shared with my neighbour at $3500 each.
I was also told the road would be bitumen. Well 31 years later it isn’t, our rates have gone sky high, we get no services from the Council and we have a gravel road that is a disgrace.
So for all our rates from about 130 properties in the area, we can’t get the Council to grade our road once a year.
The amalgamation of the four Shires to SBRC certainly has not benefited us ratepayers on rural properties.
Finally I believe the Council is at fault for approving the development in Memerambi in the first place. Far more scrutiny at the time would have prevented the debacle that sits before us now.
I hope common sense will prevail and the residents of King Street will not be included in this financial mess.
Simon, the Memerambi development was on an “historical sub-division” created in 1908 which pre-dated the formation of Kingaroy Shire Council. This is the root cause of the problem.
The KSC Planning Scheme (which is still in force, by the way) allowed developers of historical subdivisions to build dwellings prior to putting in infrastructure. Normal subdivisions are the exact opposite: infrastructure must be put in place before dwellings can be built. This meant the Council was legally unable to prevent the Memerambi developer proceeding as they did.
There are still a number of these historical subdivisions in this region; and to prevent a Memerambi situation ever happening again, the Council asked for Ministerial approval to adopt a “Temporary Local Planning Instrument” (TLPI) which would plug this ancient planning scheme hole. It finally secured this modification to the region’s current Planning Schemes in October last year (see “Council Plugs Memerambi ‘Hole’”)
I am presently overseas and have been keeping an eye on the outcome of this situation from afar and I now see that the SBRC has voted to fix the mess at Memerambi by a split vote 4-3. Something had to be done to rectify the situation, and that is now the decision of the Council to do so, but unfortunately it appears that some of the earlier estate residents in King Street are to be included in the resolution through no fault of their own. If their houses were not part of the development by Summit View Meritor P/L ie the 53 houses that were approved on 19/1/2011 by the then SBRC, they should not be liable for the cost of the infrastructure, drainage etc.
I have read the latest Newsdesk response posted earlier tonight in particular the 2nd paragraph and noted the contents of same. As such it poses me to ask the question as to why at the General Meeting of Council on 6/4/2011 upon an Application by the said Developer (Item 7.3.6 on P8 of the Minutes) making a Request for a Negotiated Decision – Material Change of Use (Dwelling Houses) Memerambi which included an amendment to Condition GEN6 which was approved at the General Meeting on 19/1/2011, why did the Relevant Council Officer recommend to the said Meeting that Council issue the Negotiated Decision Notice on certain terms incorporating the following changes – 10 all told – with the following proviso “Prior to the commencement of any Building Work on any lot (ie the 53 previously approved allotments) the following works required to service each lot where building works are proposed to commence, shall (ie MANDATORY) be completed to the satisfaction of Council’s Director – Infrastructure.” (Refer to P8 of the SBRC Minutes of Meeting for 6/4/2011)
This amendment and the others sought by the Developer were passed by the Council 6-0 (Mayor Carter who moved the original application for approval on 19/1/2011, Councillors Campbell, Green, Tessmann, Duff and Palmer. Councillor Dalton abstained from the vote).
If the Relevant Council Officer who made the aforesaid recommendation was aware that the provisions of the KSC Planning Scheme were applicable as outlined in the Newsdesk response, then why were the 10 Mandatory requirements included in the Negotiated Decision Notice of 6/4/2011? Why didn’t the Council’s Director – Infrastructure intervene or bring the contents of the KSC Planning Scheme in regards to historical sub-divisions to the Council’s attention? Had the Council taken early action to clarify the situation and/or enforce the 10 Mandatory conditions imposed then there is little doubt in my mind that this development would not have become the mess that it has and the Developer and its builder would not have been allowed to proceed to build as many houses as it did.
This messy situation was inherited by Mayor Kratzmann when he was elected to that position unopposed in April 2012. Five of the Councillors who approved the development and subsequent Negotiated Decision Notice along with then Mayor David Carter are still current Councillors. Three of them voted against the “Benefitted Area” proposal and two them voted in favour. I think Mayor Kratzmann’s decision to vote in favour of the proposal is correct so that this ongoing mess can be finally cleaned up but with the proviso as I outlined initially, ie if any of the earlier residences in King Street, Memerambi, were not part of the original approval of 53 allotments for this development then steps should be taken to not include them in the cost of the required infrastructure etc that will be subsequently carried out by the SBRC.
Works couldn’t come quick enough! A partition to clean up the estate months ago fell on deaf ears I believe, perhaps due to the lack of access to be properties in their incomplete, and overgrown state, or financial burden already imposed upon property owners. Whatever the case, we all endure snakes, rodents, thistles and many other noxious weed seed contamination upon clean yards, via storm water run-off or carried in the wind. This alone creates control cost burdens upon existing residents without any compensation, or apparent immediate care from anyone.
Regardless, these homes having being completed eventually, they are built to minimal standards. In existing homes, inappropriate cabinet materials have been used in poorly designed wet areas, plasterboard walls are very thin and soft, where children’s bumps can be worrisome. But the biggest problems are noxious weeds, or turf laid atop heavily contaminated soils. That red dust generated by the re-initiation of housing estate works could impose further nuisance for the existing residents, and we are talking bulldozers, backhoes, graders, indeed a lot of heavy machine works, likely to have limited dust control in the back yards of these unfinished homes, at least until turf is laid, if turf is in anyone’s budget that is!
Let it also be known, that Memerambi estate does not have any socio-beneficial amenities, that children are not able to ride bicycles in the area due to the nature of roads surrounding the area. Only the upcoming rail trail offers some activity relief for them, but no park is on the agenda, nor will it be, as neighbouring towns swallow up any allocated funding, thus making Memerambi somewhat unattractive for families. Thus far, I believe the negatives out-weigh the positives when it comes to Memerambi Estate, and council really needs to step up and take responsibility for approving it. I hope to see improvements in the future, but not holding my breath for the entire area as a whole.