November 25, 2020
by Dafyd Martindale
South Burnett Regional Council has voted to go ahead with a controversial expansion of the Kingaroy Transformation Project despite fears of a budget blowout.
Wednesday’s Council meeting heard fears the South Burnett could end up in the same position as Gympie Regional Council – which has had to borrow money to pay wages – if the project runs into the red.
The estimated cost of the Kingaroy Transformation project (KTP) – originally projected as $8 million in 2017 and then $11.1 million earlier this year – has now hit $13.9 million despite the fact the first sod has not yet been turned.
The latest figure is made up of a $4.5 million contribution from the Federal Government’s Building Better Regions Fund, $2.3 million in contributions from the Department Of Transport and Main Roads and Ergon for infrastructure upgrades, and $7.1 million from Council.
However, it emerged on Wednesday that final agreements with DTMR and Ergon have not been locked in and ratepayers could be left to pick up a large tab if Council’s engineers discovered the town’s underground infrastructure was in a worse condition than expected.
Councillors were asked to vote on a four-part motion:
That Council
- Adopt the design in principle for construction as presented,
- Approve the project and the proposed budget at $13.6 million, with the additional budget to be allocated from additional funding sources or restricted cash, with any budget amendments to be approved through the quarterly review process,
- Delegate to the CEO to negotiate infrastructure contributions from other agencies for complementary works, and
- Council proceed with the ground-breaking ceremony for the project on Monday, December 14
The debate initially centred around Council contributing an extra $2.5 million from its funds, taking the overall investment – on top of the BBRF grant – to $9.1 million.
A later amendment, moved by Deputy Mayor Gavin Jones, added an extra $300,000 as a contingency, taking the total budget from $13.6 million to $13.9 million.
Mayor Brett Otto, Cr Kathy Duff and Cr Kirstie Schumacher (Division 4 – Kingaroy) wanted to let the motion lay on the table for a month until Councillors could receive detailed budget costings for analysis.
However, they were outnumbered by Cr Jones, Cr Roz Frohloff, Cr Scott Henschen and Cr Danita Potter (Division 3 – Kingaroy) who voted to press ahead immediately with the $13.9 million project.
The amended motion, passed by four votes to three, read:
That Council
- Adopt the design in principal for construction as presented
- Approve project with $13.9 budget, including contingency with the additional budget to come from funded depreciation and restricted cash over the period of the project, including $2 million from transport infrastructure, $300,000 from water and wastewater, and $500,000 from property sales, and any project savings to be returned to restricted cash for transport infrastructure or water and wastewater respectively for reallocation by Council.
- Delegate the CEO to negotiate contributions to the project from the Department of Transport and Main Roads as per the TMR/Local Government cost sharing agreement with regular progress reports back to council.
- Delegate the CEO to negotiate contributions from Ergon Energy for the undergrounding of power services with regular progress reports back to Council.
- Council proceed with the ground-breaking ceremony for the project on Monday, December 14
- That Kingaroy and Glendon streets, between Alford Street and Markwell Street, be considered for design when council considers its 2021-22 financial budget.
* * *
The Debate
Cr Schumacher said the KTP had “a high degree of risk and uncertainty” and could haunt the South Burnett Regional Council for a lifetime.
She loved the concept but Council could not keep on turning to ratepayers and asking them for more.
The extra funds requested were ratepayers’ money and would have to be found from the next three Council Budgets.
She did not have confidence in the estimated cost and needed more information before she could make a decision.
Cr Schumacher said Council had already spent more than $930,000 on the project “without even turning a sod yet”.
“Put simply, I’m concerned that we can’t spend money that we don’t have,” she said.
Cr Potter believed the project would invigorate the economy and instil confidence in businesses and the local community.
It would create jobs and make Kingaroy “a community of choice” and also benefit the whole South Burnett community.
“This is a once-in-a-generation project,” she said.
“There has been significant spends in many other major towns in the South Burnett and Kingaroy is in dire need of investment. The people of Kingaroy want this project, I want this project for all of us and for all future generations.”
Cr Duff said everyone wanted to see the transformation of Kingaroy but she was very concerned about the $2.5 million overspend and the fact that $2.3 million from Ergon Energy and DTMR were not “bedded down”.
“We may not even get that money,” Cr Duff said.
She said “every other project” Council had done had “always blown out”.
“Before we’ve even turned a sod we’re asked (for an extra) $2.5 million and $2.3 million that we’re not sure about … I’m just scared about where this is going to land.”
Cr Roz Frohloff said the Murgon footpaths project had blown out from $250,000 to $2.1 million and Cr Duff had not baulked at that.
“We did find that money for Murgon … I believe this is a good project and it needs to be done,” Cr Frohloff said.
Cr Duff disputed the amount of the Murgon blowout, saying the extra funding was $350,000 more than what Council had approved due to issues that were discovered after the project began.
Mayor Otto said the Kingaroy project was long overdue and was desperately needed but there was a serious obligation to deal with ratepayers’ money “very sensibly”.
“I’ve had a serious conversation with (Gympie Region Mayor) Glen Hartwig about this,” Mayor Otto said.
He said Gympie councillors had also “loved and supported and desperately wanted” a once-in-a-generation project but once Council started digging up the ground, the costs blew out substantially.
“That’s not to say that will happen here but it is an unknown,” he said.
He said the Murgon footpath project, cited by Cr Frohloff, was an example of this.
“Once we started ripping up the ground, the cost of the Murgon footpath development increased significantly as a result of additional works that had to be undertaken,” Mayor Otto said.
Cr Duff said she had also spoken to Mayor Hartwig.
“They had two projects. One was the Gympie Rattler and the other one was an aquatic centre,” Cr Duff said.
“In one term, their Council (was turned) from where they were benchmarked as a model Council into a Council that is in dire financial straits. So it doesn’t take very long for that kind of turnaround …
“We have an economic responsibility to ensure this project is sustainable.”
- Editorial: Damn The Torpedoes …
Related articles:
- $2.1m Plan Added To CBD Upgrade
- Info Sessions About Streetscape
- Final Streetscape Plans Unveiled
- $11.3m Facelift Gets Green Light
- Council Unveils $11m CBD Plans
- Third Try For Streetscape Grant
- Council Seeks State Funds For CBD
- Council Misses Out On $4m Grant
- Council Drafts $8m Streetscape Plan
- Council Delays CBD Upgrade
- Kingaroy Streetscape Put On Hold
- CBD Ideas Draw Few Responses
- Reaction To Streetscape ‘Positive’
- Meet The Future Face Of Kingaroy
- Business Meetings For CBD Project
- Public Meetings On Kingaroy CBD Upgrade
- Kingaroy Streetscape Plans Progressing
- Consultants Working On Concept Plan
- Council Plans $8m CBD Upgrade
Financial due diligence should allow the South Burnett Regional Council to assess all financial aspects of the potential acquisition for the Kingaroy Transformation project to determine what the benefits, liabilities, risks and opportunities are. To give credit where credit is due, that was done with the previous council where a specific budget was set for this project.
In conjunction with other forms of due diligence, it is generally the best way to ensure what you pay is justified and sits within budget.
Mayor Brett Otto, an experienced and successful accountant, warned in council’s meeting the financial risks for this council and the burden rate payers will incur if the extra $2.5 million is approved without assessing all of the financial aspects. He warned that if this project blows out – and it is expected it will – then it will place Council in financial dire straits, remembering we already have a huge debt of over $30 million.
Mayor Otto warned all Councillors of the financial risk. He even stated he would advise a client against this move. But that warning fell on deaf ears for four of the seven Councillors.
Massive congratulations to Crs Duff and Schumacher and Mayor Otto, who appear to be the only three with common sense, a quickness in understanding and sensible business acumen.
Rejuvenation of the CBD can’t be disputed in my view, it has needed a revamp for sometime but not sure whether it will make the town any wealthier but rather cosmetic in appearance for the better.
SBRC please, please do not put my rates up or sale yards fees to compensate a project that will keep draining funds well into the future. Everyone knows it is not going to cost $13.9 million but rather much more.
Every project or works program does, especially when using an old framework of infrastructure as the base.
Don’t forget rural roads. If they are not maintained to a standard regularly, you will have less people visiting CBD in our rural towns. Roads are the link to all of this and don’t think ratepayers are the key to the funds.
Council, you have to learn to better lobby State and Federal governments, just don’t attend events for a cuppa tea and scones but work smart and be proactive. Ratepayers can’t keep being drained.
My rural rates are over $21,000 a year for which I receive very little in return, an expense my business must pay well before it can spend in shops in the CBD of Kingaroy or any of our smaller rural towns in our shire.
Don’t get greedy with this SBRC, we all love a new bathroom with shiny taps in our homes but sometimes we can’t have it!
Perhaps the four councillors who voted for the $13.9 revitalization project to go ahead should have the extra expenses taken from their salaries. Hardly fair to hit the already struggling ratepayers with any extra costs.
Yes, the SBRC could spend millions on beautification in Kingaroy but it won’t encourage average people to spend more in the shops or the amenities around town. Most people with families would rather go to Gympie or Toowoomba to do a major shop. Some shops are closing down already and leaving town. So what will happen if this rejuvenated 4 person dream goes ahead? Rents will increase, forcing more shops to move away. Let the ratepaying public have a say – I think you will find the “Nays” have it.
Re Judy Schulz’s comments above. Well said – couldn’t agree more!
I personally think this would be a waste of money. Yes, the town could do with a bit of beautifying. Having said that, I think ALL of the CBD could use a bit of help, not $13 mil spent on this one block that in my eyes seems pointless. Funny how it just happens to be in front of the Council Chambers. What I would love to see and think would be used by more people, especially families, is Memorial Park revamped with a water park for the little ones to enjoy on these hot summer days.
Common sense has eluded the Gang of Four once again and it is all about a power play. The main street, Kingaroy Street is just an eyesore. All this money spent in one small section is ludicrous. Our roads throughout the South Burnett are a disgrace. We have no gang for construction of new tar sealed roads – just grading dirt roads once a year is a pointless exercise and we are falling further and further behind with the condition of our roads. I am so ashamed of these four who just use power plays to get what they want.
Time to ready for the next election. We definitely need 4 new councillors and a new deputy mayor .
To every ratepayer in the South Burnett: do more than leave your comment and expression of dissatisfaction on this platform. Instead, head to change.org and sign the petition started by ratepayers of the South Burnett against this ludicrously expensive beautification project. Let’s stop those 4 Councillors who have pushed this project through, against the will of the people and the sound advice of an experienced financial person in their midst. Our (not so) FAB 4 do not have the money for this project and just hope that the ratepayers will cough up without protest through an unavoidable hike in council rates.
This vote by four councillors really makes me angry. It’s not because of the streetscape project. The Kingaroy CBD desperately needs an facelift and councils have been talking about it since the 1990s.
But the ham-fisted, arrogant way these four have rammed this through without taking the time to examine the Budget means every South Burnett resident who lives outside Kingaroy is now screaming.
Our cowardy custard councillors are likely to back down and we’ll have to put up with a crappy town for a couple more decades. The idiots have stirred up the parochialism. I suspect this is exactly what they wanted to do in a clumsy way to undermine Otto.
Councillors: spend the time. Go over the budget. Check your planning. It’s not as if council hasn’t got it wrong in Kingaroy before.
For instance, O’Neill Square.
How much did shifting the railway station cost? Closing a street? Moving a tree? To basically build a pretty skateboard park with landscaping lights (that don’t work) and where skateboards are banned.
Then someone realised a public entertainment area needed toilets (duh). Another hit to the Budget. Then as the replanted tree wasn’t thriving, a new Christmas tree was planted.
Hey, we need a roof over the “stage”. Pity the Christmas tree was planted in the wrong spot. Don’t worry build the roof anyway. The Christmas tree was never used.
Someone also didn’t understand that water runs downhill. O’Neill “pool” simply drained into the historic building. More dollars to fix.
And this GREAT TOURIST ATTRACTION that was going to revive the Kingaroy CBD is now simply a council office!
All because of poor planning and inadequate budget oversight.
Do your work councillors.
Please everyone, go to a not-so-old news article and read and reread properly; especially the elected members of our now council and of our previous council. Please don’t lay the blame on staff as the staff do really have to walk the path that the elected members do choose!
https://southburnett.com.au/news2/2020/11/05/grc-working-to-rebuild-trust-mayor/
Now this project was hatched some long time ago. Back then this area was not in so severe a drought and the State finances were not in such a parlous condition as they are now and they do appear as if they will stay that way for a long while yet! Also then we did not have the effects and after-effects of COVID. These are all plain facts that the Councillors have chosen to incompetently totally ignore.
Perhaps they are “just too busy” to give it much thought; and I know why! After watching social media, it seems as if every time someone does something all the councillors have to rush there for photo shoots so they can post up their prowess on F.B. Real media tarts!
This project is really a “I want” one and not a “I desperately need” one type. When I was a young bloke I wanted an E Type Jag; I couldn’t afford one and a MGA had to do the job, it did!
So councillors please have a rethink. This area has already had workovers while a part of the rest of town is still in need.
Another point to ponder is ongoing maintenance. Every project does need maintenance which means extra future costs. Example, a good mate got a second hand Roller and a good car it really was, but as time went on he found out the high costs of keeping it maintained and decided to quit it before the costs started.
Will this project really bring tourists to town just to see it? Gee, I don’t think so! You guys are kidding yourselves if you think everything has to be grand to be attractive!
A few days ago in Lamb St, I had a good long yarn to a young couple here from south of Brisbane for a few days. They were staying at Moffatdale (camping) and did not come here to see the new streetscape in Murgon. They came here for the attraction of the whole area.
They were on motorcycles and what attracted me to them was the bike she was riding – one of the new Royal Enfield Himalayan adventurer style decked out in all the “good” gear and I hadn’t seen one before. I enjoyed the yarn.
They really loved the whole area and did not come out for more of the same of what they had at home. They were most happy with the simple things of the area.
I must also point out to the councillors that a large proportion of this shire has people on fixed, very fixed and limited incomes and rate rises are something none of us need now or ever!
For a while now it does seem as if everything the Council does is on a very grandiose scale and there is not a lot of thought and imagination involved in trying to save a buck.
Planning and execution of work leaves a lot to be desired and I did think some of the councillors would have done a lot better than what they seem to be doing, and what’s worse is that they indulge in self-praise, too!