Colin James: What’s behind Playford Council’s huge debt battle
Many of Playford Council’s grand plans remain unbuilt as it struggles under $140m of debt – amid other turmoil and high unemployment. It has a fight on its hands, writes Colin James.
Opinion
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Ratepayers in the northern suburbs have every right to be frustrated – even angry – with Playford Council. Each day, many drive past an $8.5 million carpark at Elizabeth that remains empty amid a brown expanse of vacant building sites.
While work is under way nearby on a new $8 million retirees community hub, there is no sign of construction starting anytime soon on a luxury hotel, government office building, or medical hub the six-level carpark on Main North Rd was built to service.
As for a much-vaunted ice arena and entertainment stadium, which was to be connected to the carpark by a footbridge over Philip Highway, that was scrapped last year when councillors learnt it could expose ratepayers to a $45 million financial risk.
The projects were the brainchild of former Grand Prix boss and Bannon government bureaucrat Mal Hemmerling, who was sacked by the council over a sexual harassment complaint. He disputed the allegation and sued for unfair dismissal, and the proceedings were resolved outside of court. The legal dispute cost ratepayers – already weary with the council’s spending – well over $1 million before it was resolved.
Mr Hemmerling was unpopular with many ratepayers before he left the council. For years, property owners from One Tree Hill to Virginia, Elizabeth Downs to Craigmore and Angle Vale to Munno Para West have paid some of the highest rates compared with capital land value across metropolitan Adelaide.
Four years ago, there was a revolt when Mr Hemmerling and his deputy Sam Green tried to change its rating system to force those ratepayers with higher land values to pay more than those in lower income areas.
Those targeted included farmers in the foothills and market gardeners on the Adelaide Plains. Councillors relented when several hundred turned up at a monthly meeting at the Playford Civic Centre – refurbished at ratepayer expense – to vent their anger.
Mr Green since has replaced Mr Hemmerling at the helm of Playford Council; the council is product of an amalgamation between Elizabeth and Munno Para councils in the late 1990s – a forced marriage that came with a $20 million debt.
Since then, its borrowings have ballooned to $140 million, the biggest of any council in South Australia.
Much of it has been blamed on the council having to fund infrastructure to support new housing development as the previous Labor government released huge parcels of land north of Elizabeth under its 30 Year Plan for Greater Adelaide.
The spending – including capital projects undertaken during Mr Hemmerling’s time at the council such as a new tennis complex, training ground for Adelaide United and outdoor bowling arena – has occurred within one of the poorest regions in the country, and one of the fastest growing.
Research released last month found the federal seat of Spence, which covers much of Playford Council, had the lowest per capita net wealth – calculated by subtracting debt from assets such as equity in property and superannuation – of any electorate in the country.
Traditionally high unemployment increased in the aftermath of Holden closing down its plant at Elizabeth.
New councillors elected a year after the factory shut its doors in October 2017, have been calling for the council to start exercising restraint with its spending – and to get its debt under control. Mr Green has made the task his priority, working with his finance manager Grace Pelle to develop a strategy to sell surplus assets.
The pair recently announced they had developed a personal relationship, with Mrs Pelle opting to tender her resignation. The announcement came after a turbulent time for Mr Green, including managing the council while ICAC conducted an evaluation of its council’s policies and procedures, the Auditor-General examining its use of credit cards and the lengthy legal dispute with Mr Hemmerling.
A seemingly level-headed individual, Mr Green has the backing of most of his 16 elected members as he tries to get the organisation refocused on delivering key services within its annual budget – and getting its finances back in order.
It is not going to be an easy task, especially in the aftermath of COVID-19. He needs all the support he can get.