Council backtracks on hotel site millions carpark pledge
Proceeds of a land deal in Mooloolaba spruiked as helping offset costs of a new carpark will instead end up in general revenue.
Sunshine Coast
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Proceeds of a multimillion-dollar land deal in Mooloolaba which Sunshine Coast Council spruiked as helping offset construction costs of the Brisbane Rd carpark will be funnelled into general revenue.
The revelation came as the council was set to use the costs of carpark construction as part of its justification for rolling out paid parking in Mooloolaba.
Sunshine Coast Council was in June given the green light by councillors to proceed with a deal with KPAT Asset Management Pty Ltd to sell the remaining half of the Brisbane Rd carpark site for $7.2 million.
In the council officer’s report made public ahead of the June 25 ordinary meeting “revenue received from the proceeds of sale of the land helps to offset the cost of constructing the adjoining council multistorey carpark” was stated as one of the benefits to the region of proceeding with the proposed project.
But a council officer’s response to questions posed by Councillor Maria Suarez, published on Wednesday morning ahead of Thursday’s ordinary meeting, confirmed the proceeds of the land sale had been allocated to general revenue.
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Cr Suarez asked officers to explain how the $7.2 million proceeds of the sale “have been applied to offset the cost of constructing the ParknGo Mooloolaba Central facility”.
She also asked for an explanation of how the offset had been taken into account during break-even calculations for parking fees at the new facility.
In response, council officers said the land sale proceeds, once received, were allocated to go back into general revenue “to offset the overall costs against council’s financial position”.
“This approach is council usual practice, rather than land sales having a direct contribution to a project,” the officer’s response stated.
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The officer said the land sale funds had already been planned for in council’s overall cash flows as part of a 10-year forecast.
“If funds were to be used to reduce debts for the project, therefore there would need to be other adjustments made to the capital works program by the same amount,” the officer said.
“This would need to be considered as part of the 2021-22 budget process to understand flow-on impacts on council’s financial position.”
In the officer’s report in the agenda published ahead of tomorrow’s ordinary meeting it was noted the $18 million contract cost to build the new carpark was “being met by council through borrowings”.
The officer’s report also said the proposed parking revenue generated from the paid parking fees proposed were “considered adequate to service the interest and redemption of the ParknGo Mooloolaba Central loan as well as the operation and maintenance of the site and associated systems”.
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From January 18 it was proposed people would pay $2.50 an hour to park in the new multideck facility.
Other revelations made by council officers ahead of tomorrow’s meeting included the total cost of the Brisbane Rd carpark.
Officers confirmed the $18 million was just the Evans Built contract cost for construction of the facility, and did not include roadworks and other infrastructure costs.
“As per advice provided previously to councillors the full project delivery costs are $23.5 million when taking into account roadworks, service relocations, technology and project management fees,” the council officer said.
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“The full $23.5 million figure was used to inform break-even calculations and estimated break-even for fees or costs to ratepayers is annualised.”
It was also revealed the council would repay almost $1.5 million a year for loan interest and principal repayment for the new carpark.
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