Finally it is revealed! Funds from the sale of Monash’s aged care facilities to pay debt and new Library?

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Have you seen this Leader Press article?

Source: Waverley Leader article 6 May 2014
Source: Waverley Leader article 6 May 2014

Monash Council’s 2014/2015 draft budget has been released to the community to provide their feedback. 

http://www.monash.vic.gov.au/publications/documents/Draft_budget_2014-2015.pdf

The above article states:

  • profit made from the sale of the aged care facilities will be used to pay off $15 million in council debt.
  • The Council is seeking expressions of interest to develop council land in Glen Waverley, bound by Springvale Rd, Coleman Pde, Kingsway and Railway Pde North. “Cr Lake said future development of what is now a ca rpark might include a new library”.
  • there might be a 6% rates rise which Cr Davies is against.  “Only councillor Robert Davies voted against the draft, saying a 6 per cent rate rise was “not warranted”.

What does the community feel about the proposed budget? Did the community predict the profit gained by the sale of the aged care facilities will be used for a new Library? What about the rate rise?

Monash Council previously stated, several times, that if did not sell the aged care facilities it would mostly likely need to increase the rates to keep the facilities running.  However in the budget it has proposed a rate rise despite the fact that they have made a huge profit from the sale of the aged care facilities. As for the new Library it seems the community prediction the profit made from the sale of the aged care facilities would be used for a new Library and possibly a Community Hub, may be close to the truth: read the Mayor’s comment about a library in the above article.   At council meetings it was stated that there were no plans to use the sale proceeds for a new library or community hub in Glen Waverley. So did Council provide false info to the community? Below are some of the responses to questions from community members at Monash Council meetings.  The questions relate to the aged care facilities, rate rises and the Library.

Read the questions and answers and form your own views on the current Council plans.

Question about Glen Waverley Library:

Question:  It is incomprehensible, not to mention irresponsible, that Council is expecting an inflow of millions of dollars without any plan regarding what is to be done with the money. There is no place for Scrooge at Christmas and much less in local government. Will Council use funds from the sale of the Monash and Elizabeth Gardens residential aged care facilities and the land from Monash Gardens to fund the proposed Community Hub and Library in Glen Waverley? Will Council use funds from the sale of the Monash and Elizabeth Gardens residential aged care facilities to repay money borrowed to fund the superannuation debt?

Council Response: The monies received will fund a mix of capital works and services for our community. We are yet to decide which specific projects the funding will go towards. The decision on this will be made at the appropriate time, which is when Council is forming its annual draft budget. How the funds are spent will be part of the community consultation process that we undertake for our draft budget each year. The superannuation liability has already been funded for out of Council’s cash reserves. No money was borrowed for this purpose. There are no plans to use the sale proceeds for a new library or community hub in Glen Waverley.

Sale of Monash’s Aged Care facilities and Rate Rises:

Question:  Why would Council seek to divest itself of residential aged care services at Monash Gardens and Elizabeth Gardens when they contribute to such a sense of community?

Council Response: The issue we are grappling with is that the facilities will need major redevelopments in coming years so they can continue to meet community expectations. To fund such redevelopments, Council would need to take on significant debt/ and or impose rate increases on the community. For this reason, Council is considering whether there may be a better way for Council to seek secure residential aged care services in and around the municipality of the City of Monash in the future.

Question:  The financial statements, note 9, refer to unfunded superannuation liabilities of $12m. This money was, apparently, paid in February 2013 and now needs to be recouped. How is Council planning to recoup this money? The Mayor said this would come from a mix of savings and borrowings over four years. What assets will be sold? What fees are to increase? How much rate increase is proposed? If money is borrowing, how will this be repaid?

Council Response: To go to your questions about rate and fee increases first, Council has a four year financial plan which provides for rate increases of 6% this year and in each of the next three years. This is consistent with the rate increases of previous years. Fees are set to increase by 4% – or in line with either cost increases or market levels – in each of the next four years. To keep costs down, Council has adopted internal measures including a freeze on creating any new staff positions. In regards to asset sales, Council is yet to decide whether to sell any major assets (other than the usual plant/fleet sales). In regards to borrowings, Council decided not to increase its borrowings as part of its 2013/2014 budget.

Question: When Council informed residents and families that they were considering selling the Aged Care Facilities, their argument was that they felt they couldn’t see themselves adequately providing aged care services in 20-30 years time. When pressed for reasons, they rejected claims that running costs were problematic. In the latest Monash Bulletin, Council states that the facilities will need major redevelopment in coming years, which would require either rate increases or taking on significant debt. If future funding is an issue and given that Monash rates are among the lowest, I am convinced that most ratepayers would support a modest rate increase if it were used to maintain the Aged Care Facilities. Or why not consider selling or leasing the unpopular Euneva carpark to a private operator and use the funds to update the Aged Care Facilities?

Council Response: Generally speaking, Monash residents have made it clear over many years that they wish their rates to be as low as possible. In particular, Monash is home to many retired residents who may have assets, but not necessarily a high income. Each year, Council is contacted by residents concerned that their rates are too high. This is despite Monash having one of the lowest average rates in Victoria. Council is not considering selling or leasing the Euneva car park. While use of the car park is currently low, usage will grow over time as it did with the Bogong Avenue car park. The purpose of the Euneva car park is to provide parking for customers of local businesses, so local jobs and the local economy are supported. A private operator would most likely wish to charge for parking and the parking could be opened up to all day and commuter parking. This would be contrary to the purpose for which monies had been collected and the car park was constructed.

If you like to see more responses please refer to Monash council’s  minutes.  http://www.monash.vic.gov.au/reports/index.htm

Have you also seen this response on Monash Council Facebook page 6 May 2014?  Council is proposing to place the estimated $14.8 million proceeds from the sale of the aged care facilities into a Debt Management Reserve, which will be used to pay off Council’s $15 million worth of debt over the next four years (as each of the separate loans mature). The $7 million which was in a Discretionary Aged Care Reserve is proposed to be transferred into a Discretionary Development Reserve for Council to draw from in future years to fund major\projects. A 6% rate increase is proposed………………………………… https://www.facebook.com/cityofmonash?fref=ts

Feedback welcomed – click on  ‘Leave a Comment’ above to add your point of view.

Community Feedback on the draft budget needs to be provided by Friday 30 May 2014. Final budget will be discussed at Council Meeting 24 June 2014.  EM&U members will be attending the meeting – please join us in the public gallery.

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4 thoughts on “Finally it is revealed! Funds from the sale of Monash’s aged care facilities to pay debt and new Library?”

  1. I also find it very ‘interesting’ that Council insinuated that it would have to raise rates if they did not sell the aged care facilities, and of course Monash residents would not like this. Well, the facilities have been sold for $21+m and guess what…..the rates are being increased….they have done it anyway! How can the community believe a word Council says?

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  2. I find it quite interesting that when asked about the funds from the sale of the aged care facilities, the Council answered that they would not be used to pay off Council debt……….hmmmmm, really??

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