A SERIES of inconsistencies are said to be the main driver for a rescission motion regarding an internal loan.
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Concerns have also been raised about the lack of time and information provided to councillors regarding the potential need for the loan as protection against the council being in a negative unrestricted cash position.
A rescission motion was lodged by councillors Warren Aubin, Natalie Cranston and Sophie Wright the morning after the council resolved to take out the loan.
Speaking to the Western Advocate, Cr Wright said she "kind of shut down" after the vote on Wednesday, June 18, 2025.
She and Cr Cranston spoke after the meeting and, at around 11pm, decided to pursue a rescission motion.
"Nat and I were chatting and she said, 'Soph, I think it's actually incumbent upon us for the sake of our community to do this'," Cr Wright said.
The rescission motion has already been slammed by acting mayor Ben Fry, who labelled it "an exercise in procedural vandalism, not robust scrutiny".
He noted that the $10 million internal-loan facility from the sewer fund to the general fund was recommended by the Office of Local Government.
"A rescission motion should be used sparingly, when fresh, material information comes to light. No such information exists," he said.
"What we have instead is a reheated list of talking points already tested, debated, and defeated in open session.
"Every hour staff now spend re-drafting reports and reassembling agendas is an hour not spent repairing roads, balancing budgets, or delivering services. Ratepayers foot that bill."
The rescission motion will be dealt with at an extraordinary meeting at 8am on Tuesday, June 24, 2025.
Councillors Aubin, Cranston and Wright will be looking for support to rescind the decision the council made on June 18.
At that night's ordinary meeting, the council agreed to approve an internal loan from the sewer fund to the general fund as detailed in the report from council staff.
In the report, it was stated that the council's unrestricted cash is forecasted to be in a positive position by June 30, 2025 provided that a Financial Assistance Grant (FAG) prepayment is received by that date.
"Over the past five years, the NSW government has released 85 per cent of the FAG payment prior to the year to which it relates," the report reads.
"There appears to be some doubt as to the continuance of this practice for this year."
As a precaution, council staff recommended the internal loan be approved to ensure the unrestricted cash is in a positive position if the FAG money does not materialise before the end of the 2024-25 financial year.
Council staff had already written to the Minister for Local Government to apply for the loan prior to the publication of the report.
The letter, which was provided as an attachment to the June 18 meeting agenda, has drawn criticism from some councillors over inconsistencies between the contents of the letter and the report.
Examples of this are the amount being sought and the plans for repayment.
In the letter to the Minister, it says an amount of $10m is requested for a five-year period, repaying the loan by June 2030.
The report from council staff does not mention the $10m figure, instead stating the loan would only be for the amount of negative unrestricted cash required and it would be repaid during the following financial year, being 2025-26, as the FAG funds are received.
Council staff also noted in the report that the loan will only be processed if the need arises.
Cr Wright said the main factor behind the rescission motion was the inconsistencies, saying "the report didn't match the recommendation or the letter that was sent to the Minister".
In a statement to the Western Advocate, acting general manager Neil Southorn explained the reason for the differences between the report and the letter.
"As explained at the meeting on Wednesday, the letter to the Minister was designed to provide maximum flexibility to council," he said.
"The report reflects the more likely outcome, that the loan will be repaid as soon as possible."
Cr Wright has also said she and other councillors received inconsistent figures as to what the unrestricted cash deficit is anticipated to be, even as recently as an hour-and-a-half before the June 18 meeting.
Interim finance director Peter Smith did acknowledge this during the ordinary meeting, saying that "there has been a calculation error" and offering an apology.
He said the forecasted balance for the unrestricted cash on June 30, without the FAG funds, is negative $2.19 million.
The inconsistent information and lack of notice about the intention to take out an internal loan has also contributed to the rescission motion.
Regarding the notice to councillors, Mr Southorn said they received the report and letter a week before the June 18 council meeting, which is the same notice given for other reports.
He said the letter was sent to the Minister for Local Government earlier "to allow maximum time for it to be considered".
Cr Wright has also flagged concerns that the amount of $10m in the letter to the Minister is more than the balance of the sewer fund.
Bathurst Regional Council confirmed the balance of the sewer fund is currently about $7.2 million, and projected to be $9,813,816 on June 30.
Cr Wright said the council has "an obligation to our town to ensure that that sewer fund always has a buffer in it", and she fears the internal loan puts that at risk.
Cr Wright also said it is her opinion that the reason why $10m was requested was, in part, to help fund the Ngurang Arts Residency (formerly BARN).
Mr Southorn said this is not correct.
"The intention and purpose of the loan is to protect the general fund, not to make its cash position worse," he said.
"In any case, Ngurang is already grant funded and is expected to be cost-neutral when it becomes operational."
Will the rescission motion succeed?
For the rescission motion to successfully change the council's resolution on the internal loan, at least two councillors would have to have had a change of heart since the June 18 meeting.
When asked whether this could happen, Cr Wright said "potentially".
She said she would be comfortable supporting the internal loan if the wording around the intention of the loan and its repayment were made more clear, similar to an amendment proposed by Cr Cranston at the ordinary meeting.
"The amendment that Natalie raised eased the concerns," Cr Wright said.
"It made it a limited amount for a limited time, to be repaid immediately from the Financial Assistance Grant.
"That's what we would be expecting the council to present, because they need to learn to live within their means, and in Q1 (quarter one) of the next financial year, they have other mechanisms available to them that they should be exploring."
