ALTHOUGH it received vital grant funds before the end of the last financial year, Bathurst Regional Council has decided to draw down money from an internal loan in an act of "risk-prevention".
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A $5 million internal loan from the sewer fund to the general fund was approved by the Minister for Local Government in late June 2025, and the council has since opted to draw down $4.5m of this loan.
The money has been referred to as a "buffer" to ensure the council can respond if its unrestricted cash position was to slide into the red again.
Interim finance director Peter Smith has flagged it as a possibility in the coming weeks, with there being some uncertainty around the receipt of rates and land sales income.
"We are still in the middle of July, so there is a period where we believe there could be some need for us to have a buffer," he said.
As of June 30, 2025, the council's unrestricted cash was provisionally positive following the receipt of a $4.2m Financial Assistance Grant (FAG) prepayment in late June.
A mayoral minute was presented to the July 16, 2025 ordinary meeting to provide an update on the loan.
It highlighted that the terms of the loan are for it to be repaid in quarterly instalments of $277,774.53, over a maximum period of five years at a current interest rate of 4.10 per cent per annum.
The mayoral minute also noted that at a meeting of the council's new Financial Sustainability Committee on July 10, it was agreed that the loan would be repaid to the sewer fund upon receipt of the next round of the Financial Assistance Grant (FAG) allocation.
As the Financial Sustainability Committee is only an advisory body of the council, its decisions are not binding.
What the council resolved to do on July 16, as per the motion the mayor put forward, was to note the information in the mayoral minute and note that the loan was drawn down.
It also asked the council to note that a further report on the FAG payment schedule would be provided to the Financial Sustainability Committee, which would then be asked to provide further advice to the council in regards to the loan, such as repayment timelines.
Councillor Natalie Cranston, who is a member of the Financial Sustainability Committee, was not satisfied with the recommendation from the mayor and had proposed an amendment.
"For me, this is our opportunity to ensure the interfund loan is treated as the report intended, a short-term cash-flow measure ... rather than an open-ended, rolling facility with repayments open-ended over the next five years," she said.
Among the four points of the amendment was for the council to formally adopt the Financial Sustainability Committee's recommendation to draw down the interfund loan of $4.5m, to be repaid to the sewer fund upon receipt of each quarterly FAG instalment.
The amendment lost in a five-four vote, with mayor Robert Taylor, deputy mayor Ben Fry and councillors Nick Packham, Jac Underwood and Elaine West opposed to what Cr Cranston had suggested.
Cr Cranston then put forward another amendment, which she said was about transparency.
The proposed amendment was as follows:
- The information be noted.
- Council not adopt the financial sustainability committee's recommendation and acknowledges that repayment of the interfund loan is not being tied to receipt of the financial assistance grant instalments.
- A further report outlining how the quarterly loan repayments will be made including contingency plans in the event the forecast land sales do not materialise be provided to council.
- And any proposed use of the remaining $500k loan balance be subject to a future report.
"This amendment basically ensures transparency and accountability so there is no misunderstanding that this is a loan for an extended period of time, five years, and, as yet, we don't know how we're paying it back," Cr Cranston said.
During discussion of the amendment, Cr Underwood asked if the repayments would be made utilising the FAG funds as they are received.
In response, general manager David Sherley said, "Where practical, yes."
Again, the amendment failed, with the vote split the same.
The council reverted back to the motion that was put by the mayor, which became the resolution with the support of councillors Taylor, Fry, Packham, Underwood and West.
It appears they were swayed by the position of senior council staff, who wanted maximum flexibility when it came to the loan funds and the repayments.
Mr Sherley said his position was that the council "should take as much flexibility as you can within the scope of what's been provided".
"We don't know exactly what is going to happen. The councillors are quite right, you don't know how the land sales are going to go, you don't know definitely what the pattern will be with rate payments, so having that money there is a risk-prevention factor," he said.
He also highlighted that the mayoral minute intended to have the Financial Sustainability Committee come back to the council with advice regarding the loan, with the repayment schedules being a specific example.
