Prove I'm wrong and I'll step down: Cr Melky

By ERWIN CHLANDA
 
Councillor Eli Melky last night offered to resign from the town council on the spot if anyone could prove his argument for paying off the civic centre loan to be flawed: “I will put my life on it,” he said.
 
The dramatic Finance Committee meeting started with Cr Melky (at right) still lacking a seconder for his motion to pay off the remaining $1.2m, creating a saving to the ratepayer of about $162,000, as he claimed.
 
It finished with Finance Committee chairman Brendan Heenan saying:  “In principle everybody is in agreement that the loan be paid out,” and called on Cr Melky to re-word his motion.
 
But Mayor Damien Ryan said: “I disagree,” urging the meeting to defer a decision until the meeting on June 26, when information about what he called “the only scenario” would be to hand: “What is the cost saving if we pay out the loan. If we get the decision on June 26 we can pay it out on the 27th.”
 
And Cr Jade Kudrenko, a resolute opponent at the May council meeting to paying out the loan, announced she would move for the suspension of standing orders that may prevent a decision to be reached at the June 26 meeting. She had changed her mind.
 
Mayor Ryan added: “I will be very happy to work through that night. I just ask Cr Melky to identify a [budget] line” from which the money should come.
 
This is an issue that could still scuttle Cr Melky’s plans: Should the funds come from unspent funds in 2016/17 on a variety of projects or from reserves – apparently opposed by some councillors.
 
The debate leading to last night’s surprise decision highlighted the complexity of the council’s financial issues, no doubt a clear obstacle to sound financial planning.
 
The surplus declared to be $12m in April (year to date) is now $9m.
 
The money saved by Cr Melky’s strategy, on his assertion, has changed from “a minimum of $145,252.59” to about $162,000.
 
Finance Department Director Dinesh Pillay’s estimate of the savings changed from $16,800 to $28,000. He explained that his earlier estimate was based on assumptions about 2017/18 budget decisions the council may be making. The $28,000 saving came from the auditors who were consulted.
 
Cr Kudrenko said: “We won’t know our surplus till October.”
 
Cr Melky countered that by June 30 the council will have a “provisional understanding” about the surplus that is not going to differ by “millions or hundreds of thousands of dollars”.
 
There were heated exchanges between Cr Melky and Mr Pillay about $5000, and possibly a further $5000, being spent for financial advice from the auditors on the civic centre loan issue.
 
Said Cr Melky: “A person who works in bank can tell you that for free and I did it in 24 hours.
 
“I am appalled at the fact that now, this exercise has labelled me in one way or another that I have cost the ratepayer another $10,000 because I am not satisfied or I am somehow chasing a red herring.”
 
Mr Pillay said Cr Melky asked for independent advice: “There was a request from the councillor as to having to verify the figures.”
 
Cr Melky denied that.
 
He angrily said to Cr Heenan, who was chairing the meeting, that had the decision to pay out the loan been made in May, it would have saved the ratepayers a further $16,000.
 
“We charged them a 1.5% rate rise this year” which had raised $325,000.
 
Pointing at Cr Heenan Cr Melky said: “That’s what it will cost if you do not second this motion today.
 
“You have continued to hurt the ratepayer unnecessarily. I would resign from council today if I was that wrong.
 
“Right now I would be happy to walk away from the council … because you are wrong. Do you want to tell me where I made a mistake?”
 
Mayor Ryan said: “I made my decision at the last meeting on the numbers that were given. That’s all I can go by.”
 
Cr Melky said the $1.2m to pay off the loan could come from the capital grants fund “that has over $5m in it” and is “very capable of taking care of it”.
 
That other sources are available was highlighted by the meeting being confident of finding $321,000 in “budget lines” for a footpath requested by the Steiner School in Ragonesi Road, a request supported by a petition carrying 160 signatures.
 
Cr Melky said to pay out the loan “we don’t need to touch the money that is currently invested. We don’t need to take money out of our savings account. We don’t need to break that policy.”
 
This was clearly directed at Cr Kudrenko who concluded that two issues had swayed her: Firstly, the council will have a “clear answer” on the savings.
 
And secondly, she was earlier “uncomfortable” about taking money from the Capital Infrastructure Fund “after years of saving” but Cr Melky had addresses that with his proposed Project Future Fund.
 
She now felt she was ready to “second the motion to some degree” as there would be “savings either way” so long as it was “clearly identified how we can repay”.
 
Cr de Brenni said: “If we pay it off we have money in our pocket. It’s a saving, no matter which way we go.”
 
It appeared this simple issue carried the day: The council is paying 6.75% on its loans and getting 2.58% on its deposits.