By ERWIN CHLANDA
Councillor Eli Melky says he wants to save the ratepayer “a minimum of $145,252.59” by using part of a cash surplus – $12m in April – to pay off the remainder of the loan for the construction of the civic centre.
The balance owing is about $1.3m. The town council is paying 6.7% interest on the loan while it is getting $2.5% for its deposits.
The council borrowed $5m in 2004 for the building whose cost was $10.4m.
However, Cr Melky has yet to find a seconder for his motion made public yesterday, and unless he does the matter will fail to be debated at Tuesday’s committee meeting and the proposal will almost certainly lapse.
Cr Melky, who is a certified credit advisor, disputes an earlier estimate that the saving would only be $16,800, which Cr Jade Kudrenko described as a “meagre” at the last meeting, and the council rejected the paying out of the loan.
He rejects claims that the council needs substantial cash reserves for the event of unforeseen emergencies.
“What emergencies,” Cr Melky asks. “The council has comprehensive insurance to protect its assets in catastrophic events, including floods.”
With the savings he wants to establish a “future projects fund” in an interest earning term deposit account, generating more than $40,000 between now and June 30, 2020.
Under the current arrangements the council would be paying more than three times as much in interest during that period.
Cr Melky says unspent surplus, the total of which was $12m as at April 17, includes “employee costs” and “material & contract labour” which could be used for the payout of the loan.
In his notice of motion published on the council’s website yesterday Cr Melky says: “This information has been discussed extensively with qualified members of the finance industry.
“In my opinion, it is in the best interest of the community to review the discussion from the council meeting on May 29 and support this motion.”
The Alice Springs News Online will be seeking comment from other council members over this long weekend.
Meanwhile the father of a child going to a community child care centre wrote to the News that the council, “despite a massive budget surplus this year” has raised the fees they charge to the centres for repairs and maintenance across town.
“At the Gap Community Childcare Centre this has led to a 10% increase in childcare fees!”
AT TOP: Google Earth image of the sprawling civic centre complex.
New brawl looms over civic centre loan
By ERWIN CHLANDA