Liverpool Council’s Asset Sale Proposal: Mortgaging Our Children’s Future

The recent Liverpool Council meeting has unveiled a concerning initiative dubbed “Project 26,” which proposes consideration and the potential sale of council-owned properties to address budget shortfalls. This short-sighted approach to fiscal management raises serious questions about the council’s strategic planning and its duty to preserve community assets for future generations. We can not sell properties belonging to the future generations of Liverpool Residents.

The Concerning Proposal

Acting CEO Mr Jason Breton presented a plan to evaluate approximately 2,700 council-owned properties for potential sale. While the specific criteria remain shrouded in secrecy, the focus appears to be on properties that don’t generate what council deems to be “adequate” rental yields compared to potential immediate sale profits.

One particularly troubling example is the proposed sale of 3 Hoxton Park Road, currently home to our State Emergency Service (SES) – the very organisation we rely upon during crises. This proposal exemplifies the short-term thinking that plagues current council decision-making.

The Numbers Don’t Add Up

During the meeting, Councillor Richard Ammoun highlighted a stark example using what we expect to be the same property located at 3 Hoxton Park Road: a property generating $270,000 in annual revenue with a market value of $17 million. While some might view this as an underperforming asset, this narrow perspective fails to consider:

• Long-term capital appreciation
• The social value these properties provide to our community
• The historically proven fact that councils often end up repurchasing sold assets at significantly higher prices

The Financial Reality

The council currently holds an impressive $373 million in various bank accounts, earning a 4.42% interest rate and generating approximately $16.4 million annually. While these funds are restricted in their use due to statutory requirements, this substantial sum highlights the need for more creative financial solutions.

Alternative Solutions

Instead of selling off our community’s future, the council should consider:

1. Operational Efficiency
   • Implementation of a “Save Five to Stay Alive” initiative requiring each department to identify 5% cost savings, demonstrating to the community an effort to clean their own house first.
   • Complete operational review of all council services
   • Modernisation of processes to reduce administrative costs
2. Revenue Enhancement
   • Exploration of innovative financing models within legislative constraints
   • Development of underutilised properties for community benefit
   • Creation of new revenue streams through sustainable initiatives
3. Strategic Asset Management
   • Development of a comprehensive asset utilisation strategy
   • Investment in property improvements to increase rental yields
   • Creation of community-business partnerships to maximise asset potential

Festival Spending and Fiscal Responsibility

Councillor Peter Ristevski’s astute observation regarding the $1.2-1.6 million annual festival expenditure highlights a crucial point: “If you can’t pay the mortgage then don’t have a house party every week.” was his comment in last nights meeting. While community celebrations are important, their timing and scale should reflect our financial capacity.

The Banking Paradox

Perhaps the most ironic aspect of council’s current financial management is that ratepayers’ money, held in trust by council, is being lent to banks at 4.42%, only to be re-lent to Liverpool residents who have mortgages at higher rates around 6.42%. This financial merry-go-round benefits financial institutions while our community assets are considered for sale. If the money can be lent to banks, why cant residents over the age of 50 with less than 30% LVR on their mortages be given access to borrow the money at 5.52%. The residents lifestyle improves along with Councils financial return.

Looking Forward

The proposal to consider selling community assets represents a failure of imagination and strategic thinking. Our council-owned properties are not merely items on a balance sheet; they are investments held in trust for future generations. Every property sold today is a lost opportunity for tomorrow’s community.

Recommendations:

1. Immediate suspension of Project 26 pending community consultation
2. Development of a comprehensive asset optimisation strategy
3. Implementation of operational efficiency measures
4. Exploration of innovative financing solutions within legislative frameworks
5. Greater transparency in council’s financial decision-making processes
6. Assurance from Council that any contrinutions from sale of assets only be used in other property acquisitions and fund to be protected to only be used for that purpose similar to Developer Contributions.

Conclusion

Liverpool Council’s consideration of mass property sales represents a concerning departure from responsible asset stewardship. While budget challenges are real, selling community assets is akin to selling the family silver – a one-time solution that leaves future generations poorer. Our council needs to demonstrate more creativity, responsibility, and long-term vision in its financial management.

The community deserves leaders who can find innovative solutions to financial challenges while preserving our collective assets. It’s time for Liverpool Council to show such leadership rather than taking the easy path of asset disposal.

We had a great discussion regarding this on the Pulse this week Feel free to call our studios on Thursdays between 9am-11am on 9822 8893 to have your say. Listen back to our discussion here