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The Moruya Racecourse Sale - as clear as mud

by Patricia Gardiner

On 24th September last year, ESC voted to sell the Moruya Racecourse to Racing NSW for an UNDISCLOSED amount.

Submissions were sought from the community, but as the sale price was confidential(much like everything else at ESC), ratepayers had no idea whether ‘value for money’ was being achieved for the sale of this community asset. Hence, it was impossible to make an informed judgement/submission as to whether it was a good idea to sell or not.

As Councillor Mayne explained,

“We(councillors) can’t tell the community the price. It’s like saying, I’ll sell your house but I can’t tell you for how much. Have we short changed our community of a major asset?

He was also concerned that the sale price(known only by councillors) was far too low and that such a prime piece of real estate on the south coast next to an airport could be worth considerably more in the future, particularly to a developer.

It was generally accepted/assumed/estimated by the community that the Racecourse sale price would have to be at least over $1 million.

However, emails to the General Manager, expressing concern that council had only used one valuer to establish the market value, revealed the fact that the sale price was below $1 million.

This is because council’s Land Acquisition Policy requires land worth over $1 million to have 2 valuations or 2 valuers.    

Rather than the sale going through an open competitive process, councillors delegated authority to the General Manager to finalise the sale through ‘direct negotiations’ with Racing NSW(Councillors Mayne & McGinlay voted against this motion).

According to the ICAC ‘Direct Negotiation Guidelines for Managing Risks 2018’, the problem with ‘direct negotiations’ is that it is prone to corruption as it is not an open or transparent process and it “can be detrimental to the public interest by undermining the potential for government to realise the full value of public assets.”

Council’s are therefore required to have a policy in place to ensure “probity  principles” are being met and the process is documented.

ESC has a ‘Land Acquisition and Disposal Policy’. Section 4.4  Probity Plan states:

“Where land is being sold by Direct Negotiation, a probity plan will be developed to cover the following matters:

a) obtaining best value for money

b) demonstrating accountability and transparency

c) dealing with conflict of interest

d) providing a fair chance for all to participate.........”

So, on 28 Sept I emailed the General Manager(and councillors) asking:

Did council develop a ‘Probity Plan’?

If so, was it provided to councillors?

Could you please provide me with a copy of it?

Response on 11 October:

“Yes, a Probity Plan has been completed. A copy of the Probity Plan will remain Commercial in Confidence.”

No mention was made as to whether councillors were provided with it. Councillor responses show they were not provided with it.

I then made a formal GIPA request($330) for the Probity Plan as well as other information re Racecourse sale on 23 October.

Response to GIPA Request(4 Dec) re Probity Plan:

“14. At the time of receiving the Application on 23 October 2019, my searches of Council’s records were unable to locate the following information requested under the Application:

14.1. Item 4. Probity Plan. A ‘Probity Plan’ document was not found in Council’s records.

14.2. I internally consulted relevant Council officers who advised that the probity plan was developed and executed by following Council’s Land Acquisition and Disposal Policy (‘the Policy’) to ensure that all relevant matters required by the Policy to be covered by a probity plan were addressed. They advised that the probity plan was not documented as a written record, however Council’s Procurement team had conducted a detailed review of the probity plan in October 2019. The review confirmed that all matters required to be covered by a probity plan had been addressed in compliance with the Policy.”

(HOW DO YOU REVIEW A PLAN THAT IS NOT A WRITTEN DOCUMENT? CURIOUS!)

“14.3. I reviewed the Policy, which at clause 4.4 states:

‘a probity plan will be developed to cover the following matters:

a) obtaining best value for money;

b) demonstrating accountability and transparency;

c) dealing with conflict of interest;

d) providing a fair chance for all to participate.

14.4. The Policy does not require the probity plan to be documented or recorded in any specific format. It is reasonable to accept the advice obtained during internal consultation that the probity plan was executed by following the existing Policy, and was not documented as a separate record.

14.5. The requested information was not therefore found to be held in a record of Council.”

Such admissions are of serious concern.

ICAC has found that, “officials and counterparties involved in corrupt transactions strongly resist accountability and transparency measures. They fail to give reasons for their decisions, fail to keep or provide records and seek to minimise the number of people that have visibility over the process.”

“Thorough documentation in direct negotiations is critical. All key events and decisions must be documented.”

“In addition to being complete and accurate, records also need to be discoverable, ......... properly titled, classified and stored......... and machine searchable.”(Guidelines Chapter 3)

It would appear that ESC has failed to comply with the ICAC Guidelines.

My formal GIPA request also sought: the name of the registered valuer, the valuation and the sale price.

I was told this information would be provided to me on settlement of the sale.

As it had been 9 months since council resolved to sell the racecourse and I had not been contacted, I emailed the General Manager(15 June):

“I write seeking verification as to the settlement date for the sale of Moruya Racecourse.

What was/is the settlement date?”

Response(29 June):

“Contracts have been exchanged for the transaction but it has not yet settled. I cannot give an exact date but it will be within the contract terms with Racing NSW.”

How very curious. When were the contracts exchanged? Why is it taking so long to settle?  Why is there no settlement date? What conditions? Were councillors aware of these conditions as no concerns were raised about them at the Sept. council meeting?

I looked up council’s Contract Register for Class 2 Contracts(value over $150,000 and ‘directly negotiated’) – No entries.

As the contracts have been exchanged there should be some information entered(GIPA Act 30,32), excluding any confidential information.

Information that should be on the register: reasons why contract/provisions have not been entered, whether the contract will be included and when.

Has ESC failed to comply with the GIPA Act?

The 2020-21 Budget shows $780,000 income from asset sales. Is the Racecourse sale part of this income? If not, what possible reason could there be to delay payment for over 21 months?

So many questions, ‘bugga all’ answers.



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