City of Bayswater adopts first loan borrowing policy

Maylands Peninsula. Picture: Kristie Lim
Maylands Peninsula. Picture: Kristie Lim

THE City of Bayswater – the first WA local government to become debt-free – has adopted its first Loan Borrowing Policy.

In 1988-89, the City became debt free when the late John D’Orazio was mayor, after several years of strict budgeting.

At the November 27 council meeting, the council voted 7-2 to adopt the policy, which provides guidance for borrowing money to fund capital works and assets.

Deputy Mayor Chris Cornish and Cr Elli Petersen-Pik voted against.

The policy’s main guidelines include stating borrowings would only be considered to fund new or major assets, the council would not enter into any interest-only arrangements and the term of the loan not exceeding the economic life of the asset.

Chief executive Andrew Brien will be provided delegated authority to accept loan offers from the WA Treasury Corporation.

Cr Giorgia Johnson said the policy did not change the City’s debt-free status but it did allow the City to borrow money when needed, with safeguards around specific projects.

Cr Barry McKenna, who has been a councillor for 27 years, said in the past the council borrowed money from aged care to fund capital works including Bayswater Waves.

“We went several years with no footpaths and limited building,” he said.“It was a mismanagement of council at the time when interest rates were at 18 per cent and they were borrowing heavily to fund infrastructure projects.

“I am quite happy to have it there as something that is an option … I am not in a rush to use that option though but I still like it to be there.”

Cr McKenna said he was concerned about the long-term financial commitment to the Maylands Waterland, Maylands Lakes and Bayswater Waves.

Cr Cornish said governments, particularly State and Federal were not very good at handling debt.

“Give me a business case of ‘let’s buy this property’ and then I’ll say yes,” he said.

“I am not just going to open up the door to say ‘council can now borrow money’.”