The Village Green Community Foundation chair asked whether Mr Gangell was aware of the City of Swan’s Lehman Brothers Holdings $9 million debt and whether the Town’s $50 million worth of assets were protected if amalgamation went ahead.
‘Bassendean should be ‘amalgamation ready’ by protecting its $50 million in community assets with a perpetual trust,’ Mr Yates said.
‘The Hester Property Solutions Report on the Town’s land assets seems to be a secret plan of the Bassendean Council.’
Last week, councillors passed the Officer Recommendation, which included that if the Town were not to remain independent it would prepare a submission to the Local Government Advisory Board proposing to undertake a voluntary amalgamation with Swan.
The decision followed a Council survey which suggested that 64 per cent of the respondents wanted the Town to remain a separate council and 46 per cent would prefer Bassendean merged with Swan.
Cr Gangell recently expressed his preference to merge with Swan ” as opposed to the City of Bayswater ” at two meetings with Local Government Minister Tony Simpson on May 29 and June 11.
Bassendean chief executive Bob Jarvis refuted Mr Yates’ claim, saying the City of Swan did not have debt relating to investments.
‘Approximately $10 million of investments was written off in 2007-08 and 2008-09,’ he said.
‘Since that time, the City of Swan has recovered $5.6 million and will recover more as a result of a class action it has led.
‘In addition, the City of Swan is leading further legal challenges against Standard and Poor’s Rating Agency as well as Lehman Brothers Asia.
‘Any amounts recovered are written back to profits and available to be utilised for services and infrastructure, as the potential losses were accounted for back in 2007-09.’
He said the litigation, led by the City of Swan, has already resulted in more than $200 million being recovered by Australian local governments, charities and church groups. The figure is likely to be greater than $400 million when all legal actions are finalised.
Mr Jarvis said the City of Swan had a strong financial position and significant cash.
As at May 31, it had $83.8 million of cash and investments.
In addition to its financial position (balance sheet), it had budgeted and achieved healthy profits and surpluses over many years.
‘I was aware that the City had substantial cash reserves, and I am also aware that they have assets valued in the billion plus,’ he said.
Mr Simpson said he was aware that a number of councils were considering putting proposals to the Local Government Advisory Board before the Government’s preferred model for metropolitan local government reform was announced.