Powerful argument

I’D like to correct some potential misunderstandings about the history of the 2007 Highgate East underground power project (“Resistance Fails,” Voice, March 25, 2023).

Mayor Cole is reported as suggesting that other ratepayers somehow subsidised underground power in Highgate East. She mentioned that the City borrowed $3.7 million so that some people could pay by instalment. This is not correct.

The $3.7 million was borrowed to pay Western Power while they were doing the work – it had nothing to do with property owner instalments. 

The money was spent by the time the City sent out bills to property owners.

The mayor also said that the interest on the loan was absorbed by all ratepayers. 

The fact is that the council at the time made it clear that the beneficiaries would pay the full cost, including interest on the loan – there would be no subsidy. 

This resulted in a ‘standard cost’ of $3,000.

Owners who chose to pay by instalment were charged an extra 7 per cent interest to cover the cost to the City of providing the instalment feature. 

The way owners were treated in 2007 is the same way the City currently deals with ratepayers who pay their rates by instalments.

They are charged interest to compensate the City for foregone interest that would have been received by the City if it could bank upfront payments.

If the 2007 owners were subsidised by the whole community, it follows that current ratepayers who pay by instalment are subsidised by the whole community, but I don’t believe they are.

Unfortunately the City seems to be using the popularity of underground power as a smokescreen to extract money from ratepayers. 

While some people are under the illusion that the 2.1 per cent rate increase will somehow reduce their cost of the underground power, the money is really there to provide bridging finance for the project. 

Instead of borrowing from Treasury at lowish rates they are borrowing from the Ratepayer’s Bank at zero interest.

The biggest concern is that the administration has also got the cart before the horse. 

Rather than develop a financial model, then work out sources of funding, they have started getting the money from ratepayers before they have developed the model.  One of the key inputs of such a model is how many people will pay up front.

It is vital, but the staff have not yet asked the community – even though work on the first area is due to start in six months.

While the mayor has made a commitment to make the financial model public, I doubt that we will get much detail, and I doubt that it will be very timely.

My sense of unease is increased by the fact that the City used to have a policy on underground power but the mayor and her followers got rid of it in 2019 on the basis that it was no longer required.

Dudley Maier
Highgate

Sent them a googly

OK. For your sins you’ve been long enough in Coventry. 

Some months ago this scribe spent some time sharing a hospital room with a fall victim in his nineties.

He believed that his mother, from Dumfries in Scotland, was probably the maid who spilled the Ashes from the urn that was displayed in Cobham Hall, Kent, UK, in the late 1880s.

Since putting this to sources in the UK there has been no response.

As always, best regards to all.

Ron Willis
Author: Cricket’s Biggest Mystery: The Ashes (Rigby, 1982)
City Beach