While ink has not yet hit paper for the sale of Bluebush Village workers accommodation facility in Kambalda, Shire of Coolgardie president Paul Wilcox says he expects the contract to be finalised in the next few weeks.
The Coolgardie council in March endorsed the sale of the village and adjacent land to mining company Westgold Resources for $22.055 million.
Cr Wilcox told the Kalgoorlie Miner this week no money had exchanged hands yet, but he was not anticipating any issues preventing the contract being signed — and estimated it would happen in mid-May.
“It’s sort of at that point where council’s done everything that council needs to do, and now it’s the administration that steps in and does the rest of it,” he said.
“And then the next conversation is about what we do with the money as far as debt reduction.”
At this week’s ordinary council meeting the shire’s updated long-term financial plan was endorsed, providing a roadmap to address financial challenges, repay debt, rebuild reserves, and deliver community aspirations.
The plan projects by 2036 the shire would reduce borrowings from $25.71 million to zero, grow reserves from $0.62m to $5.78m, cash flow to $9.37m, unrestricted cash to $3.6m, and have an average capital investment of $10.52m.
It includes a loan repayment plan for the $9m in debt that will remain once the $16m debt from Bluebush is repaid with the $22m sale of the village.
“Before we sold the village, when those interest repayments were about to kick back in once we had the principal, we were looking at $1m to $1.5m a quarter as repayments,” Cr Wilcox said.
“And now . . . it starts off next year at about $400,000 as an annual payment rather than a quarterly payment, and then it ramps up a little bit over the course of 10 years, up to maybe $900,000 in the final year.
“Given our rates base is around about $16m at the moment, to pay $5m a year when you’re only getting $16m a year through the door, that’s a bit tough for us.
“Whereas $16m and then repaying $400,000 or maybe up to $900,000 is a much more feasible proposition that we can structure for and continue to offer the services that we’re offering, while making sure things are sustainable.”
Cr Wilcox said the council would then need to decide what to do with the extra money from the sale of the village.
He said there were several options, including paying off more debt — which would leave residual debt at about $5m — or investing it in something else.
With the village as one of the main money generators for the shire, Cr Wilcox said there could be investment in the airport, or the class three waste facility to help with revenue.
As the shire looks at its community strategic plan, Cr Wilcox said he was interested to hear from the community about what priority areas the shire should focus on.
He said he planned to bring a few ideas to the community but was open to hearing their ideas for the future as well.
“If we get a clear voice saying, ‘do not do that’ that’s fair, and then we can ask ‘OK, what should we be doing to diversify our income base?’” he said.
“There was a reason why the camp got built in the first place, there was obviously a need to increase income and it’s no longer there anymore.
“We are now in that position again where we are able to reposition and perhaps finance things in a more sustained way and not agree to such adventurous repayment schedules.
“Possibly we do a few smaller things at once so that if things don’t work out, it’s not just a single project that you’re relying on the success of to continue things into the future.”
The LTFP also includes an annual rates increase cap of 4 per cent — which could change in the future — and would improve the shire’s Local Government Financial Indicator score from 27 in 2024 to 96 in 2036.
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