BATHURST council will be able to use money from its sewer fund to make up for a lack of land sales.
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In May, 2024, the council agreed to seek to borrow a total of $25 million from the sewer fund, which would be used to manage its operating costs.
Initially, the council only planned to seek a $15 million loan, which it was already in the process of applying for before its decision in May to chase an additional $10 million.
Before any money could be borrowed, the Minister for Local Government had to approve the internal loan, and that ministerial approval came in mid June.
Council's director of Corporate Services and Finance, Aaron Jones, confirmed the news during the June 19, 2024 meeting.
"That basically covers our cash funds from that cash flow shortfall that we were initially projecting to June 30, so that restored that cash to be in a more positive position," he said.
How the loan works
Speaking at the May 15 meeting, Mr Jones said the council's intention is to pay back the loan within five years, utilising the money from land sales as they eventuate.
"Our intention is to pay it off as soon as practically possible," he said.
![The Bathurst council chambers. Picture file The Bathurst council chambers. Picture file](/images/transform/v1/crop/frm/gfyFBZ2A3aREPWrpf4KzA3/4c1447dd-90f3-4a5d-8515-6fe20af1a82a.JPG/r0_0_4176_2784_w1200_h678_fmax.jpg)
While money would be borrowed from the sewer fund, it would not deplete that fund entirely, ensuring there is money available if there were to be a major failure.
Mr Jones said it was better for the council to borrow money internally than to seek a loan from a major bank, citing the ability to negotiate shorter terms, different payment arrangements, and a reduced interest rate.
It also becomes an investment for the sewer fund, which sees a return through the interest the council would have to pay on the loan.