NEW England mayors have welcomed a decision by Local Government Minister Ron Hoenig to suspend the board of the New England Weeds Authority and appoint an interim administrator.
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Mr Hoenig said he decided on immediate action after being "alarmed by reports about the financial mismanagement and governance issues" of the authority.
"The problems are of real concern, particularly given the potential impacts the financial instability of [the authority] has for its four member councils which help fund its operations," Mr Hoenig said.
The authority is financed by Armidale Regional, Walcha, Uralla Shire, and Glen Innes Severn councils. Its sole purpose is to control invasive weeds in the New England.
The administrator, local government expert John Rayner, will probe financial and operational concerns and report back to Mr Hoenig.
Walcha Mayor Eric Noakes and Uralla Shire Mayor Robert Bell both welcomed the appointment of an administrator to the weeds authority and agreed the decision had been a long time coming.
Mayor Noakes said for Walcha ratepayers, the latest concern with the weeds authority came to a head in March.
Then, the authority approached Council to act as a guarantor for a loan of $119,843, that being Walcha Council's share of a $700,000 loan spread across Walcha, Uralla, Armidale and Glen Innes. The request was refused.
Part of the loan was to fund the authority's new depot, built by Rice Constructions at the Armidale Airport precinct.
According to a report before Walcha Council, the weeds authority has been unable to borrow the money to pay for the building while also paying for continuing operational costs.
Mayor Noakes said he was furious the weeds authority had voted to accept the tender and start construction of the depot despite being warned the project needed a capital expenditure review be submitted to the Office of Local Government before the project began.
"This was not done," Mayor Noakes said.
"The councillors, the general manager and the contract chief financial officer were also warned that there were not enough current assets available to complete the project."
A subsequent, extraordinary meeting of the weeds authority with its six councillors and general manager Tim Weeks took place in April behind closed doors.
Chair of the weeds authority is Armidale Cr Dorothy Robinson, deputy chair is Uralla Cr Tim Bower. Other councillors are Troy Arandale (Glen Innes), Paul Packham (Armidale), Margaret O'Connor (Armidale) and Scott Kermode (Walcha).
On Friday, May 17 weeds authority chair Dorothy Robinson said the board supported the appointment of the administrator.
Here is Cr Robinson's full statement:
"On April 29, the board of the New England Weeds Authority supported the appointment of an administrator to help overcome impenetrable regulations about whether county councils can borrow money and unhelpful regulations requiring NEWA to carry out inspection and control weeds for 11 months before receiving anticipated Weeds Action Program funding for this work.
NEWA was initially advised that WAP payments would be delayed from September to December 2023 due to treasury delays, then February and then March 2024 (due to "legal documentation issues").
Urgent representations were made on February 23 to the Minister for Agriculture and Regional NSW, but no direct response has ever been received, only automatic acknowledgements.
NEWA staff were later advised that a grant application would be required for work done since July 2023.
That application was submitted by the due date (April 12), but no funds have yet been received.
It is understood that at least one other weeds county council is also suffering severe cash-flow problems.
NEWA's cash-flow problems were compounded by a decision to enter into a fixed-price contract to build much-needed new premises.
This contract, at a time of substantial increases in building costs, undoubtedly saved NEWA hundreds of thousands of dollars.
At the time, the board was unaware of any impediments to borrowing money, or using buildings as security, as is the norm for any commercial organisation.
Negotiations were underway with the NSW Government's financial service partner, TCorp, after the previous NSW government announced in early 2023 that county councils would be eligible for TCorp loans.
However, the NSW Government has not yet enacted the necessary legislative changes to allow county councils to access TCorp funding, so NEWA negotiated a bank loan with security guarantees for the full loan amount from three of the four member councils.
"However, perhaps because of the unfathomable borrowing regulations for county councils, the bank also wanted approval from the Office of Local Government for the loan, something the OLG does not normally do.
"When these difficulties became apparent to the board on April 29, they supported the appointment of an administrator to expedite the approval of the loan.
"NEWA's Board had been made aware of problems with the 2022-23 financial statements, but were assured in November 2023 by the general manager that new financial procedures would prevent a recurrence of any problems.
As noted above, NEWA's board supported the appointment of Mr Rayner and will work with him to ensure NEWA's problems are solved as speedily as possible, so that NEWA's critical services can continue to serve the best interests of our Region and NEWA's member councils."
