You may have recently received a letter or seen a news article from former Councillor Jeff Johnson opposing Council’s proposed Special Rate Variation. Several of you have emailed me repeating some of his claims about Council’s financial situation and assertions that Council can avoid the rate variation while still delivering the same level of service to our community. Given that many of the claims made in this letter are untrue or deliberately manipulated, I felt like it warranted a response.

In his letter, Jeff claimed that “Council has banked $10 million of rates in term deposits”. This is false. It is true that Council has cash investments ($116m at last count) and it’s true that they are held in short term deposits, but this money is not rate income.

There are lots of reasons why Council has cash in the bank. For example, when we receive a large grant or profits from the sale of land, we need to put it somewhere until it is spent. Surely residents would not begrudge Council such as basic financial strategy as putting cash in term deposits to maximise interest instead of it sitting in the bank?

While the total value of Council’s cash investments might sound substantial, it’s worth pointing out that the value of cash investments held by Council decreased by $18m between 30 June 2023 and 30 June 2025, as Council expended funds on key infrastructure projects.

When these cash investments do earn interest, it is distributed to a range of reserves. Some of these are restricted by legislation and the others are quarantined by Council to fund community projects and services, such as the aptly named Community Infrastructure Fund.

Here are some of the things this fund has been used for recently:

• The new Ballina SES Building
• The new Ballina Pump Track
• The soon to be built Alstonville Cultural Centre

Some money is also held in reserve to fulfil long term financial obligations, such as long service leave or rectifying quarries. Some is also placed in a Property Development Reserve, which is used to fund Council’s commercial investments. Contrary to Jeff’s claims - income from ordinary rates is not used for commercial investment activities. Council uses profits from commercial developments to fund capital for future commercial investments.

It is true that Council has a large commercial and residential property portfolio. It was most recently valued at $29m. This includes land that we sell or develop and lease. Key investments include land and buildings in the Southern Cross Industrial Estate, the Russellton Industrial Estate and our residential land at Wollongbar and Lennox Head. Increasingly, as this property portfolio is exhausted, we are gearing our investments to generate recurrent income. For example, we are about to embark on an exciting project to construct rental housing on Council land in Wollongbar.

These investments and the income they generate provide significant value to ratepayers and are the reason why Ballina’s rates are 11% lower on average than similar sized Councils in NSW and significantly lower than our neighbouring coastal Councils. They should be celebrated, not criticised.

Jeff’s suggestion that Council should whittle down its cash and property investments to directly fund recurrent services makes bad financial sense.

It’s like suggesting that someone to tap into their super to pay their rent. It might seem tempting but it’s going to come back to bite you in the long term.

Land sales and interest from investments may supplement rate income and keep rates low but they do not replace the need for a sustainable rate base. In addition to one-off infrastructure projects, Council needs funds for recurrent expenses, including loan payments, salaries, maintenance of our huge asset base, waste collection etc.

It is these recurrent expenses that our current rate base cannot meet, evidenced by cumulative operational losses for the last five financial years totalling $9.4m. If the profits from one -off land sales are excluded, the accumulated losses for the same period are $26.2m.

Jeff refers to Council having a $12 million "cash surplus" - deliberately ignoring a fact that any Councilllor is well aware of, that around 20% of Council's budget is non-cash items, mainly depreciation, or the cost of maintain hundreds of million dollars of assets like roads, playgrounds, vehciles, buildings, stormwater and wastewater infrastructure etc. To ignore this very real expense is suggesting that Council should cease maintaining the assets it owns.

Jeff suggestion that Council is inefficient and wasteful and that a 1% “efficiency gain” could remove the need for a rate rise is also false. Council is constantly pursuing efficiency gains, including:

• Reducing water leaks by 50% representing additional revenue of more than $1m.
• Improved practices in the re-use of materials in the road reconstruction area has achieved savings in the hundreds of thousands of dollars in reduced transport and landfill fees.
• Privatising Council’s waste collection, resulting in over $1 million in savings with no reduction in service and reducing the collection of landfill bins from weekly to fortnightly.

Ballina Council already has less staff per resident than other Councils, the vast majority of which work in field roles. Jeff’s suggestion to further reduce staff would directly result in a reduction of services, including maintenance of open spaces and assessment of development applications.

In conclusion, Jeff’s claim that Council can somehow maintain its current level of service to the community without a modest rate increase is a fantasy. I find this level of financial acumen deeply concerning coming from someone who I once supported to become our Mayor.  

Residents deserve a Council that demonstrates sound financial stewardship. Not one that makes bad short term financial decisions just to win a political popularity contest.

The special rate variation has been consistently recommended to Councillors, not only from staff, but from our Independent Audit, Risk and Improvement Committee. Even if it is implemented, it will not eliminate our funding shortfall. Council will still need to make further savings to allocate additional funds to asset renewal.

If you want to read more about the financial challenges facing the local government sector, I recently wrote a blog about it here.

Sincerely,

Councillor Kiri