The NSW government has abandoned its financial responsibility for the area surrounding Lake Illawarra, heaping millions of dollars in additional burdens on to cash-strapped Wollongong City Council.
A new report from Wollongong council staff reveals what had always been feared: that ratepayers would be saddled with maintenance and repair costs of lake assets following the state's axing of the Lake Illawarra Authority (LIA). The report shows that far from just replacing the LIA with a Wollongong and Shellharbour council-funded estuary management committee, the government plans to hand over more than $6.5 million worth of lakeside infrastructure to Wollongong council.
Staff say this will leave the council with no budget to fund unexpected maintenance, potentially leaving jetties, boat ramps, footpaths and other recreational facilities around the lake in disrepair.
The report shows the council will not be able to match the authority's previous funding, which totalled $71 million - including $41 million from the NSW government - over the past 25 years.
Staff estimate the routine maintenance of transferred Lake Illawarra assets will cost $495,000 a year, which can be funded under the current annual budget as the council previously allocated $500,000 to the LIA.
However, an annual asset depreciation of $175,000 and any extra costs or maintenance, such as those caused by storms, would not be funded. Further, the council would not have the ability to expand footpaths, playgrounds or cycleways around the lake or buy foreshore land to protect environmentally sensitive areas.
"It is clear ... that the core funding [typically ranging between $1 million and $2 million a year] provided to the LIA has been lost to the lake," the report said.
"This significant cut in annual funding to the lake will impact on the council's ability to support the continuation of previous LIA investment programs."
Despite these dramatic financial effects, staff have recommended councillors accept the government's asset transfer proposal, as not doing so could expose the council to public criticism and potential liabilities.
They also indicate the council would end up with the assets even if councillors voted not to accept them, saying they would be transferred to the Department of Trade and Industries as Crown Lands.
"It is expected that DTI would then gazette most (if not all) of these lands as public lands and directly appoint the council as the trustee for these public lands," the report said.
Councillors are set to debate the recommendations at Monday night's meeting.