Bathurst Regional Council has confirmed that it will maintain its repayment schedule for a contentious internal loan of $4.5 million from the sewer fund to the general fund. This decision comes despite calls from some councillors to repay the loan earlier than originally planned.
The council initially sought approval for the internal loan in May 2025, aimed at preventing its unrestricted cash from falling into a deficit. On June 27, 2025, the Minister for Local Government approved the borrowing of $5 million, with the council drawing down $4.5 million by mid-July. The terms dictate repayment in quarterly installments over a maximum of five years, with an interest rate currently set at 4.10 percent per annum.
During the council’s ordinary meeting on July 16, 2025, Councillor Natalie Cranston proposed an amendment to formally adopt financial recommendations from the council’s Financial Sustainability Committee. These recommendations suggested using Financial Assistance Grant (FAG) funds for loan repayment. However, the council ultimately chose to note the information presented in the mayoral minute regarding the loan, without taking further action on Cranston’s proposal.
In a recent report to the council meeting on September 17, 2025, interim finance director Peter Smith reiterated that the loan would not be repaid early. The resolution states, “Council confirms that the $4.5 million internal loan from the sewer fund to the general fund is not repaid early; it is to remain payable over a five-year period to help address council’s cash flow issues.”
This report also highlighted advice from the Local Government Grants Commission regarding the unpredictability of FAG prepayments. Councils were cautioned against relying on future advance payments or their anticipated values. Smith noted that the council’s options for early repayment are restricted as it continues to review its income and expenditure.
Councillor Cranston has expressed her concerns about the internal loan, stating, “There is no room for grey now as to the intention of the loan. It is obviously finally acknowledging in what my mind was the intention all along.” Councillor Sophie Wright supported Cranston’s stance, emphasizing that the “exact intention” regarding the use of the loan is now clearly documented for the community to understand.
The council’s decision to uphold this repayment structure indicates its commitment to managing cash flow while navigating the complexities of internal funding and external grant dependencies.
