Thursday 31 July 2014

Is QVM Funding At Risk?

It was reported in Wednesday’s Herald Sun that funding destined for the QVM renewal has been diverted to refunding MCC parking fines and so we asked some questions.

The Melbourne City Council has been forced to refund more than $3.2m in parking fines because of an administrative error. It turns out that Council staff who issued infringements over a two year period were not technically authorised to do so. The un-budgeted expense (the refunds) will come from the Councils operating surplus and this is where QVM comes in.

The Melbourne City Council had decided to distribute any surplus from its operations to the QVM Renewal project. Essentially, what is left over at the end of the year goes to QVM funding. The $3.2m could have gone to the QVM project but now it won’t. According to the Lord Mayor, the surplus is a component of the overall funding but not a specific budgeted item, so it will not impact on the project.

Hopefully, that all makes sense. It is a bit like saving up for a holiday at the end of the year and then finding the kids need expensive dental work - not good either way.

POSTSCRIPT: - Our CEO has confirmed that this year’s expenditure plans won’t be adversely affected in any way and the CoM has released the following statement in relation to QVM funding - 

"In May 2014, Melbourne City Council committed to putting any underlying surplus from 2013-14 into a Queen Victoria Market Renewal Fund. This week, Council also voted unanimously to establish a trust to manage these funds. By establishing a trust Council has ensured this money is quarantined from other Council accounts. It is a clear demonstration of our commitment to the market renewal.

You may have seen media reports this week indicating that the City of Melbourne has decided to refund and withdraw a large number of parking fines due to an administrative error. Some media reported that the $3.2 million it will cost Council to refund and withdraw the parking fines was money that was expected to be invested in the Queen Victoria Market Renewal Fund. While this is correct, it does not in any way impact upon the longer term vision for and commitment to the renewal of the market.

Factoring in the $3.2 million cost to refund and withdraw the 34,800 parking infringements, the revised estimated underlying surplus for 2013-14 is $1.2 million. The $1.2 million will be invested in the Queen Victoria Market Renewal Fund.

While City of Melbourne will not be able to make the contribution to the Queen Victoria Market Renewal Fund it had hoped this financial year, it is important to remember that this is the first year of a long-term project to which the City of Melbourne is completely committed.

The renewal of the market remains a key Council priority. Despite the budget impact of this administrative error, the City of Melbourne remains in a strong financial position and is committed to progressing the renewal project without delay. This includes the release of a draft master plan by year’s end."

Have Your Say – click here.