Newcastle council will write to the Local Government Minister asking for all councils' infrastructure backlogs to be officially audited in future after another spirited debate over the issue on Tuesday night.
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The Newcastle Herald reported on Saturday that City of Newcastle had wiped $101 million off its backlog after changing what it includes in the figure.
The condition of the city's roads, drains, footpaths and other assets is measured in its annual financial statements against an Office of Local Government five-point scale of very poor, poor, satisfactory, good and excellent.
"Satisfactory" on the scale is defined as "maintenance work required".
In previous years, City of Newcastle has included assets in the three lowest categories in its backlog, but it said last week that it had included only the two bottom categories this year in line with changes in the OLG's Local Government Code of Accounting Practice.
The code says the state of assets "should be measured against the condition 2 rating of 'Good'", and the OLG said last week that it had not changed its guidelines.
Newcastle's new reporting method cut its roads renewal backlog from $45 million to $1.8 million.
Chief executive officer Jeremy Bath defended the new reporting method at Tuesday's meeting.
He said the backlog calculation was "in accordance with the code" and that it would be "frankly illogical" to include assets in the middle "satisfactory" category in the backlog.
He said the council held $137 million in restricted reserves to address the backlog as of June 30.
"We have more than enough money in restricted reserves to fund the infrastructure backlog," Mr Bath said.
" ... If you want to rip and rebuild an asset that we've already conditioned as being satisfactory, we have enough money in restricted reserves to do that.
"So there can be no question that we are failing in our duties or in the long-term financial plan.
"We have the money in the bank ... we cannot spend it for any other reason."
The council's infrastructure backlog ratio, a measure of how much it needs to spend to basic assets at a satisfactory level, was 11.59 per cent last year, well above the 2 per cent limit prescribed by the Independent Pricing and Regulatory Tribunal.
It would have risen above 13 per cent this year without the definition change but is now 3.48 per cent.
The backlogs are not included in mandatory audits of NSW council finances, but deputy lord mayor Declan Clausen moved successfully for the council to ask the minister, OLG and the Auditor-General to include them in the future.
"It is disappointing that there has been some confusion in the community," he said.
The lack of an official audit for the backlog "means that there is a question mark over the validity of the information when you're comparing councils against councils".
The council's maintenance and renewal spending has been the subject of political battles and staff concern for several years.
Cr John Church (Ind) said the change in reporting "feels tricky and sneaky" and called unsuccessfully on the council to revert to its previous method before the financial statements were submitted to the OLG.
Greens councillor John Mackenzie, a member of the council's audit and risk committee, said the committee members were "very comfortable" with the change in how the backlog had been calculated.
He said it was regrettable that the council was having a "deeply politicised" discussion about a figure which is "only there to serve as a performance measure".
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Michael Parris
Michael Parris reports on politics for the Newcastle Herald. He started at the Herald in 1994 after working in the ABC Newcastle newsroom. Michael spent much of his career as a sub-editor before moving into political reporting in 2017. He was a finalist in the Sports Australia national media awards for his stories about a male-only tennis club in Newcastle. He has covered NSW and federal elections, state and federal budgets and local politics. He has also written extensively about the COVID-19 pandemic with a special focus on data analysis and the effects of lockdowns on the Hunter community.
Michael Parris reports on politics for the Newcastle Herald. He started at the Herald in 1994 after working in the ABC Newcastle newsroom. Michael spent much of his career as a sub-editor before moving into political reporting in 2017. He was a finalist in the Sports Australia national media awards for his stories about a male-only tennis club in Newcastle. He has covered NSW and federal elections, state and federal budgets and local politics. He has also written extensively about the COVID-19 pandemic with a special focus on data analysis and the effects of lockdowns on the Hunter community.
