Lake Macquarie councillor Kevin Baker says he has "no regrets" about criticising the council's controversial $44 million internal loan scheme despite being found to have breached the councillor code of conduct.
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The Liberal councillor was formally censured by the council at last week's ordinary meeting after councillors considered the findings of an investigation into comments he made in February, when the Newcastle Herald revealed the council had drawn $44 million from its developer contribution fund for general expenditure.
Developer contributions are collected to fund infrastructure required as a result of new developments.
The council initially maintained the scheme was permitted under state legislation, but a developer's legal advice described it as "unlawful". State Planning Minister Rob Stokes said it was "an unacceptable breach of the public's trust and a misuse of public funds".
The Office of Local Government investigated the scheme, but told the Herald in April that the council had moved to "rectify the matter" by borrowing externally to repay the internal loan. It never made any findings from its investigation public, but said it would "monitor the council" moving forward.
Following the code of conduct investigation, Cr Baker was found to have breached three clauses by "making comments in the press and on social media" that suggested the council had "provided 'misinformation' about the internal loans scheme".
His comments "had the potential to significantly adversely affect the council's reputation and the reputation of council officers".
The investigation is believed to have been prompted by an anonymous councillor complaint. The investigator's report was discussed in a confidential session and is not publicly available.
Cr Baker stood by his criticism after the meeting, saying the use of the fund was "unlawful" and "illegal".
He said the council had "brought itself into disrepute" and that he was proud "to have fought for this money to be used for the betterment of our community". "I will always stand up for the rights of our community and call out council when it does the wrong thing," he said.
A Lake Macquarie council spokeswoman said it was "incorrect" to suggest the internal borrowing was "unlawful". "All borrowings are publicly considered and reported annually as part of our financial statements, which are audited by the NSW Audit Office," she said.
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