Cessnock City Council has voted to proceed with a $6.5 million loan to fund critical bridge replacement projects and the capping of an old landfill cell, despite concerns from some councillors about taking on additional debt during ongoing financial challenges.

During Wednesday night’s meeting, councillors debated an alternative motion seeking to defer the borrowing decision until the council’s incoming General Manager commenced later this year and could undertake a full review of the projects and funding options.

The proposal, put forward by Councillor Jessica Jurd, argued that the new General Manager’s experience in financial management and major project funding could provide valuable advice before council committed to the borrowing.

“We’re asking to approve $6.5 million in new borrowing with a new General Manager about to commence who brings substantial expertise in this area,” Cr Jurd said.

“To me, it’s prudent and responsible to allow her to review these projects and provide her professional advice before we commit to this level of debt.”

However, council staff warned that delaying the loan could expose the council to significant financial, legal and operational risks.

EPA Deadline Looms

A substantial portion of the borrowing will fund the capping and closure of an old waste cell at the Cessnock Waste Management Centre, work required under conditions imposed by the NSW Environment Protection Authority (EPA).

Council’s Director of Works told the meeting the capping works must be completed by the end of 2026 to comply with the site’s environmental licence.

The General Manager cautioned councillors that failure to complete the work could result in severe penalties.

“We’ve been directed by the EPA to do that work under the protection licence,” he said.

“If we were to fail to do that and fail to meet, as a corporation, willingly and knowingly, the fines start at seven figures and potentially more.”

Bridge Projects Already Underway

The borrowing will also fund several bridge replacement projects, including the Doyle Street Bridge replacement, which has already commenced construction.

Council heard the Doyle Street project was originally expected to receive grant funding, however the application was unsuccessful.

The Director of Works said the bridge had been identified as council’s highest-priority bridge replacement project due to its deteriorating condition.

“It was at risk of having to close the bridge,” he told councillors.

A load restriction had already been imposed, and council faced a choice between replacing the structure or eventually closing it to traffic.

Other projects included the Bathurst Street and Ferguson Street bridge replacements, both of which have secured external grant funding requiring council co-contributions.

Staff warned that delaying the loan could jeopardise those projects and potentially risk future grant funding opportunities.

Cash Flow Warning

Council’s Chief Financial Officer warned that deferring the borrowing could create serious cash flow pressures.

The CFO told councillors unrestricted cash reserves were well below the proposed borrowing amount and council had already entered into contractual commitments.

“To do this, you’ll run substantial cash flow risk and legal risk in terms of contracted works that are currently underway,” the CFO said.

The finance chief also warned council was approaching a point where it could be forced to use restricted funds for general operational purposes if adequate funding was not secured.

Questions Over Long-Term Debt

Several councillors questioned whether borrowing was the most appropriate solution and raised concerns about the long-term impact on ratepayers.

Councillor Tracey Harrington said she would have preferred the matter be reviewed by the incoming General Manager but acknowledged concerns raised about council’s financial position and contractual obligations.

The CFO told councillors the loan had already been factored into council’s long-term financial planning and would allow the costs of major infrastructure and environmental works to be spread over time rather than requiring significant increases in waste charges or fees.

“People do not cop a disproportionate increase in fees to pay for a project that ultimately will last over 20 years,” the CFO said.

The council ultimately proceeded with the borrowing proposal after staff advised that delaying the decision could place ongoing projects, grant funding and regulatory compliance at risk.