Tuesday night’s council meeting reversed its previous decision (or deferral of a decision) on the Dan Murphy’s development in Katoomba, and the shop will now go ahead.
This attracted media coverage on ABC 702 (it’s not 2BL anymore!) with Mayor Myles interviewd on Deborah Cameron’s show. You can listen here.
The Gazette reports here.
Following on from our earlier post on the debacle where BMCC had at least $11m invested with failed investment house Grange Securities, part of the bankrupt Lehman Brothers bank that was one of the biggest casualties of the global financial crisis.
The SMH reports that a class action of councils has been successful in a legal attempt to apply to Lehman Brothers administrators for recognition of their claims. In short, instead of being paid as little as 5c in the dollar, BMCC may realise a little more. Katoomba Leura Online understands the large anticipated loss has yet to be fully recognised in BMCC financial results, so future rate rises may be on the way.
In the 19 November 2008 edition, the Gazette reported that council had a number of investments with Grange Securities (part of Lehman Brothers) that had their value reduced.
The auditors at that time wrote down the value of the then $25m investment fund by $4.1m. The report also noted some direct investments in sub-prime mortgage CDOs, which it claimed would be repaid at maturity.
Recent reports in the SMH and Age newspapers show that BMCC losses could be much greater. A table from The Age shows that BMCC had $11.3m invested with Grange, and a 20 April 2009 report in the SMH states councils have been offered only 5.6c in the dollar repayment of their capital.
If this figure is accurate, BMCC faces losses of over $10m, or in excess of $800 per ratepayer.
In November, council suggested that these problem investments would come good, but current reports suggest that council may be forced to accept the 5.6c in the dollar payment, throwing the council budget into disarray for years to come.