A report in the agenda for Tuesday’s council meeting found an estimate was instead provided by a Deniliquin real estate agent.
Acting chief executive Brian Barratt provided the report which outlines two years of MRC’s dealings with proposed ethanol plant developer Murray River Energy.
It reveals the land on Mathoura-Line Rd, Moama, bought by council was chosen by Murray River Energy, which had requested council purchase the land and subsequently sell it to the developer. This was set out in a memorandum of understanding signed by both parties.
As reported in The Riv on August 8, the sale price of $1.219 million — confirmed by council — was thought to be well above land value alone.
“Chief executive officer Des Bilske … has confirmed the estimate was provided by Ray White Rural, Deniliquin,” Mr Barrett said.
“As the property was not on the market, the price potentially reflected what was required to convince an unwilling seller to relinquish ownership.”
“Good governance would normally dictate council seeks the advice of a registered valuer before acquiring land. However, it was advised at the time it considered this report, the subject land was not actually for sale,” he said.
Following the sale, a leaseback of the property to the owner was negotiated at $15 per acre for five years, with an option of a further five years.
According to the report, council obtained a current valuation from registered valuer Eishold, in July, which found the land value as farmland would be around $790,000, or for special uses would be $1.13 million.
It also found a rental price between $50 and $75 an acre was possible - meaning a total of at least $16,500 more a year than at $15 an acre.
Further to this, in November 2018 the council loaned Murray River Energy $460,000 to discharge a debt owed to Edward River Council through another investment vehicle, Dongmun Greentec.
The loan was secured by a first mortgage over land in Gheringhap, near Geelong, and the funds were paid directly to Edward River Council.
In March 2019, Mayor Chris Bilkey requested Murray River Council increase the investment to Murray River Energy up to $900,000, which was carried by councillors, with councillors Tony Aquino, Alan Mathers and Thomas Weyrich voting against.
Mr Barrett said all actions by chief executive Des Bilske were first authorised by council.
It comes as the project attracts growing public attention.
Nearby farmers put flyers in letterboxes around Moama, which farmer Kylie Berryman said aimed to make locals aware of what they considered to be a “gross misuse of ratepayers’ money” by MRC.
Ms Berryman said they had had a strong response, with people saying they were “absolutely disgusted” by MRC’s actions.
“A lot of them said it’s a hard pill to swallow at the moment, especially with the recent rate increase and to know they’ve been hiding this,” she said.
MRC declined to respond to questions put forward by The Riv.
“This matter is the subject of a detailed report to council next week and it would, therefore, be inappropriate to make comment prior to the matter being considered by council,” a spokesperson for MRC said.
MRC’s meeting at 6pm on Tuesday, August 25, will be livestreamed on council's website.
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