The state government have asked the city to return interest accrued from Royalties for Regions funding allocated to the Busselton foreshore redevelopment.
The city received $4.5 million from the previous state government in June 2016, and as of May this year had accrued $102,888 in interest.
The city wrote to the Department of Primary Industries and Regional Development asking if they could use money from the interest accrued towards a toddler’s playground.
A letter to the city from the department stated the government were unable to support the expenditure of a playground due to pressures on the state budget.
The department advised the city $50,000 of the interest could be used towards Busselton Jetty Inc’s proposal to build a swimming area at the end of the jetty provided the group were successful in receiving a federal grant.
Busselton Jetty Inc are waiting to find out if an application for funding through the Federal Government’s Building Better Regions Fund has been successful.
If Busselton Jetty Inc are unsuccessful the city will have to return all the interest to the state government.
During the council’s agenda briefing on Wednesday financial services manager Kim Dolzadelli told councillors in the past interest accrued from Royalties for Regions funding had been kept by local governments.
When questioned, Mr Dolzadelli said he was not aware of any other local governments being asked to return interest from Royalties for Regions funding.
Minister for Regional Development Alannah MacTiernan said the use of interest accrued on Royalties for Regions funding required an agreement with the state government before it was used.
“Given the significant budgetary pressure facing the state, I think it is prudent that, on a case-by-case basis, we take a close look to ensure any left over funding is being put to best use,” she said.
Councillors will be asked to vote at next week’s meeting whether they support the idea or return all the interest accrued to the state government.
