In a letter to Shoalhaven City Council from the Department of Local Government, which was made public on Friday, director general Garry Payne referred to sections 435 (1) and 435 (2) of the Local Government Act.

Under Section 435 (2) “A departmental representative may also surcharge on a councillor, the general manager or any other member of the staff of the council the amount of (a) any deficiency or loss incurred by the council as a consequence of the negligence or misconduct of the councillor, general manager or member of staff.

Earlier in the letter, Mr Payne warned that departmental investigation into the Huscorp deal had “revealed that some if not all of the land that council has resolved to sell to Huscorp is classified as community land under the Local Government Act 1993. This resolution to sell appears to be a direct contravention of section 45(1) of that Act, which provides: ‘A council has no power to sell, exchange or otherwise dispose of community land.’”

Mr Payne went on to warn that a breach of section 45(1) may constitute misbehaviour under section 440F of the Act.

In the letter, that was released to the South Coast Register under Section 12 of the Local Government Act, Mr Payne outlined numerous concerns about the Huscorp deal.

These included:

• a lack of any documentation explaining why council had invited Huscorp to present its development proposal when the company did not lodge an expression of interest on the advertised proposal by the advertised deadline;

• the apparent lack of a documented account of the basis on which council selected Huscorp as the preferred purchaser of the site;

• the lack of explanation as to why council was prepared to sell council owned land at a substantial discount on the market valuation;

• the lack of explanation as to why council was prepared to grant Huscorp an easement over the city administrative centre site without payment despite a valuation report indicating that the value of the right of way was substantial;