RICHMOND Valley Council has cancelled this week's sales at the Northern Rivers Livestock Exchange (NRLX) following Casino livestock agents' opposition to its imposition of new fees to help pay for the major upgrade of the Northern Rivers Livestock Exchange.
At issue is the fees and charges structure, in particular a new business usage fee of $1 per head of cattle.
After months of negotiations the Casino agents last week refused to sign the new agreement to pay the extra $1 per head of cattle sold.
The capital upgrade is now under way and expected to be complete by next year.
The stand-off could threaten the council's financial position, which includes debt of $3.5 million borrowed to fund the total $14 million upgrade of the facility. The remaining $7 million was provided by the State Government last month, plus $3.5 million from the Federal Government.
Council general manager Vaughan Macdonald said the council had been left with no choice but to cancel next week's sales after the five agents refused to sign permits.
"At some point in time we needed to draw the line," he said. "Unfortunately that line was reached.
"We'd prefer it was resolved but for that to happen there needs to be some willingness to compromise."
But Casino Auctioneers Association president Matthew McCormack said the fee increase on agents and vendors was unfair.
He said the $1 per head fee would have sent his annual bill skyrocketing from $3600 three years ago to $44,500 this year.
He said where other facilities had similar fees, the facility owner paid for the saleyard workforce.
Rising vendor fees were also an issue, having risen from $9 a head two years ago to $12.50 this year.
Mr McCormack said the council was "dreaming" if it thought vendors deserved to pay more before the facility was fully built.
Richmond Valley mayor Robert Mustow has backed the fee increase, saying the Casino saleyards had to operate as a self-sustaining business unit to avoid an impost on ratepayers.
The council conducted a public consultation over the fee changes in April before putting the proposal on public exhibition.
It was passed in June.
Last year the saleyards returned more than $113 million - up from $87 million the previous year on the back of high prices.
The number of cattle sold was also up 13.5%.
However, the result was a deficit of $687,000.
Mr Macdonald said the deficit was the amount after capital deductions and the council had already spent $2.6 million on improving " space="1" the facility.
He said other saleyards across the state had similar fees and when finished the complex would be one of the best in Australia.
"The way it has been done here for 35 years is that they pay next to nothing, and we're moving to a user pays model so the general ratepayer isn't called upon to fund the difference," he said.
Mr Macdonald said the adjustments to the fees and charges in the 2017-2018 Revenue Policy, which came into effect on 1 July, were an important step to achieving improved results for the NRLX, to enable the business to fund the loan repayments and avoid any reliance on ratepayers' funds.
He said no one liked a fee increase, however, Council needed to address not only the revenue side of the business, but also the cost side to the equation.
Council had met with agents on multiple occasions, he said and had stressed the importance of the revenue policy decision being upheld.
He said like in any other business, Council had to have the financial means to take care of the viability and longevity of this important sales venue.
"Last year the Richmond Valley community made it clear that Council should retain ownership of the NRLX," Mr Macdonald said.
"This meant a number of changes for the facility. To upgrade, funding was needed. The Federal Government agreed to a $3.5 million co-contribution, meaning Council had to borrow $3.5 million to start stage one of the upgrade. Fortunately, the NSW Government has also come on board, promising $7 million to complete the $14 million project.
"By the end of next year, the NRLX will be recognised as one of the best saleyards in Australia with high standards of animal welfare, improved work health and safety conditions, quality effluent disposal, convenience for users, and efficient management systems."
Mr Macdonald said the $113,616,791 sales turnover year to date was a record result, up from $87,950,124 last year.
He said this provided excellent returns for the region's beef producers and businesses operating out of the NRLX, as well as delivering an important economic stimulus into the Richmond Valley local economy.
However, he said while recent operating results were favourable, the NRLX required significant cash outflows in future budgets to fund the upgrade of the facility and subsequent increases in depreciation, and loan principal and interest repayments.
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