General Manager warns of tough budgetary decisions
October 30, 2012
Shoalhaven City Council General Manager, Russ Pigg is warning the community that tough decisions will need to be made if Council is to restore the organisation’s long term financial sustainability.
Financial modeling contained in Council’s Long Term Financial Plan has found that Council will be unable to fund desired future Capital Works programs or increase spending on the maintenance and renewal of existing infrastructure assets without an increase in revenue.
Without an increase in rating levels Council would be forced to undertake a mix of other options to restore long term financial stability to the organisation.
These include -
• Significant reduction in services.
• Significant restructure and downsizing of the organisation.
• Reduced capital works program.
• Increased borrowings.
• Increase other revenue streams.
• Sell surplus Council property.
Mr Pigg said that it if Council chose to keep expenditure at similar levels without a significant revenue increase, current financial models estimate a budget deficit of over $8.2 million by 2017/18.
“The previous council adopted a Long Term Financial Plan with a cumulative deficit of $55 million after 10 years,” said Mr Pigg.
“The new Council will have to take a more responsible approach to its financial management given this scenario would be a complete financial disaster for the local community.
“While Council has already inbuilt decreases in operating expenses of $1 million by 2014/15 this is insufficient in trying to achieve a balanced budget.”
“Either this saving target will need to increase significantly of other revenues increased, with one option being rating levels.”
“This decision all comes down to community choice and if the Council wants to avoid rate increases then they need to identify which services it wishes to reduce or eliminate.”
“The previous Council did not provide adequate direction on this issue, simply planning for large unsustainable deficits in future years.”
Mr Pigg said that any proposed rate increases or drops in current service levels would be properly canvassed with the community prior to implementation.