Great Lakes Council: Your council: Great Lakes Council - Achieving Sustainable Infrastructure, Services and Finances

Great Lakes Council - Achieving Sustainable Infrastructure, Services and Finances - Report Released

A report on the financial sustainability analysis of Great Lakes Council prepared by review Today Pty Ltd has now been released.

During 2007, Council engaged Professor Percy Allan and his company Review Today to undertake this analysis. Professor Allan is the author of the Independent Inquiry into the Financial Sustainability of NSW Local Government which was published in May 2006. This report highlighted the significant challenge across new South Wales local government authorities to fund ageing infrastructure assets such as roads, stormwater, drains, halls, swimming pools and bridges.

On the release of the report, Council's General Manager, Keith O'Leary, commented "Council is aware of the difficulties across the Great Lakes area in adequately maintaining these important infrastructure assets and sought Professor Allan's expert advice to assist in planning for future maintenance commitments. Professor Allan worked in conjunction with GHD and Access Economics to produce the report, which is in three parts being the Review Today Overview Report, GHD Asset Report and Access Economics Financial and Funding Analysis."

The key findings of the independent report include:

Council has $26m of physical assets that are in an unacceptable condition and need renewal. Unless Council increases capital spending by $6m a year on renewing other assets when they reach their use by date, the backlog of unsound, unsightly and unsafe infrastructure will escalate from $26m to $100m within 20 years.

Within ten years the infrastructure backlog will rise from 4.4% at present to 10.5%. Already over 13% of physical assets (worth $78m in replacement cost) are in a poor to very poor condition even though only 4.4% fall below the minimum standards set for different asset classes by Council. Unfortunately Council does not have capacity to fund the annual $6m renewals gap; it already has a shortfall in revenues.

Review Today is recommending that Council consult the community on whether Great Lakes residents, local businesses and visitors are prepared to tolerate a serious and sharp deterioration in local infrastructure and if not what can be done to find the resources to stem the decline. Review Today has modelled various Council spending, revenue and borrowing strategies for addressing the infrastructure problem and achieving an operating surplus that can be used for bolstering capital works.

The plan Review Today has proposed for discussion and debate in the community involves the following measures for the next ten years:

- Maintaining, but freezing services spending at existing levels;
- Increasing rates, fees and charges revenue by 5.5% per annum; and
- Borrowing an extra $40m to lift the Council's debt ratio to 10%, which would still be
consistent with a good credit rating.

On delivering his report Professor Allan stated "Such a strategy is not without pain on the revenue and services fronts, but adhering to existing policy will result in a serious degradation of local roads, footpaths, kerbing, bridges, buildings, stormwater drains, sea walls, recreation areas, parklands, natural environments and other assets that would threaten the beauty and attraction of Great Lakes.

"Unless the Commonwealth and State governments come to the rescue of local government in NSW, Councils will have no choice but to address the impending infrastructure crisis themselves. Great Lakes is no exception."

The General Manager advised that the Review Today report will shortly be presented to Council, following which it is likely that the various options will be explored with the community over the next 12 months or so, with a view to determining a way forward.

The Reports are available by clicking on the downloadable documents below.

Contact details
Great Lakes Council
02 6591 7222 (ph)
02 6591 7200 (fax)
council@greatlakes.nsw.gov.au