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Tough Financial Decisions for Councils over next 10 YearsLast modified: June 3, 2009 - 11:54 AM
The findings of the 2009 NSW Local Government Financial Sustainability Review released on Tuesday which revealed that more than a third of NSW's biggest Councils are unable to meet their maintenance costs has come as no great surprise to Great Lakes Council. Great Lakes Council's General Manager Keith O'Leary said "as Council had already commissioned a Financial Sustainability Review in 2008 by the independent firm Review Today who also published the latest State-wide Review, we have already begun the hard road to improving our financial sustainability over the next ten years. "Our next step will be consulting with ratepayers later this year to make some decisions on how we will ensure we return to a financially sustainable position within the next ten years. We have recently informed all ratepayers via a mail out notice of our financial situation and our intention to carry out the consultations". "We are hopeful that this Review will help local citizens and MPs understand the difficulties NSW Councils face in balancing the budget, and why changes are needed to rectify the situation" said Mr O'Leary. Making front page news in the Sydney Morning Herald on Tuesday, the Review has revealed that of the 100 largest councils in NSW, over one third will be unable to meet their maintenance costs unless rate increases of between 80 - 300% occur over the next ten years or the state and federal government provide funding to reduce the infrastructure backlog. The Review states that the biggest challenges seem to be facing regional coastal councils which are predominantly urban in nature, such as Great Lakes Council, and also outer metropolitan councils. Both of these are traditionally the fastest growing councils in the state. The Review uses financial performance indicators from the Councils to assess whether they are sustainable, vulnerable or financially unsustainable over the long term. An unsustainable rating is applied to any council which would need to increase rates and charges by more than double the inflation rate to get their finances and infrastructure in order. Great Lakes Council has received an unsustainable rating, along with two thirds of the regional coastal councils. Average net liabilities for the regional coastal councils were 41% of annual revenue, with the Great Lakes figure being 21%. The situation in regional coastal councils has been brought about by a number of factors including ageing infrastructure such as roads and growth rates of around double the state average. The Report's rating does not suggest Council is not managing its finances well and in fact the Financial Sustainability Report Council commissioned in 2008 states that Council has a strong balance sheet (that is, low debt and other liabilities). "The Report is forecasting what will happen if Councils do not increase expenditure on infrastructure maintenance and renewals. It is saying Councils have to spend more or infrastructure will deteriorate to the point where Councils cannot afford to fix it in the future" said Keith O'Leary. The recent notice mailed to all ratepayers and the series of Forums for ratepayers across the Great Lakes made mention of the Review. Council's intention to consult with ratepayers later this year and to make the tough decisions that need to be made to ensure Council's sustainability was also outlined in the notice to ratepayers. Contact details |
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© 2008 Great Lakes Council |
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