Rates frozen, grant income up as Council delivers ‘responsible budget for uncertain times’
Longreach Regional Council has frozen rates and reported an increase in grant funding as part of its 2020/2021 Budget, handed down today.
Despite not raising rates and utility charges at all this year, Council says it has managed to avoid deepening its operating deficit thanks to a range of efficiency reviews. The budget also features a $20M capital works program supported by only $5.1M from Council coffers. The organisation says it has made improvements to its processes for identifying and preparing submissions for grant funding over the past year, that have contributed to the result.
Council is describing the budget as a responsible one for uncertain times, and Mayor Tony Rayner said Council had to negotiate existing challenges posed by financial sustainability as well as added uncertainty due to COVID-19.
“Rural and remote councils all over Queensland have been struggling with their budgets in recent years, even before Covid-19 struck” he said. “Our rates-base is insufficient – rates and utilities only cover about 30% of our operations – which of course will drop to 26% this year. But we’re very aware of the pressures being faced by our community during these unpredictable times – because we’re facing them too.
“So I think we’ve struck a good balance with this budget between cutting costs and supporting the community through a difficult time.”
Through the budget, Council will spend $28.2M maintaining and improving town streets, storm-water drainage and rural roads; $6.3M providing water and sewerage services; $4.2M delivering Community Services such as Libraries, Childcare, and Sponsorship; $3.3M maintaining Public Facilities like Showgrounds, Parks and Gardens, Sporting Facilities, and Town Halls; $938K supporting the regional Tourism industry; and $600K managing pests, weeds, rural lands, stock routes, and reserves.
Mayor Rayner said Council would further strengthen its cash position over the course of the year.
“Our cash at bank by the end of the 2020/2021 financial year will strengthen more than forecast; to about $20 Million. This is a great result given the challenges we’ve faced. It’s been made possible thanks to a combination of efficiency reviews in areas such as property and asset utilisation, fleet management, and simple things like energy consumption.
“But we’ve also focused on being more competitive and improving outcomes in our applications for state and federal funding.”
He said Council could have deferred its budget but chose not to.
“Our state and federal governments have deferred their budgets, but we’ve opted not to do that because we want to get on with our projects. Trying to prepare our budget, when they’ve put off theirs, makes it harder to discern what financial impact their decisions will have on us in the coming year.
“But we think it’s important to keep our services and projects going and advance our strategic interests.”
Some of those projects include major upgrades to tourism infrastructure in Isisford, improvements to the Machinery Mile and recreation centre in Ilfracombe, and upgrades to the Longreach Saleyards. Council says it has plans to improve key infrastructure such as the Isisford weir and it will also progress strategic initiatives such as the recently announced Thomson River Master Plan project.
The Mayor said the Thomson River Master Plan had the potential to benefit the whole region.
“Projects like that are exactly the sort of thing we need to be supporting to make our region a better place to live. We need initiatives like this to map out the way we want to grow our communities for the benefit of everyone in our region.
“Those liveability outcomes ultimately drive economic growth.”
A plan to improve water security in Longreach, by raising the weirs on the Thomson by one metre, remains unfunded in this year’s budget but will remain a top priority. According to Council the project was almost shovel-ready and securing state or federal funding for it will be a focus in the coming year.
Cr Rayner said preparing the budget has been a formidable challenge.
“This year there’s been a lot of speculation about the state of our finances. Most of that speculation misses the mark completely, but our financial sustainability has suffered in recent years.
“Most of it can be put down to an insufficient rate base, a freeze in the indexation of federal funding, and the devolution of responsibilities from other levels of government and the community. We rely heavily on a mix of funding programs, many of which are contestable, and we don’t always get what we need.
“But as you can see from this year’s result, we’re getting better at that.”
He said despite the deficits of recent years, Council was not encumbered with burdensome debts.
“People see a deficit on the balance sheet and they assume it amounts to a debt” he said. “In reality, our deficits have all been supported from cash reserves. Those reserves are limited and need to be conserved, for sure, but our deficits haven’t caused any debts – it simply means we need to keep working on our expenses and keep a close watch on our cash.
“The borrowings we do have are mostly tied up in the Longreach Wild Dog Exclusion Fence Scheme, which is supported by special charges levied on participants over 20 years – making it virtually cost-neutral to Council.
“So they’re definitely no burden – it’s a vital investment in our sheep and wool industry. One that’s already driving increased productivity and will continue to support our economy for years to come.”
The full Longreach Regional Council Budget 2020-2021, including the Mayor’s Budget Statement, will be available to download from Council’s website next week.
Key Figures – Longreach Regional Council Budget 2020-2021:
|Operating Revenue||$41 Million|
|Money from rates, levies & charges||$10.7 Million|
|Financial Assistance Grants – Operating||$7.8 Million|
|Other Grants – Operating||$13.8 Million|
|Operating Expenses||$45.3 Million|
|Employee Benefits||$14.7 Million|
|Materials & Services||$22 Million|
|Depreciation & Amortisation||$8.1 Million|
|Operational Deficit||($4.1 Million)|
|Capital Expenditure||$20 Million|
|Capital Grants||$15 Million|