Thursday 21 May 2020
Just as we have responded to the challenges of drought, bushfire, flood and pandemic in recent years, Bega Valley Shire Council is confident the organisation’s current and future financial challenges will be tackled.
This week’s meeting considered the draft 2020-2021 Operational Plan and the 2020-2021 Budget. Both documents are now out for public comment following ongoing work and discussions across the organisation and between Councillors and senior staff.
“In simple terms we need to continue to focus on reducing our annual deficit, which is projected to be $5.5 million next year,” said General Manager Leanne Barnes.
“A range of factors influenced the position reflected in the 2018/19 audited financial statements, including a catch up and correct allocation of funds flowing over from the 2017/18 financial year.
“The process was not perfect, and we are using what we have learned to improve. Council staff are committed to consistent and focussed reporting with a target to achieve a plan that will move us to a balanced position.
“I am confident we can rise to the challenge,” Ms Barnes said.
Given what we have all been through over summer Council has had to amend our Long-Term Financial Plan in response.
“I appreciate some will be concerned to hear this, but I want to reassure the community that Council services remain strong and viable,” Ms Barnes said.
After the 2020 Bega Valley Bushfires, it was resolved to withdraw the previously exhibited plans and not progress with the Special Rate Variation (SRV) on pools. As a result, Council has undertaken modifications to the budget and delivery plans or the next financial year, making sure that the organisation’s plans reflect the important role of bushfire recovery and rebuilding while continuing what the community expect of us day-in, day-out.
“Our finance staff are to be commended for the work they have done – this is just the start,” Ms Barnes says.
Mayor Sharon Tapscott said systemic issues and pressures are also at play. “It’s a complex mix of factors to explain,” Cr Tapscott said.
“Council has been aware of the strains on our finances since 2016. In response we have disposed of some assets, reviewed services, divested of land and buildings, and considered increases in revenue.
“We have also restructured the staffing of the organisation twice to reduce operating costs; but the reality is costs have been growing beyond the NSW Government’s allowed annual rate increase,” Cr Tapscott said.
Conversely one of the other challenges Council faces is an increase in asset maintenance and capital funding costs flowing from the unprecedented levels of grants received in response to the region’s five natural disasters and projects funded by the State Government through the Regional Growth Fund.
“This extra funding has been necessary, and it’s hard not to be grateful for the projects funded but some were not part of our forward plans and have required matching funds from Council and then there is the ongoing upkeep,” Cr Tapscott said.
Stepping up to the situation, staff are preparing detailed service level assessments; Council has also committed to identifying further productivity efficiencies across the organisation to offset the ongoing expenses that will likely be incurred as we deliver new projects.
Additionally, external costs to Council continue to rise with items like the Emergency Services Levy, Defined Benefit Contributions to superannuation, and insurances amongst items that are increasing well above the rate peg increase and CPI.
Mayor Tapscott and Deputy Mayor Russell Fitzpatrick have moved to establish a dedicated finance working group chaired by Cr Fitzpatrick that includes all Councillors, the General Manager, Directors and Finance Manager.
“The working group will meet monthly for the remainder of this Council’s term and will bring added focus and energy to our regular financial scrutiny,” Cr Tapscott said.
“This situation has not been hidden from council or the community and the motion to introduce a working group is another way to regularly share our financial performance and develop options that can be discussed with our community.
“We are not unique in local government. Many Councils face these challenges. Collectively, the sector is working with and advocating to our partners in the State and Commonwealth governments.
“We will be using the current situation to maximise opportunities as they are presented. This will ensure a clear way forward for our community,” Cr Tapscott said
The draft, revised Delivery Program 2017-2021, the draft Operational Plan 2020-2021, including Council’s Budget and Revenue Policy, the amended Financial Strategy, and the draft Fees and Charges 2020-2021 are on public exhibition for 28 days with feedback on the documents to be considered at the Council meeting on 24 June. Council will hold an additional meeting on 27 May to consider the March quarterly budget review statement (QBRS) and the Long Term Financial Plan.
Interested community members will find more details on Council’s ‘Have Your Say’ page.