By DANE LILLINGSTONE
LAST week the Southern Downs Regional Council conducted information sessions across Warwick, Allora and Stanthorpe, outlining its Long Term Financial Forecast and how it will handle the $29.9 million debt.
The sessions were an opportunity for council officers to provide an overview of the financial constraints that the council is currently operating under.
The meetings heard that the council does not have the capacity to borrow any further funds and that its focus was on the need to reduce expenditure and clear its debt.
The council placed some of the blame for its debt on the loss of government funding over the past few years.
Funding for both the Water and Sewer Program and the Small Community Assistance Program stopped in 2009/10.
They also noted that the $7.4 million Flood Restoration works were not funded by the State or Federal Governments.
The Financial Assistance Grant freeze by Federal Government in 2013/14 was also said to have impacted their position with the Local Government Association of Queensland estimating the loss at $2.7 million.
One way council is actively reducing expenditure is through employment levels. Current full-time equivalent employment by the SDRC is at its lowest level since amalgamation.
In 2011 full-time employees for SDRC peaked at just over 390 with that number now down to around 340 and down from the just under 360 employees at the time of amalgamation.
Southern Downs Regional Council’s Director Business and Community Services David Tuxford said council reviews would contribute to reducing expenditure.
“Council is reviewing all of its services to ensure that the services that are currently provided are necessary and provide the most cost effective and sustainable way for Council to operate.
“Examples of services that have been reviewed include WIRAC, the management of which is now contracted out to YMCA Brisbane, and the plant replacement program, which has been heavily decreased, with plants being held on to for a longer period of time than previously,” he said.
Mr Tuxford said that council’s process of retiring debt was working.
“Council’s debt levels dropped by $1.9 million during the 2014/15 year; this is a 6 per cent decrease from $31.8 million to $29.9 million. Over the next 10 years, Council is forecasting to continue repaying between $1.7‐$2 million a year of principle on its loans.
“If additional funds become available from the sale of excess freehold land, council may use these funds to further retire debt,” he said.
As part of the presentations findings from a 2014/15 meeting Queensland Treasury Corporation (QTC) financial review were tabled.
They labelled SDRC’s rating as ‘weak’ saying “A local government with an acceptable capacity to meet its financial commitments in the short to medium-term and a limited capacity in the long-term. It has a record of reporting moderate to significant operating deficit with a recent operating being significant.”
They also labelled SDRC’s outlook as ‘negative’ saying “As a result of a foreseeable event or circumstance occurring, there is the potential for deterioration in the local government’s capacity to meet its financial commitments (short and/or long-term) and resultant change in its rating.”
