Georges River Council has reduced an estimated deficit of $13 million, after capital grants, to $3.2 million, according to its General Purpose Financial Statements for the year ended 30 June 2021.
The council's estimated operating deficit of $13 million was seen as likely to worsen if the council's service model was maintained during COVID19.
Instead, the council adopted a budget strategy which included its submission to IPART to increase its rate income, which was approved, and incorporate the proposed Special Rate Variation, which was also approved.
"Without the Special Rate Variation (SRV) adopted in June 2021, Council's future would have been at risk, with immediate staff and service reductions being required," the council's report stated.
Achieving surpluses in future years depends on a number of key elements, which :
- full application and levying of the approved SRV in future years;
- Identification of additional and permanent $4 million in savings each year for the following three years;
- Maintaining the deleted items out of the budget in future years;
- Recouping the lost revenue associated with the financial impact of COVID-19.
Including the revaluation decrements - a decrease in the value of assets - the 2020/21 operating result excluding capital grants and contributions is a deficit of $38.5 million.
Excluding the revaluation decrements, the 2020/21 operating result, excluding capital grants and contributions, is a $1.4 million deficit.
"This was a vast improvement in comparison to the original adopted budget deficit of $3.2 million and LTFP forecast deficit of $13 million," the council report stated.
Other features of the council's 2020/21 financial report showed:
Fees and charges income was lower than budget as a result of COVID-19 closures and community financial support initiatives.
Council's investment income has dropped by $160,000 per month over two years, ($3.9 million).
The disposal of "underperforming assets'' resulted in a $9.5 million increase in cash.
"Total cash and investments increased by $15 million which was a positive result attributed to the strict 2020/21 budget strategy adopted," the council report stated.
"Unrestricted cash was a positive $7 million compared to nil in 2019/20.
"With the acquisition of open space and urgent completion of works at Hurstville Aquatic Centre, the capital expenditure was $37.5 million at year end."
The council scrapped its $1 million a year Councillor Discretionary Ward Fund.
Depreciation and amortisation of assets was $37.7 million.
Consultancy costs increased by $2.1 million from prior years.
General legal expenses were $565 higher than the previous year.
Legal expenses associated with the ICAC investigation into two councillors for $1.1 million.
Under the council's Long Term Financial Plan, specific activities are required to achieve a surplus.
These include:
Service delivery revisions,
Abstain from reintroduction of "unviable subsidies",
Explore potential areas for new revenue streams through wider applications of User Pays model,
Evaluate feasibility of major capital projects,
Continue to supply financial hardship support to those adversely impacted,
Exlpore potential savings in operating expenditure by reviewing operating processes and staff establishment levels.
