Council faces tough Budget decisions

Increasing depreciation costs and the loss of financial assistance grants have left Burdekin Shire Council facing some tough Budget decisions.

Shire Mayor Bill Lowis said the Federal Government’s freeze on its Financial Assistance Grants (FAGs) would cost Council $165,000 in the coming financial year or the equivalent of a 0.7 per cent general rates rise.

“The FAGs were there to help us fund services,” he said, “but this freeze on funding means council will need to look at raising the income from the community to pay for services and infrastructure.”

Cr Lowis said an increase in asset depreciation costs in the general fund area – the equivalent of a 3.3 per cent rate increase – meant Council also would have to allow for increased costs of replacing assets.

“The replacement value of all our assets is now close to $592 million. These are assets such as culverts – the price of which has doubled – and roads, which are costing us money without council doing anything to them,” he said.

“It just costs more to replace our existing assets and this is placing extraordinary pressure on our budget processes.

“Council is bound by State legislation to prepare a long-term asset management plan and as part of this we have to calculate how much those assets will depreciate.

“We are also required to follow the Australian Accounting Standards which means to pass an audit we must value and depreciate our assets correctly.”

Cr Lowis said Council had been working hard to keep the rates increase low.

“However, when you look at the core services council provides and maintains – roads, sewerage, drainage, water, waste, street lights etc –the extra budgetary pressure makes it a very a hard task,” he said.

“We have been focussing on the essentials in the budget process and we are doing everything possible to keep our rate rises to a minimum.”

Comments are closed.