Financially Sustainable
If we want to survive into the future Council must cover it’s operating costs. If we don’t we will burn cash and eventually run out. This present Council have put in its 5 year Strategic Plan to run consistent surplus budgets. We want to cover our day to day costs. We have had ongoing deficit budgets in the past. A point the Tasmanian Auditor General has noted and frowned upon.
If Council was content to run deficit budgets then your rates would have been lower but our cash reserves would also continue to decline. We would not be living within our means.
If you want to know the financial challenges facing Tasmanian Councils then please read this. Get educated about the pressures facing local government.
Council can dish out low rates but expect to see our roads and bridges deteriorate and then over time our cash will run out. Our rates have been too low in the past. They have increased significantly since Council came out of administration.
The million dollar question is what is an appropriate level of rating?
With over 100 bridges, a small rate base and an undulating and in places mountainous terrain of road networks it is obvious that rates to cover operating costs will be substantial. More ratepayers to help share the burden would be one way to help. We can cut costs as well. Think carefully and give me some ideas where you see wastage and/or duplication. But I say it again: Please read the report first by clicking on the link in this post. Some people are good at throwing stones. We need people who can build something with stones.
Here is a snippet from the report
THE CHALLENGE FACING TASMANIAN COUNCILS
Under existing policies, Tasmanian Councils generally exhibit:
operating deficit s; and
on preliminary estimates, annual renewals gaps that are well above the high end of their respective target ranges. This is evidence of
significant under-performance against benchmarks.
While preliminary indications are that their infrastructure backlogs currently are quite manageable, some Councils are running the risk that these backlogs will become significant
as their sizeable annual renewals gaps accumulate over time. Councils generally have comfortable strong balance sheets – with minimal debt.
ONE IN FIVE TASMANIAN COUNCILS MAY BE FINANCIALLY UNSUSTAINABLE
Based upon the best information we can muster at this stage, we categorise the current finances (and financial policies) of six Tasmanian Councils ( or 20%), which serve 8 % of the
State’s population, as ‘unsustainable’. This does not mean these Councils are in imminent danger of defaulting on their debt service obligations or that their financial viability is being called into question. Rather, what is being flagged is that – if the long-term finances of such Councils are to be put onto a sustainable footing – substantial or disruptive revenue (or expenditure) adjustments appear inevitable.