Mayor’s Message 7.2

16 July 2019

The question of “What will my rate bill be for the next year?” is a topic on the mind of many ratepayers at this time of the year..

There are many, of course, that accept the fact that if rates do not increase, then the Council and region is going backwards. From my observations, there is never a unified solution to reducing the need for rating income. In reality, the only way to reduce the general rate is to reduce services provided by Council. Although, with the requirements of the Department of Local Government and the need for a more complete and comprehensive Asset Register, this Council, as with many others, have found that their Asset Registers are not as up-to-date as they should be to comply with legislative requirements. As a result, a further hit that the 2019 /2020 Budget was challenged with was a full revaluation of Road Assets. This has added approximately $43M to the asset base values. The issue of concern is that depreciation has increased by around $3M annually. The systems and programs that Council now has at its finger-tip is better than in past years. There are assets that have never been listed on the asset register nor have they been included in the Insurance cover for example. The impact is that the 2019/20 budget is not capable of covering these additional costs without a substantial rate hike. That was unacceptable. As a result, the 2019/20 budget bottom line shows a substantial deficit. To add to the woes, the same exercise as done for the Roads Assets is to be undertaken for Buildings, Water and Wastewater during the next year. When the conversation swings to removing services, there are none of the communities within the South Burnett who are prepared to drop services they currently enjoy be it Libraries, Parks, Gardens, Swimming Pools and Halls. There are individual people who would be prepared for this type of change because they do not use the Library, Swimming Pool and Hall. An individual voice is a lonely voice unless the majority of the community can be convinced to drop services. The point to be made is that the net result for the 2019/20 Budget is that all operational costs are covered, with the exception of Depreciation. The impact of unfunded depreciation is that there will be a reduced amount of money available to be reinvested back into the suite of assets owned by Council. This is a matter to be given further consideration during the ensuring financial year. The forward 10 year forecast demonstrates that the following years are projected to produce a 2.5% rate increase. The bottom line whole of budget forecast (including Water, Waster Water and Waste Collection) is that Council predicts a swing towards an operational surplus in 2021/22. General Operations will achieve an independent surplus in 2026/27.