2024/2025 draft budget on display
Published on 14 May 2024
Murray River Council provisionally adopted its draft 2024/25 Operational Plan and Budget at Special Council Meeting this week, which includes a $32.8 million capital works program.
The draft document, along with the draft Long-Term Financial Strategy, draft Revenue Policy and draft Schedule of Fees is now available for public comment.
Murray River Council Mayor, Frank Crawley said it is a carefully considered budget as council continues with service level reviews to pursue internal savings.
“Revenue streams are becoming tighter, so in developing this budget we’ve had to work on balancing community aspirations and needs with the financial resources available.”
“We are also continuing to investigate asset rationalisation, service delivery and resourcing to ensure we are operating as economically as possible.”
Cr Crawley said the Operational Plan also meets the Council’s goals of running an operational deficit of no more than $10 million for the upcoming financial year.
“The Operational Plan for the coming financial year contains an operating deficit of $6.40 million, which includes estimated gains of around $3 million on the sale of assets. So, after adjusting for this non-recurring item, the budgeted operating deficit is $9.41 million, which is in line with our long-term target of eliminating the current budget deficit over a period of time.”
“But whilst this puts us on the right path for this year, we must continue our review into current operating activities as we will require significant changes to the service levels in order to achieve continued cost reductions from the second year onwards.”
“It’s always tricky, but we are confident that this budget strikes a balance between fulfilling agreed levels of service, continuing delivery of some community projects and working towards our financial sustainability in the longer term,” he said.
The 2024/25 draft budget estimates an operating revenue of $59.58 million and operating expenses of $65.98 million for the coming year.
Of the $32.8 million capital works program, $20.5 million will be funded from internal resources and $12.3 million from capital grants and contributions.
The draft budget is based on a total rate revenue increase of 4.70% in general rates, which is in line with the rate cap set by the Independent Pricing & Regulatory Tribunal (IPART) of NSW.
Council’s CEO, Terry Dodds said the revenue streams for the coming year continue to see several limitations and challenges.
“At a time when inflation has been at its highest rate in 50-years, the rate cap places significant constraints on the revenue raising capability of Council.”
“Every year inflation is much higher than the rates cap forced on councils, and initially this made councils become leaner, which was a good thing originally. As could be expected though, there is a limit to how many services can be sustained over time with continual shortfalls.”
“Additionally, as legislation grows, so too does the range and scope of services we are expected to provide under cost shifting exercises driven by the State.”
“With rates that are used to fund most of our services being pegged, our core services and financial sustainability is at risk.”
“This means we will need to continue with service reviews in this coming year and continue the conversations around rationalisation of assets to further improve the council’s operating performance ratio over the longer term,” he said.
Whilst service reviews will continue into the 2024/25 year, some of the larger areas of committed capital spend include:
- Kyalite Road Widening $2.25 million
- Flood Damage Reconstruction Works $2.5 million
- Local Road Renewals $2.7 million
- Regional Road Reseals $1.1 million
- Moama Water Treatment Plant Upgrade $2.45 million.
- Tooranie Rd / Yarrein Cr Bridge $1.7 million
- Other asset replacements $2.6 million
As per the National Competition Policy - which applies to local government - water, sewer and waste charges need to be set to ensure that the full costs of providing such services are covered by the respective charges.
To date, council’s charges have not been covering the cost of delivering water supply services and have been subsidised by general funds.
“We have essentially been running at a loss for the delivery of our water services,” Cr Crawley said.
“The charges for this year and those set for 2024/25 reflect Council’s efforts in working towards complying with the requirements of the National Competition Policy.”
“The sooner we can cease cross subsidising our utility funds with the general fund, the better off we will be in the longer-term,” he said.
Murray River Council’s draft budget documents are available for public comment until 11 June 2024 and can be viewed online at yoursay.murrayriver.nsw.gov.au
Following the exhibition period, a meeting of council will be held at the end of June to consider any submissions prior to formally adopting the budget.
“I’d encourage the community to take a look through the draft documents to get a better understating of charges and expenses for the coming year,” Cr Crawley said.
“The community is also reminded that Council has a Rates and Hardship Policy, which is applies to payments of all charges applied by Council.”