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Budget

2020-21 Budget – the first step in moving forward together:Brett Otto

At the recent election, you the people made clear your expectations of council, reasonable expectations of better value for money for ratepayers, improved service standards, enhanced facilities for youth, families, the disabled and the elderly as well as a commitment from council to create an environment that encourages investment in our region, promotes economic prosperity and population growth and most importantly, supports the sustainable development of all communities across our rural towns and villages, irrespective of size or location.

I can say with hand on heart, that as your new mayor, I have left no stone unturned in working through the budget line by line and with my fellow councillors, our CEO and staff have made every effort to deliver a budget that provides a responsible and compassionate response to the economic challenges facing the people of our region in these unprecedented times. Having said that, this budget is far from perfect, indeed it is very much a work-in-progress and I acknowledge that we have much more work to do. It is however, an important first step and reflects the priorities outlined in council’s Operational Plan for the 2020-21 financial year, priorities that constitute the early stages of creating more prosperous and liveable communities.

It is a $108 million plan to kick start the process of building a stronger South Burnett through partnerships with higher levels of government and by working together through stronger connection to and better engagement with community.

In delivering this budget, council remains conscious of the financial, social and emotional burden endured by our region’s residents through the cumulative impact of the ongoing drought and Covid-19 pandemic.

To the people of the South Burnett, those whose small businesses are suffering, who have had their hours cut or lost their jobs, farmers who are still battling the drought, families who are facing rising costs of living, pensioners and retirees who are struggling to make ends meet, we understand that you are doing it tough and that there is much uncertainty on the horizon.

In response to such, council has been careful to formulate a considered and measured response to supporting the community through these challenging times. A response that provides short-term relief without compromising the ability of council to sustain a sound financial position and asset management strategy for future generations. As such, this budget response includes:

  • the first 0% general rate rise in the history of the South Burnett Regional Council, achieved through savings of approximately $1.4 million to council’s proposed operating budget. These savings will be delivered alongside a long overdue pay increase of 2.5% for staff and absorbing an expected CPI increase to the cost of materials and services of around 2%;
  • a 0% increase to council controlled fees and charges;
  • a 0% increase to the commercial wheelie bin charge in support of small business;
  • an amnesty on outstanding debt recovery during the COVID period;
  • miscellaneous case by case deferral or relief of service charges for local not-for-profit community organisations;
  • refunding all prepaid council facility reservations; and
  • a commitment to supporting local small business through reforms to council’s procurement policy.

While council will receive no additional income from general rates due to the capping of such, it is important to note that some ratepayers general rates will increase, while others will decrease. This is due to the phased in valuation of their land. Council adopted 3-year valuation averaging as a means of smoothing or phasing in the large land valuation increases caused by the land revaluation undertaken by the Department of Natural Resources Mines & Energy as at 01/07/2019.

As part of council’s engagement policy, I will be holding community forums across the region throughout the first week of August to provide further community information on rates and charges.

An operating budget of $70 million will support the delivery of key community services and facilities maintenance programs. Within this $70 million, $28 million has been set aside for asset renewals, underpinning council’s strong commitment to sustainable infrastructure across our extensive road network, water, wastewater, and community buildings and parks and gardens assets. In doing so, council is ensuring existing assets are available for the benefit of future generations.

The current year budget is projected to result in a $2.2 million cash surplus, with an overall operating deficit of $3.6 million after depreciation. A significant contributing factor is an increase in depreciation of almost $2 million, largely due to the recent revaluation of building assets.

At 30 June 2021, council’s current assets are projected to $49.2 million dollars, including $43 million in cash at bank. Current liabilities are projected to $14.8 million.

Total assets are projected to $951 million, with total liabilities at $61 million, of which council borrowings are projected to reduce to $33.6 million. Council has adopted a debt policy of no new borrowings for the 2020-21 financial year.

Total community equity is projected to increase to $890 million by 30 June 2021.

As highlighted, this budget position reflects the first stage in the budgetary process. Council will be embarking on a series of further financial reviews during the course of the year with the objective of balancing council’s financial position against economic conditions, such will include, but not be limited to:

  • a comprehensive study into rating categories to create improved equity in council rates;
  • an independent audit of the roads and building assets valuation reports;
  • further review of asset management plans as to priorities for buildings and parks & gardens;
  • a detailed review of council’s motor vehicle fleet; and if necessary,
  • a mid-year review of 2020-21 rates and charges in response to Covid-19

In addition to the operating budget, asset management planning has facilitated the development of a $38 million capital investment program to be shared across all communities, encompassing:

  • $22.5 million on roads, drains and bridges;
  • $5.8 million on buildings, parks & gardens;
  • $3 million on water infrastructure;
  • $3.7 million on sewerage and wastewater infrastructure;
  • $2.3 million on plant;
  • $350,000 on waste assets;
  • $480,000 on information technology systems.

Providing secure and reliable water and sewerage services are a significant responsibility for councils. Our local water and sewerage network is under increasing stress due to ageing infrastructure. Long-term financial forecasts indicate that additional cash reserves will be required to fund significant capital expenditure associated with the replacement and upgrading of essential water and sewerage assets. In order to accumulate the required cash reserves, council has adopted a measured and responsible approach to increasing water and sewerage charges so as to smooth the impact on users over consecutive years.

As such, to provide for sustainable management of these critical assets, water and sewerage user charges will increase as follows for the 2020-21 financial year:

  • the water access charge for urban residential users will increase by 2% from $611.50 per annum to $624 per annum (an increase of $12.50 per annum);
  • water consumption charges will increase by 2.1% from $1.54 to $1.57 (3 cents per kilolitre) on tier 1 consumption and by 2.1% on tiers 2 and 3 (an annual increase of $1.56 per annum for a household consuming 52 kilolitres per annum);
  • the wastewater (sewerage) charge will increase by 2% from $724.70 to $739 per annum (an increase of $14.30 per annum);

Overall. most urban residential ratepayers will pay an additional $28.36 per annum for water and sewerage services.

The current water feasibility study funded by the commonwealth governments National Water Infrastructure Development Fund will be crucial to identifying future solutions for water security and will provide a platform upon which council will actively pursue government investment in our region’s water infrastructure needs.

Council cannot rely solely upon ratepayers to fund our aged and deteriorating water and waste water network and as such will need to lobby state and federal governments to recognise and support this critical infrastructure for our rural communities.

Council is compelled by state legislation to make provision for future landfill costs. Long-term financial forecasts indicate that additional cash reserves will be required to fund significant capital expenditure associated with future landfill. In order to accumulate the required cash reserves, council has again adopted a measured and responsible approach to increasing waste charges so as to smooth the impact on users over consecutive years.

As such, waste user charges will increase as follows for the 2020-21 financial year:

  • the waste management levy will increase by 8% from $150.50 to $162.50 per annum (an increase of $12.00 per annum), including a $2.50 charge to maintain the current opening hours at all tips and to increase the opening hours at the Murgon and Wondai tips to seven half days per week;
  • domestic wheelie bin charge will increase by 2% from $165 to $168 per annum (an increase of $3.00 per annum);
  • there will be no increase to the commercial wheelie bin charge, remaining at $243 per annum;

Overall, most urban residential ratepayers will pay an additional $15.00 per annum for waste collection and disposal services.

The community rescue and evacuation levy will increase from $4 per annum to $5 per annum, with all funds going directly to Lifeflight.

The state emergency management levy, also known as the rural fire levy will not increase, remaining at $130.20 per annum.

This means that most residential ratepayers will have an increase of $44 a year, or 85 cents a week, with the total change in rates and utility charges of 1.79% compared to rates and utility charges levied in 2019/2020.

Rural ratepayers without water, sewerage and bin collection services are not subject to these charges

Council’s maximum $200 pensioner rebate remains, matched by the $200 maximum State Government pensioner subsidy.

I will continue to advocate strongly to state and federal governments on behalf of the people of the South Burnett for a more equitable share of funding. Insufficient funding from government for council operations has repeatedly compromised our capacity to deliver essential services and infrastructure and to minimise the burden on ratepayers.

Private sector investment is a key strategic priority for council, our ability to grow our population and provide improved living standards for our people is significantly dependant on long-term job creation. Fostering greater diversity in our regional economy is a key factor in building increased resilience and economic security.

Council will work to engage much more productively with private companies and public sector agencies to foster industry growth across our region in sectors such as agricultural production, food processing, freight distribution, manufacturing, the Arts and tourism.

Mental health issues across the state of Queensland have been further exacerbated by the Covid-19 crisis. I am confident that our region can provide a healthy option for people seeking a more balanced and authentic lifestyle post Covid-19 and as such lead to a renewed period of tree change inspired population growth.

By working together we can position our region to achieve its potential. A potential for enhanced liveability and economic prosperity that is underpinned by our enviable country lifestyle, welcoming communities, an abundance of rich and diverse natural resources, close proximity to burgeoning coastal and urban populations and emerging export hubs, including Toowoomba’s Wellcamp Airport.

I wish to acknowledge and thank my fellow councillors, our CEO, Mark Pitt, council staff and in particular our general manager of finance and corporate services, Susan Jarvis and her staff for their concerted efforts in bringing the 2020-21 budget to fruition.

I have a strong sense that the current decade will provide a renewed period of regional prosperity. By uniting as one region comprised of many diverse communities, we will move forward together.

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