Cassowary Coast Regional Council

The whole purpose of the state government funded report to council by ‘de Chastel & Associates’ is to build on the Orion and Queensland Treasury Corporation’s (QTC) Reports. Both the latter reports are dated March 2008 and de Castel investigates the detailed strategies and policies that the CCRC should adopt to ensure long term financial sustainability, given the problems identified in the earlier reports.The council has done its initial part in delivering a balanced budget and setting in place the post amalgamation processes. This has not been achieved easily, as rate payers well know.

The QTC has assessed the CCRC as having a ‘moderate’ financial rating, on the assumption however that five things will occur:

• Average rate increases of around 6% for 10 years; the rate is to be above the local government CPI index levels.
• Additional water & sewerage charges to be imposed, particularly in the north of the region, where the greatest infrastructure backlog exists.
• Additional water & sewerage capital subsidies are provided by the state government (to 60% & 80% respectively) under the Small Communities Assistance Program (SCAP). This program strictly applies to communities under 5,000 persons, but we fully expect, as does the QTC, that it will be made available for our region.
• Council costs reverting to pre cyclone levels. This means the necessary elevated post cyclone expenditures must now be reduced.
• Both Jubilee & Geraldton Bridges in Innisfail effectively become the responsibility of the state government.

Only three of these five actions are under the control of council.

On the other two matters we need a clear response by the state government.

With rates and charges already above state averages and our community’s taxable incomes being below state averages, the requirement for council to continue to increase rates over and above the rate of local government inflation is very concerning and sobering. The alternative however is to revert back into operating deficits by 2012, and this is out of the question.

The draft de Chastel Report goes on to suggest some further strategies, including establishing an Expenditure Review Committee (ERC) to systematically examine the range of services provided by council, to find ways of reducing operating expenditure. The focus would be on both the range and the level of services provided, with benchmarking of our performance against other comparable councils.

Another recommendation of the de Chastel Report is that the CCRC complete all valuation of asset issues to ensure we receive an unqualified audit report. This will help restore the community’s confidence in their council’s ability to manage its financial affairs. This council is committed to producing financial statements with unqualified audit reports. An audit committee with precise terms of reference is likely to be established.

De Chastel also recommends that council establish a Community Rating Review Group (CRRG) made up of representatives from across the region. This CRRG would advise on the difficult philosophical and policy decisions needed to be made regarding rate equalisation, remissions and categories.

There was no time for such an approach between the election and bringing down the CCRC’s first budget.

Residential and rural categories are still to be integrated. This process will follow the revaluations currently underway and will be addressed in next year’s budget. Other categories including commercial and industrial were integrated in our first budget.

The draft de Chastel Report will be finalised shortly and is expected to be received at the next council meeting, at which time it will become public and council will consider adopting its recommendations including those above.