Mayor’s View – 30th April, 2009
The financial direction set by the Cassowary Coast Regional Council in the budget last year has been reviewed and revised to reflect the likely outcome for the full year.
This will provide the starting point for the figures in the new budget for 2009-2010 that will soon become the focus of council’s attention.
The budget, which is a public document accessible on the council’s web site, had a projected net profit of $24,546 for the 2008-2009 year. The revised outcome for the 2008-2009 budget is now a profit of $2,077. The economic environment and any number of other factors can and will affect the actual financial outcome for the year.
It was considered critical that we fully meet our expenses including depreciation. We must live within our means. This was not achieved without twice going back to council staff to cut expenses, before settling on the final figures.
We also need to provide for the future, recognising now expenses that are going to occur, to avoid the problems we currently face being forced onto the next generation.
The income from rates is almost $1million more than anticipated, mainly due to property transfers affecting net valuations through the year. Council fees and charges were less, due to reduced building activity associated with the Global Financial Crisis; and interest receivable also dropped, due to reductions in interest rates.
However operating grants, subsidies and contributions increased by over $2 million, due to Natural Disaster Relief & Recovery arrangements (NDRRA) monies becoming available.
As for operating expenses, the NDRRA restoration expenditure was significantly higher than originally expected, reflecting the increased income above.
Finance costs were much lower, as council had obtained relief on our interest obligations from the state government.
Capital revenue receipts were lower than expected, principally due to deferral of water and sewerage subsidies, pending advice on council’s applications for an assistance package from the state government.
Capital expenditure was reduced due to the deferral of water and sewerage capital, or in the case of Cardwell sewerage, awaiting resolution of native title issues.
The higher expenditure on NDRRA works has meant that some capital jobs have been deferred. The same wet weather and flooding that caused the NDRRA claims also meant that other capital works have had to be deferred.
These deferred jobs have not been abandoned but will proceed in the new year.
It has also been possible to fund cost over-runs by savings on other jobs and increased grants. This means that over-runs have not produced a loss nor resulted in debts.
Completion of jobs on time and on budget is obviously very important and our efforts in this area will continue to be intensified.