Snowy Monaro Council will formally receive the update to its financial situation at its next meeting. Image: Google Earth.
A regional council has acknowledged it doesn’t have enough income for the “timely” renewal of assets as it reviews its financial situation.
Snowy Monaro Regional Council (SMRC) has opened its books ahead of its upcoming meeting, with draft financial statements for 2024/25 and a financial sustainability review included in the meeting documents.
The meeting documents state that, according to the draft financial statements for 2024/25, the council has added $1.4 million to its unrestricted cash reserves.
“This result is well above the $1 million annual target set by our long-term financial plan, operational plan, and the Office of Local Government’s Performance Improvement Order [issued earlier this year],” the documents state.
However, income (outside of rates) is rising more slowly than inflation, while the council has also flagged concerns around its ability to deliver on future service delivery and asset renewal.
“This increases the risk to the financial situation … This year’s financial statements still show council operating with an underlying financial deficit, with the need to follow a tight financial path to achieve a longer term surplus position likely to require tough governance decisions,” the review found.
However, the council says a multi-million dollar deficit is being affected by what it calls “several non-cash accounting adjustments”.
“Overall, these adjustments are accounting in nature and do not reflect a decline in council’s financial health or service delivery,” meeting documents state.
These include a loss regarding the Cooma Sports Hub, as it has been determined the council doesn’t own it.
(Under an accounting approach called ‘de-recognition’, it is being removed from the council’s asset list.)
Meanwhile, other adjustments include money being put aside for future landfill remediation and changes to its road upkeep schedule.
Council documents state SMRC has no loans or borrowings, though there are “accounting adjustments”. Image: Snowy Monaro Regional Council.
The meeting documents also flagged the inability of council to ensure the “timely” renewal of assets (with multiple items dating from the 1950s to 1970s now needing to be replaced or renewed).
“[This means] decisions will need to be made on the community priority of each asset because of limited council resources,” the documents state.
The financial sustainability review notes there could also be community consultation about any changes to service delivery, which are described as being central to financial stability.
“The current long-term financial plans are heavily reliant on revising the service mix to remain within the existing financial constraints,” the document states.
“As seen in the recent community satisfaction survey, there is not a high level of support for cutting of services. This will make achieving financial sustainability difficult.”
The review also states modelling on rates will be done at a future date (including what the higher than expected rate peg for 2025/26 means for SMRC).
As part of the review, updates were given on several measures SMRC is taking to limit its operating costs.
Council’s land bank has been examined to make sure it meets service needs (with up to $60,000 identified in possible savings per year), for example, while a community organisation’s plans for a hostel site are to be considered as part of the council’s continuing divestment from residential aged care.
The draft 2024/25 financial statements will be sent to the NSW Office of Local Government for audit, at which point they will be returned to the council.
SMRC has also budgeted up to $200,000 for an external audit, the meeting papers state.
These draft financial documents will be received at the council’s meeting on Thursday (16 October), which starts at 1 pm. The meeting agenda is available online.
People can attend in-person or watch the livestream.
