AN allocation of $3.8 million to the Mirboo North Swimming Pool and $923,000 to upgrade the Jumbunna Road pathway, through to the Korumburra Secondary College, are standout highlights of the South Gippsland Shire Council’s proposed $67.3 million budget to be tabled at a council meeting this week.
However, while the upgrade works on the pool and to the full length of the much-maligned school pathway, from Guys Road to the school, are certain to go ahead next financial year, many of the key community initiatives in the budget and forward plan are heavily reliant on yet-to-be-received government funding.
For example, the council is proposing to spend $21.4 million on capital works in the 2018-19 financial year and a further $26.3 million and $19.2 million in the following two years on such projects as the Bair Street Streetscape works in Leongatha ($4.555m), Korumburra Commercial Streetscape ($3.387m), Korumburra Community Hub ($5m) and the Great Southern Rail Trail ($7m over five years); but there’s no guarantee they’ll go ahead in the budgeted timeframe.
The Council is also yet to decide its future involvement in Home and Community Care Services, set down for decision at its March 28 council meeting, potentially affecting dozens of shire jobs and $0.5m on the budget bottom line.
The draft 2018-19 budget will also be unaffected by recommendations coming out of the shire’s rating strategy review committee which among other things recommended lower rates for farmers and higher rates for industrial property owners.
It still left the South Gippsland Mayor Cr Lorraine Brunt upbeat about the proposed budget, to be tabled for council and community consideration this Wednesday, March 21 at 12.30pm.
“There’s a very high level of expectation in the community but the fact is that a lot of these projects will rely on grant funding from government sources to make them happen. That’s the reality,” Cr Brunt said.
“But as a council we are committed to making these priority projects a reality and if necessary, we might have to look at borrowing some money in the years ahead to make them happen.”
Cr Brunt said the shire was already in a strong financial position, allowing it to call for a 2% rate rise, instead of the 2.25% offered by the State Government, and after paying off the remainder of its borrowings, $3.35 million in July 2019, it would be debt-free and potentially in a position to borrow for projects.
“We need to focus on our priority projects and to go to government with a united voice to get the likes of our two streetscapes, the East-West Transport initiative, and rail trail (Leongatha to Nyora) funded.”
Cr Brunt said the council was sending the right message to the community by not going for the full 2.25% rise in rates, or more by request, but was only able to do so due to the financial stability built up over the past decade. She added that the out-going Finance Manager, Tom Lovass, who recently tendered his resignation while on leave, deserved a lot of the credit for his stewardship of the shire’s finances.
Long-standing finance officer, Stuart Smith, is Acting Finance Manager, overseeing this year’s budget process.
While the council is expecting an income of $67.3 million in the 2018-19 financial year, of which $42m is from rates and charges, total expenses are listed as $59.5m for a ‘surplus’ of $7.7m. But this doesn’t mean the shire is squirreling funds away, according to Mr Smith.
He said the shire needed to post a surplus so it could afford to pay for capital works and also to match anticipated government grants.
He said the ‘underlying’ result provided a better guide to the shire’s liquidity.
If that’s the case, the shire actually expects to record an underlying deficit of $4.45m for the current financial year, and a modest surplus next year of $3.3 million; again all dependent on its success in attracting government grants.
• Total funds in reserve (at June 30, 2019) are $5.67m including $3.35m for loan repayments
• Total staff expenditure up $900,000 to $26.364m
• Total staff numbers (FTE) up by one (arts and events officer) to 266.53
• $6m less to be spent on ‘major works’ in 2018-19 after funding for Long Jetty ($5m), Korumburra Showgrounds ($590,000), Foster recycled water project ($400,000), Agnes Falls ($520,000) and Leongatha FNC $300,000 this year.
• $1m for Great Southern Rail Trail (Welshpool to Hedley)
• Net gain from property sales $245,000
• Garbage rate up from $188 to $192
• Council passes up $100,000 extra in rates by passing up 0.25%
• $159,000 for Korumburra Streetscape design
• $711,000 for Loch CBD drainage and upgrade
• $1.74m for Bena-Konwak Bridge
• Shire office refurb (stage 1) $2.9m over three years
* $200,000 Korumburra Community Hub Design
Cr Brunt acknowledged it would be problematic to design the Korumburra Community Hub until the council had site approval from Victrack.
The community can submit comment on the budget until April 26, 2018 after which it will be presented to council for changes and adoption on June 27.