Over recent years, Council’s financial position has been a focus for both Council’s elected members and management. Over many years of rate-pegging, cost shifting from other levels of government and local government construction costs outstripping inflation, Council had fallen further into the red, so to speak.
This position was not sustainable and Council has diligently taken some tough decisions to fix the problem. These include:
- the three-year special rate variation
- restructuring Council’s own administration and operations through Council’s transformation programme
- implementing better asset management practices
- and applying a commercial focus to Council’s business units.
Much of this work has now been completed. The results of these efforts have been very positive, as demonstrated through our audited Financial Statements for 2016-17, which were recently presented to Councillors as part of Council’s Annual Report.
For instance, more funds are now available for much-needed infrastructure renewal. Examples include the community and sports pavilion at Fitzroy Oval – the Old Camp Yaam Nguura Jalumgal, the reconstruction of Diamond Head Drive at Sandy Beach and Coramba Hall renewal works, to name a few. Council is also continuing to review the way we deliver services, seek innovations and improve customer service.
Importantly Council’s finances are now in a strong position. This is illustrated by the following two graphs. The first shows our Net Operating Result – or the bottom line – together with a more accurate measure of underlying financial performance, the Net Operating Result Before Capital Grants & Contributions. This second measure shows the Net Operating Result after capital grants and contributions are removed.
After several years of improvement from the initiatives outlined above, for 2016-17 Council is back in the black.
The second graph shows our Net Debt from the audited Statement of Financial Position, being the difference between what we owe in borrowings and the funds we have in cash and investments. In 2016-17 our Net Debt position became positive. This is the result of Council continuing to pay off and reduce the very large water and sewerage loans that we used to upgrade that vital infrastructure more than a decade ago, plus the growth of cash reserves earmarked for the long-term renewal of local infrastructure such as roads, buildings, playgrounds and bridges.
The above graphs illustrate the positive trends being achieved. Over time these results will provide the opportunity for the funding of future initiatives that the community and Council may wish to pursue.