DESPITE facing a $60 million backlog of works and a potential operating deficit of more than $3 million in the coming financial year, Gloucester Shire Council has resolved to put back an application for a special rates variation until at least 2015.
Council was considering submitting an application to the Independent Pricing and Regulatory Tribunal (IPART) in the New Year but a decision to bring forward the submission deadline by the Department of Local Government forced a rethink.
Auditor Paul Cornall of Forsyths told councillors the service provider remained in a precarious financial position despite overall improvements in the past 12 months.
He said council’s income statement had broken even thanks largely to a $3 million boost in the form of flood grant funding. But he said the challenge for council was matching the money coming into the organisation with its expenditure.
He said council had $270 million worth of assets and cash reserves of $1.1 million, though with $1 million earmarked for employee entitlements, council was holding just $136,000.
Mr Cornall said council also had improvements to make in its asset maintenance ratio, which was currently sitting at 29 per cent.
“You should be spending $8 million a year on maintenance and at the moment you’re spending about $3 million,” he told councillors.
“Your backlog of works is 34 per cent. The benchmark is less than one per cent and some councils are sitting at one per cent.”