Shire document aims to explain financial difficulties

THE Surf Coast Shire has updated its Our Financial Story document to reflect the ongoing and new financial difficulties faced by the shire.

First produced in June 2020, Our Financial Story now includes issues such as climate change, waste and recycling and the use of borrowings as a solution to address the challenges of funding intergenerational assets.

The document’s introduction notes that its purpose is to “share the financial challenges faced by the council and to outline the important principles that underpin the development of its annual budgets and financial plans”.

“By sharing these challenges and principles with the community, the council hopes to inform and engage its most critical stakeholders in finding solutions to the council’s financial challenges.”

Our Financial Story notes the municipality has a population of about 41,000 as of this year, with the shire providing more than 100 services to the community and maintaining more than $1 billion of community assets.

It sets out four demands on the shire’s finances:

• The reality of responding and adapting to the changing climate
• Costs associated with maintaining the shire’s existing assets and new assets
• The expectations of a growing community with diverse interests, compounded by a continuing growth in visitors, and
• The growth costs of managing the municipality’s waste and recycling, including transitioning away from the Anglesea Landfill.

However, meeting these four demands is constrained by five revenue structures:

• The state government’s rate capping scheme has capped rates below inflation since 2016
• The state government’s introduction earlier this year of changes that prevent councils from fully recovering the cost of all waste and recycling costs through a waste service charge
• Victoria’s debt levels are forecast to increase to 25 per cent of nominal net debt to gross state product by 2026-27, which will limit the state government’s ability to provide support to local government
• The Financial Assistance Grants from the federal government, which account for more than half of the shire’s operating grants, has not increased in real terms on a per capita basis since 1995, and
• The challenge of the shire fully recovering the cost of providing its services.

A majority of councillors received and noted the document at their June meeting.

Cr Gary Allen said government grants were important to support shire infrastructure but also created future renewal obligations.

“I believe that we should give greater consideration to the use of infrastructure special rate or charge schemes for major new initiatives.”

He said efficiencies had been embedded into the shire’s operations but more efficiencies would need to be explored, including the standard of services the shire provided.