Shire forecasts lower result for 2023-24

THE Surf Coast Shire’s final result for this financial year is predicted to be $6 million lower than expected, according to the shire’s latest quarterly budget report.

Councillors received the report for September at their meeting on Tuesday this week.

Produced four times a year to comply with the Local Government Act, the report provides information about the shire’s financial position, including comparisons of actuals and budgeted results to date and explanations of material variances.

It also forecasts known variances to the adopted budget Comprehensive Income Statement and Statement of Capital Works.

As predicted, the shire will lose more than $15 million on the disposal of property infrastructure, plant and equipment as some of its assets are taken over by the Great Ocean Road Coast and Parks Authority.

In good news, the “other income” category is forecast to finish more than $2.2 million higher, at $4.4 million (a jump of 91 per cent) than the budgeted figure because of higher interest rates on the shire’s investments than the predicted 3.5 per cent. Of this figure, about $855,000 will be assigned to the coming Surf Coast Aquatic and Health Centre at the end of the financial year for interest earned on the upfront grant payments.

The Comprehensive Income Statement for July to September reveals an actual surplus of $48,749,000 in the year to September 30 compared to the adopted budget figure for the same period of $49,239,000 – a variance of $491,000, or about 1 per cent.

The shire’s Total Comprehensive Result for 2023-24 is budgeted to be a deficit of $12,014,000 but the annual forecast suggests it will end at a deficit of $18,620,000 – $6.6 million lower and a change of 55 per cent.

Employee costs at $39,257,000 are forecast to be $812,000 lower than budgeted, with the shire attributing the variance to vacancies, offset by factors including higher backfill with casual employees, overtime, instances of extended sick leave and an increase in WorkCover premiums.

For material services, the forecast expense of $34,435 is $2 million higher because of a bigger project expenditure budget due to new project funding, such as the federal government’s Black Spot Program.

The shire is forecast to lose $5 million more in depreciation this financial year ($20.8 million), which the report notes is due to revaluations completed after the adoption of the budget during 2022-23, which led to increases in replacement cost and thus higher depreciation.

The report also includes a full list of the shire’s asset renewal backlog, which is calculated at $8.294 million as of June 30 this year.

Of this figure, more than half (58 per cent, or $4.779 million) of the assets in need of renewal are roads, with open space the next biggest at 17 per cent.