TRC and their budget

Budget in the black but “financial challenge” looms

A modest cash surplus is revealed in a report Tamworth Regional Councillors will consider next Tuesday night, but Mayor Russell Webb wants the community to understand that there is a ‘‘serious financial challenge’’ looming in the future.

The report recommends Councillors agree to the public exhibition of the draft Our Annual Plan and Budget 2023-24 documents which set out the services and projects Tamworth Regional Council will deliver in the coming year.

The documents show the Council proposes to spend $249,708,004 across its general, water and sewerage funds in 2023-24 with a total income of $189,602,881 and delivering

 $87,771,960 in capital works to improve local facilities and infrastructure.

Currently there is a $429,325 cash surplus for the general fund, however that surplus is fast depleting due to pressures from the increasing cost of doing business and the NSW Government’s continued practice of cost shifting. For example, the announcement this week that subsidising the Emergency Services Levy will not continue.

The draft plan includes a 3.7 per cent increase to rates revenue (as approved by the Independent Pricing and Regulatory Tribunal for all NSW Local Government Areas) as well as an increase of 8 per cent to both the water availability (connection) charge and the water consumption (usage) charge and an overall 6 per cent increase to waste charges.

“The high inflation we are experiencing in the Australian economy unfortunately means costs are increasing for all households and businesses – and Council is no different,” said Councillor Webb.

“We have made appropriate use of savings to sustain us in the face of some considerable challenges - our worst drought on record, extreme bushfires, the COVID-19 pandemic and more recently repeated major storm events and subsequent flooding.

Now in the coming financial year we have a budgeted cash surplus of $429,325, but there will be a further depletion of our savings and we will be taking out loans to be able to deliver some projects for our community. And, over the next few years our cash reserves will be in decline.”

Councillor Webb said Council has limited options to increase revenue to address the widening gap between its income level and the growing costs of delivering essential services and infrastructure.

“For us to meet our financial challenges and deliver on our community’s expectations, it will be necessary for Council and the community to work together and re-evaluate what we do and how we do it,” Cr Webb said. “This is a serious financial challenge and it is critical that we explore all options available, including the feasibility of seeking a special rate variation to increase our rate income above the fixed cap amount. This is a path most of our neighbouring Councils have already started down but we have been able to hold off on through our long track record of strong financial management.

We will be starting a conversation with our community in the new financial year framed by three options about our operations: how we will maintain, how we will grow or how we manage a decline.”