The Mayor of Central Darling Shire Council, Councillor Ray Longfellow, said he has been encouraged by comments in two recent addresses to Council regarding its financial performance and what is emerging as a challenging yet very positive outlook for the future of the Shire.

Loss of $614,000 for 2012: The first of these was a report and address to Council on its financial results for the year ended 30 June 2012 which, although generally favourable, expressed strong concerns about a decline in its cash position.

Mr Jeff Shanks from Council’s auditor, the Morse Group, said that “whilst the operating result for the past financial year was a deficit of $614,000, when viewed against a surplus of $665,000 for the previous year, it was not an unacceptable result taking into account the impact of additional costs of flood restoration works.”

When asked a question by one of the Councillors regarding Council’s solvency, Mr Shanks said “ although Council is facing a short term cash issue largely brought about by having to fund necessary flood restoration works in advance of grant reimbursements from the Roads and Maritime Services Department, (formerly the RTA) by any measurement against all of the three generally accepted measures of insolvency, Council is not insolvent or broke.”

One of these measures is the debt service ratio. Central Darling Shire Council has a debt service ratio of 0.78%. The industry benchmark for similar councils is 10%-20%.

This reflects Councils determination to wherever possible, fund works from its own resources and at the same time, should it be required, maintain the capacity to borrow responsibly.

Mayor Longfellow said Council shared the Auditors concerns in relation to its cash position and as the result of a recent workshop held with Councillors, is finalising its position on a number of potential options for alleviating the issue.

Improved Rate Collections help

In his report Mr. Shanks commented that “another of the key indicators used to monitor and compare the performance of councils, is the percentage of rates outstanding at the end of the year.

Despite still remaining very high at 19.52%, the reduction of over 30% in the ratio compared to last year, is most encouraging and reflects the improved efforts of staff in this area.”

Amalgamation unlikely in near future

The second address to Council was from Glenn Inglis a member of the Independent Local Government Review Panel commenting on their recently released paper, the Case For Sustainable Change.

Despite widely held concerns across the Shire and neighbouring Shires, the panel does not see amalgamations as a realistic and practical solution to the resourcing and financial issues confronting councils in the Western Region of NSW.

As far as our area is concerned, Council has taken encouragement from the Panels suggestions for new forms of service delivery, greater coordination of resources and services between State and Local Government with Local Government taking a more direct role in the delivery of State and Federal Government services and programs.

The panel has recognised the inherent problems of small populations spread across vast areas with little opportunity to significantly generate income and suggested the time has come for a rethink on how Financial Assistance Grants are distributed across the State.”

The Panel will publish a  further report in February this year.