Council has a healthier-than-expected bank balance right now, but it's also cautioning not all is as it seems.
Subscribe now for unlimited access.
or signup to continue reading
Bega Valley Shire Council has prepared its suite of annual financial documents ready to refer to them an independent auditor.
Included in the summary being tabled at this week's council meeting is an indication of a $14.9million surplus in the net operating result - a far cry from the $1.5million deficit it had expected.
Council CEO Anthony McMahon said the key reason for the difference was nearly $47.5million in government grants and contributions in the year ending June 30, 2022 - some $16m more than what council had believed was coming.
He said these operational grants included a prepayment of federal financial assistance grants, as well as some disaster recovery payments that had been expected to be received in the 2022/23 financial year.
READ ALSO:
He also added council had managed to cut back on its own costs by $2m through the year.
However, Mr McMahon said while the result puts council's end-of-year finances in a "marginally better" position, it was unlikely to last.
He explained that while the cash and investments statement showed an increase over the previous year, the vast majority of what's in council's bank account was already allocated to specific works and expenditure.
In fact, mayor Russell Fitzpatrick said only around $500,000 was available in the general fund as unrestricted cash.
Mr McMahon also explained that budgets "regularly fall short of actual costs" given the volatility of the wider market these days.
Adding to those pressures was the "drying up" of federal grant programs.
"Some we had assumed would continue are now on hold," Mr McMahon said.
The other main source of revenue for council was its rates, fees and charges. According to the tabled income statement, that accounted for 46.2 per cent of council's income for 2021/22, a fall of some 6.8 per cent on the previous financial year.
The Office of Local Government benchmark is to have 60 per cent of revenue sourced through rates and charges.
This combination of a diminishing number of grants available to council, soaring costs of materials and labour, the FAG indexation not reflecting the market in the Bega Valley, and rates revenue not keeping up with government benchmarks, meant a very challenging time - and conversation with the community - was imminent.
"To be masters of our own destiny we need to get to that 60 per cent [of self-sourced revenue], or we're reliant on what the federal government gives us," Cr Fitzpatrick said.