Central Highlands Regional Council budget 2014/15 announced

THE Central Highlands Regional Council has handed down a budget reflective of the "tough times" facing its towns, with a 1.8% general rates increase.

Mayor Peter Maguire said the rise equated to about $1 a week for towns with more than 2500 residents and 80 cents for those with less.

"I would like to congratulate you Mr Mayor," Deputy Mayor Gail Nixon said.

"1.8% is really good because a lot of people out there are hurting and we've done the right thing by our own communities."

Read more in Friday's CQ News

 

The mayor's budget statement:

 

Council's strategy focuses on managing public finances in a rigorous and prudent manner with a strong focus on maintaining a balanced budget.

The key objectives of this strategy are to maintain a balanced operating budget, manage the balance sheet, make targeted investments to support long term sustainability, maintain rate revenues at sustainable levels, and continue to plan for the delivery of high quality services to meet the needs of the Central Highlands community.

The strategy for the 2014-2015 Budget focuses particularly on the principles of:

• supporting the economy in the short term following the change in economic conditions;

• improving the efficiency of service delivery across the Council; and

• sustaining a strong operating balance over the medium term.

Council remains committed to maintaining a balanced budget to ensure the long term sustainability of the region. This has been a very difficult task with over a $ 26 million reduction in income compared to the previous financial year.

Over recent years Council has been managing one of the largest flood recovery efforts ever undertaken (over $ 100 million) and the impacts of the peak of the last economic cycle.

These two impacts alone have seen the need for Council to gear up to meet demand.

With changes in both weather patterns and the economic cycle Council is now facing a new challenge of reduced revenue.

More specifically the 2014/2015 financial year has seen the finalisation of six years of flood repair works (NDRRA), a freezing of Council's grant revenue from the Federal Government (FAGS), reduction of externally funded works through organisations such as Main Roads, reduction in income generated by Council's business activities and the impacts of the drought and the economic downturn.

Similar to other businesses in the region Council will be reducing expenditure in all of its main expense areas. As the availability of work reduces Council must therefore reduce its resource inputs engaged to deliver these works. Council will continue to have as a high priority the support of the local economy, and where possible and cost effective, will work to see as much of the available spend delivered locally by locals.

Council is always looking for ways to improve efficiencies and with a reduction of income of the magnitude highlighted earlier it is inevitable that a reduction in services may be required in some areas. While the current economic environment provides a number of challenges, hopefully in the short term, Council is well placed to continue to adapt as and when required. Council maintains a strong operating cash balance of $ 120 million and the 2014/2015 budget continues to allow the transfer of over $ 10 million to reserves to fund future strategic projects. The 2014/2015 budget sees the allocation of $ 88.6 million to capital projects across the entire region including the construction of a new Water Treatment Plant in Emerald to facilitate future growth.

Like any business the cost of providing services to the community does not get cheaper. The latest Consumer Price Index (CPI) shows an increase over the last 12 months of 3.1% (March Quarter 2014) and the Local Government Cost Index has increased over the last reporting period by 2.6%. While these general indicators are useful, some of Councils operations continue to be placed under cost pressures well in excess of the broader indexes. Electricity costs in particular are expected to increase around 13% over the next 12 months. This will have a significant impact on areas like street lighting and water and sewerage treatment which are electricity intensive operations.

Rating Outcomes

In recognition of cost of living pressures Council has been able to maintain rate increases in all categories to less than the Consumer Price Index. On average ratepayers will see a general rate increase of 1.8% and other charges such as sewerage and waste have been maintained at 2013/2014 levels and even reduced in some cases.

Council has undertaken a significant project over the last 12 months to plan a standard pricing structure for water and sewerage across all towns. Water and Sewerage pricing is the last grouping of charges to be standardised following amalgamation. Each town has continued to be charged on the same basis that was in place in the former Council areas although this creates inconsistencies when now being managed as one area. Council will implement the new arrangements over a four year period commencing in the 2014/2015 financial year. All access charges and consumption charges will be standardised across the entire Council area, with the exception of Tieri because of its unique ownership arrangements.

Council will also implement a fairer system for commercial water users by implementing a meter size based charge. Implementation of the new commercial charging structures will not commence until the 2015/2016 financial year. The process of implementing the new pricing arrangements will see non-uniform pricing changes to water charges across the region. In simple terms some areas will see a decrease in their water and sewerage charges and some areas will see an increase above the average 1.8% overall rate rise. The main impacts are in the smaller towns where the cost of providing this essential service has well exceeded the charges levied. The larger residential centres will continue to provide economies of scale for these smaller towns to access these essential services that would otherwise not be economically viable. Overall it will be a fairer system with consistent charges for each and every ratepayer that accesses the vital services of water and sewerage.


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