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Council’s $20 million surplus

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MILLIONS of dollars for infrastructure, digital and COVID-19 relief reserves were approved by City of Whittlesea administrators at this month’s council meeting after it recorded a surplus of nearly $20 million past financial year.

The $19.455 million surplus carried into the 2020-21 financial year was a result of several factors, including: more than $10.6 million in various grant allocations received in advance of their planned spending; $2.78 million in avoided loan repayments and interest expenses as a result of council deferring new loans; $1.549 million of deferred operational expenditure; and a capital works budget surplus of $1.695 million.

After accounting for those factors, council’s adjusted underlying 2019-20 surplus was $2.7 million, mainly due to an additional $2.583 million in supplementary rates and developer contributions after the municipality experienced higher-than-expected population growth during the year.

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The $10.6 million of grant money will be spent in accordance with respective grant conditions and requirements, while the rest of the money will be split across a number of reserves.

Administrators voted to allocate $2.58 million to council’s infrastructure reserve to fund future strategic infrastructure projects, $1 million in provisional funding to COVID-19 relief and recovery efforts, $1.617 million for a digital technology reserve, and $350,544 to a people plan reserve to fund the implementation of a people strategy encompassing cultural transformation, workforce planning and capability framework.

Acting chief executive Joe Carbone said the collective savings from the 2019-20 budget provided ‘an opportunity for their reuse into respective allocations for the 2020-21 year and their application for the good of the city’.

Administrator Bruce Billson recommended council officers prepare a report outlining additional projects that could be funded through the infrastructure reserve, including sustainability projects, streetscape improvements, pedestrian and bike links, and phase one of a gathering place as part of the city’s Aboriginal reconciliation efforts.

“That savings on capital works [could be] applied to some worthwhile projects that will act as a contribution to local stimulus in the economy and support recovery,” he said.

“They’re also of a nature and scale that would make them suitable for local contractors and local businesses and be really supportive of local economic recovery.”

Administrator chair Lydia Wilson supported Mr Billson’s comments, saying the works could provide community benefit in the near future.

“It could be our own local stimulus package,” she said.

“I also greatly support the allocation of the additional $1 million for further emergency relief and response to the continued impacts of COVID-19.”

Administrators also approved a carry-forward budget of more than $15 million for works not completed during the 2019-20 financial year.

The carry forward of funding will enable completion of multi-year projects and projects that were impacted delayed by COVID-19 restrictions and other factors.

Council reported an adjusted delivery rate of 86.3 per cent of the 2019-20 works program – a result described as ‘an exceptionally good performance under the circumstances’ by Ms Wilson.

Mr Carbone said council had done well to deliver what it had, but warned the current financial year would also face challenges due to the ongoing COVID-19 pandemic.

“The year was interrupted by certain COVID events, but also certain latent conditions that have pushed the delivery rate,” he said.

“A minimum delivery of 85 per cent is the standard approach for our organisation, commensurate with councils that are delivering at the higher end of capital works.

“There will be challenges, with some interruptions to the construction industry already being felt.

“There is going to be a slow start, which means council needs to be active in the fast catch-up. We’ll be aiming for that same 85-per-cent-plus target.”

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