MITCHELL Shire Council’s half-yearly financial report has shown a growing underlying budget deficit, with the projected figure of $4.17 million more than $700,000 higher than the previously forecasted $3.43 million.
Council’s net surplus also shrank from $51.64 million to $50.93 million, although council officers predicted the underlying deficit would shrink during the next six months as staff revised expected project completion dates.
The adjusted underlying deficit is not expected to be fully eliminated by the end of the financial year on June 30, meaning council will carry a deficit into next financial year.
Council staff said they would review long-term plans and modelling to ensure an adjusted underlying deficit would not be an ongoing concern.
Cr Rob Eldridge said council’s overall financial situation remained stable and he was confident staff would work effectively to reduce the deficit.
“We’ve got a bigger underlying deficit, but we’re confident in the next six months as we move forward out of COVID this will be picked up,” he said.
“We’re still in a very strong position. Our net surplus is $50.93 million, so we’re in a good place to meet all our obligations.”
Among the factors affecting the underlying result were: increased expenditure linked to waste diversion and landfill costs, $512,000; Beveridge road maintenance, $235,000; additional positions approved as part of a mid-year review process, $403,000; a reduction in rates and charges linked to a delay in the completion of development in the south of the shire, $197,000; costs related to COVID-19, partially offset by staff working reduced hours, $122,000; and operating adjustments for projects unable to be completed by June 30, 2022, $287,000.
The total capital works expenditure forecast for the year of $39.44 million was $6.64 million lower than the prior forecast.
Staff attributed the discrepancy to additional carry forward of works into the 2022-23 of $6.86 million, offset by $271,000 of additional expenditure linked to successful grant applications and increases due to project scope and delivery requirements.
Cr Annie Goble said she shared officers’ views the underlying budget deficit would be brought under control.
“I have faith in our staff to address this issue,” she said.
“We’ll look forward to seeing how it stands maybe six months into the next financial year.”
