MILDURA Council is facing a second successive budget shortfall despite earmarking the maximum 1.5 per cent rate increase for the 2021-22 financial year.
The council says the forecast $1 million deficit in the 2021-22 draft budget could be attributed to a combination of reduced income, additional COVID-19 supports and the impacts of drought.
The draft budget proposes the maximum allowable rate increase and a commitment over the next 12 to 18 months to review and refine operations in a bid to reduce costs.
The council also said it would try to find additional sources of revenue to bring the budget into an operating surplus in future years.
A special meeting of councillors on Wednesday night to approve the release of the draft budget for public comment was told the deficit had coincided with the unprecedented impacts of COVID-19, which had had a significant impact on many individuals, businesses and community groups in the region.
The meeting was told council had delivered about $5 million in direct and indirect COVID-19 support to the community over the past year with assistance from the Victorian Government.
This included rate relief, waiving of various fees and charges, grants, assistance with food parcels or increased cleaning of community facilities and the adoption to online services.
“Despite these financial pressures, council has made it a priority to ensure there is no change to the standard or number of valuable services provided, while also continuing to deliver a strong capital works budget to support local jobs and businesses,” council corporate general manager Chris Parham said in a report tabled at Wednesday’s meeting.
The draft budget includes two major projects being the redevelopment of the Powerhouse precinct on the Mildura Riverfront and stage two of the Mildura South Regional Sporting Precinct which has forecast borrowings of $8 million in the 2021-22 financial year.
Expenditure in the 2021-22 draft budget includes $18.9 million for buildings and building improvements, $12.8 million on road projects, $2.7 million towards waste management, $1.9 million on recreational, leisure and community facilities and $1.6 million on parks, open spaces and streetscapes.
The draft budget also allows for $53 million for its full time, permanent part-time and casual employee costs.
The average capped rate for 2021-22 will be $2217, about $54 more than in 2020-21.
Mildura Mayor Jason Modica said development of the $145 million budget had come at a challenging time as the region looked to recover from not only the economic impacts of the COVID-19 pandemic, but also the Millewa sand drifts brought about by drought.
“We certainly recognise that many residents, businesses, community and sporting groups have suffered financially as a result of the pandemic and its restrictions along with the drought and council has not been immune to these impacts,” Cr Modica said.
“Despite the challenges, I look forward to the continued investment into the community,” he said.
Anyone wishing to make a written submission on any proposal contained within the 2021-22 draft budget can do so before 9am on Tuesday, June 15.COUNCIL FACED $2M DEFICIT POSITION WITHOUT RATE RISE
Council corporate general manager Chris Parham told Wednesday night’s special meeting of councillors the 1.5 per cent increase in rate charges equated to about $1.05 million in council revenue.
Mr Parham said that combined with a forecast $1.01 million deficit even with the rate increase, council’s financial position could have been much worse.
He said that in terms of council’s financial sustainability and fiscal financial responsibility, multiple budget deficits were not “appropriate”.
“What we would be looking to do is over the next 12 months … looking at any opportunities for further revenue (and) savings in order to reduce that deficit position and ultimately get us back to a balanced budget,” Mr Parham said.
“With the Federal Budget being announced last night and the State Budget being announced next week, I’m hopeful that the state and federal governments may be able to assist us with some additional revenue to ease some of that pain,” he said.
“If the rate rise wasn’t there then we would potentially be in a $2 million deficit position.”
Cr Stefano de Pieri said the forecast deficit again highlighted the disparity between city and country ratepayers.
“It’s not a lot of money in the scheme of things having heard the billions flying last night through the Commonwealth Parliament (budget) with casual abandon,” Cr de Pieri said.
“(But) for us it is a lot of money and it is a lot of money for ratepayers of this town and it goes exactly to that issue of disparity between the city and the country,” he said.
“It always comes to the fore when we have to approve a budget like this.
“I’m only consoled that a good job has been done and the deficit is large but not as large as it might have been considering COVID and all the restrictions and the enormous amount of expenditure that this council had to put up just to deal with the consequences of the pandemic.”
