Council's timely tick of approval
THE Richmond Valley Council received a rare commendation from an independent financial auditor at Tuesday night’s council meeting.
Darren Singh, at council to present the annual financial audit, congratulated the council for achieving re-evaluation of council assets ahead of the time frame set out by the State Government.
The State Government demanded local councils revalue their roads, bridges and treatment works so their depreciation reflects the true cost of replacing them.
The council has managed to achieve this 12 months ahead of time.
“We just got in and did it,” manager of finance James Brickley said.
During the meeting, Councillor Robert Mustow said a recent media report had misconstrued the council’s financial position.
The council ran a deficit in its operation’s budget of $11.5 million. However, when contributions from developers and capital grants were included the council actually recorded a $413,000 surplus.
Cr Mustow later said the council was suffering financially because of cost shifting from the State Government.
The council also lost $2.2 million in bad Collateralised Debt Obligations investments, known as CDOs. The audit showed another $3.3 million of CDOs could not be valued because currently there was no market for the products.
The auditor said many other councils had suffered losses from these investments during the world financial crisis and the council’s position was far from unique.
Mr Brickley said council would probably see a return on a fair portion of its CDO investments.
“They should get everything back,” Mr Brickley said.
Another loss recorded in the audit was a $600,000 legal bill from a decade long High Court battle involving the Iron Gates development.
Cr Donella Kinnish said the council would have to make some tough decisions to reduce its operating deficit.
Mr Brickley said things were difficult for all local governments.
“The solution is to find other sources of income,” he said.