Rising costs triggers council review

LISMORE City Council has posted a deficit for the 2011/12 financial year but say plans are afoot to address this situation as part of the 'Imagine Lismore' Community Strategic Plan.

The net operating result for the 2011/12 financial year was a $3.692 million deficit. Excluding capital revenues, the deficit was $10.493 million. However, Council's overall financial position to June 30, 2012, has improved by $21.91 million to $1.068 billion.

Council's cash and investments increased to $42.16 million and the debt service ratio was reduced slightly to 6.64%, which is well within accepted benchmark indicators.

The 2012 Financial Reports, adopted at an extraordinary Council meeting on Tuesday night, show that the council's quarry operations performed well given the circumstances and the Goonellabah Sports and Aquatic Centre result was slightly better than expected. Conversely, a worrying trend has emerged with more ratepayers than ever owing the council money.

"The deficit reflects that the costs associated with renewing existing infrastructure are increasing," said the council's finance manager Rino Santin.

"Council is very aware an ongoing deficit is unsustainable and that's why a number of initiatives have commenced including service/service level and Zero Based Budget reviews."

The Zero Based Budget review begins in July 2013 and will look at how to reduce the council's costs with minimum effect on the many and varied services and public works the council provides for the community.

"Put simply, we have to best match the cost of works and services to the funding available, or look at other ways to deliver community expectations. This very question will be asked through the 'Imagine Lismore' process as it's not an easy one to answer," said Mr Santin.

"The fact remains however that Council is committed to achieving a balanced or surplus operating result excluding capital revenues in the future. The first step is to clearly establish Council's priorities. The second part is to apply the initiatives such as the Zero Based Budget review to make sure we are delivering works and services in the most cost-effective way. It's a harsh reality, but in order to balance the books Council will have to make some hard decisions."

The 2012 Financial Reports will be on public exhibition from November 1.


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