Where's the money gone?

BYRON Shire Council has been slammed over its financial management in a letter from the NSW Department of Local Government refusing it a special increase in rates for 2010/11.


A lack of transparency and detail, as well as tardiness in providing information, are among ‘a number of concerns’ outlined by Ross Woodward, chief executive of the Department of Local Government.


The council applied in April for a 6.98 per cent rates hike, on top of the general increase of 2.6pc, to help pay for a new library, a regional library contribution, emergency services contribution, beach scraping at New Brighton, Wategos walking track, cycleway construction, information technology, and the Byron Regional Sport and Cultural Complex (BRSCC) – a total of $1,096,000.


But the application was refused, amid a litany of damning statements about the council’s financial management.
Mr Woodward noted that rates income for Byron Shire Council had been increased by more than 100 per cent in the past eight years.


“This is the result of seven special variations and compares with the cumulative rate-pegging increase of 31.17pc for the same period,” he said.


But, despite these special hikes, ‘council appears to have made little inroad into addressing its infrastructure maintenance requirements’.


Mr Woodward also criticised the council for failing to report income, expenditure and outcomes from the previously approved special variations, ‘which makes it difficult to assess the extent to which these funds have been used to meet the approved purpose’.


Council’s asset renewal ratio was ‘currently very poor’, he said. “Yet little of the proposed variation funding will be used to correct the current shortfall.”


Mr Woodward was also concerned that council had been given additional funding through previous special variations for the regional library and to fund loans associated with the BRSCC.


“Again, it is unclear, due to the lack of transparent reporting by council, whether these funds have been spent for the approved purpose,” he wrote.


Mr Woodward also noted that the estimated cost of the BRSCC ‘has increased significantly’.


The library was another bone of contention.


Mr Woodward noted that the cost was now estimated to be $6 million, compared with the original estimate of $3 million in 2007.


The council had only supplied his department with an expenditure review for the BRSCC and the increased cost of the library on May 14, he said.


Furthermore, ‘these reviews contain minimal information and are not sufficient to meet the division’s capital expenditure requirements’, he said.


“It appears that council has not carried out sufficient ongoing cost and risk analyses of the projects and the effects it will have on council’s future financial position.”


In a written response to the comments, general manager Graeme Faulkner said the council had been unable to identify where it had failed to comply with reporting req-uirements for income and expenditure.


Yesterday, acting general manager Shannon McKelvey said the council had reported on special rate variation expenditure and capital projects ‘as per DLG guidelines’.


“The annual report lists the past five years’ special rate variation expenditure,” she said.


“Similarly, capital expenditure projects such as the BRSCC and Byron Bay Library have been reported to the DLG, as per their requirements.”


Mayor Jan Barham has described the DLG’s refusal of the rates increase as ‘disappointing’, and warned that community programs would suffer as a result.


Byron Shire Council will hold an extraordinary general meeting today to reconsider the budget to find alternative funding sources and/or delay some programs.
 



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