Service cuts not ruled out
Decision time: South Gippsland Shire Council CEO Tim Tamlin said council must save where possible to meet super obligations.
SOUTH Gippsland Shire Council could review services and capital works in a bid to save money.
A rate rise has not been excluded as a way of increasing income.
Council’s financial plans have been upended by news council will have to pay $4.6 million in super benefits from July 1, 2013.
Council will also receive $325,000 less in grants from the State Government due to an overpayment to all councils by the Victorian Grants Commission in 2011-12.
Further cost pressures will come from collecting the Fire Services Levy.
Council will tomorrow (Wednesday) consider avenues for ensuring council’s financial sustainability, with a full report due before the new council in December.
A council report states that in a bid to meet council’s long term financial goals, council will:
• review budgets to identify any potential cost savings or reductions;
• identify ways of reducing current service levels and ongoing costs;
• review capital works to identify potential cost savings or project deferrals;
• identify potential sale of surplus assets;
• modelling borrowing scenarios; and
• model changes to rates and charges.
Council CEO Tim Tamlin said council needed to trim less important costs.
“All departments are going through their budgets little bit by little bit,” he said.
“We could slow down our works program but that is not that easy because a lot of these are tied to grants funding and they are not easy to turn off.”
Council is considering borrowing money to repay its super debt. Under the defined benefits super scheme, council must make up the shortfall to employees promised a guaranteed rate of return under the scheme.
Bass Coast Shire Council has taken a $300,000 hit from the Grants Commission funding cut.
Council CEO Allan Bawden said the drop was caused by a Federal Government error, resulting in a “significant decrease” in money going to the states under the Grants Commission program.
Mr Bawden said Grants Commission funding is the biggest single government grant received by the shire. It amounts to around $5 million.
“Part of it is for roads, but it is the only grant that is untied.”
Distribution is predicated on population and Bass Coast has long complained this doesn’t take into account a shire where the summer population balloons because of holidaymakers.
Mr Bawden said he understood there is a review of the funding formula and council would support that.
Short URL: /?p=4965
Posted by Jacob De Kunder on Sep 25 2012. Filed under Featured, News. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry
