Wage stress sours budget
SOUTH Gippsland Shire Council has unveiled a host of exciting projects for the region in its 2011-12 draft budget.
Enhancing Korumburra’s town centre, furthering the Korumburra Children’s Hub, looking for more industrial land in Leongatha and pushing for the extension of the Great Southern Rail Trail to Yarram are among the new initiatives.
The projects will come with a general rate rise of 5.25 per cent – which equate to average household rates of $1,355 – and have been clouded by concerns that council is employing too many staff at a ballooning cost to ratepayers.
Cr David Lewis last week told council he was concerned employee costs were “escalating”, rising from $15.1 million in 2009-10 to $18.9 million in 2011-12 – an increase of 25 per cent.
But other councillors defended the employment of 13 extra staff this financial year, saying they were vital to delivering services.
Council has a capital works budget of more than $13.5 million – including $423,414 for the rehabilitation of the Koonwarra landfill. Among the highlights mentioned by mayor Cr Warren Raabe were:
• an industrial land study for Leongatha;
• a parking strategy and contribution plan for Leongatha;
• a Housing and Settlement Strategy to predict future growth in the shire;
• design work for the Korumburra Children’s Hub;
• an aquatic strategy in place by the end of the year;
• completing an equestrian feasibility study for the Stony Creek area; and
• the Korumburra Town Centre Framework Plan.
Council will provide street sweeping in coastal towns, and nearly $3.5 million will be spent on roads, $985,414 on waste services and $425,506 on bridges. Many playgrounds will also be replaced.
Council is expecting an operating result of a surplus of $2.1 million, down on last year due to a likelihood of receiving less capital grants.
Council will not borrow any more money and at the end of 2011-12, will owe $452,000, the lowest borrowings since 2000-01.
“The budget will ensure existing service levels are maintained, a number of new initiatives are funded and continue the allocation of additional funds to renew the shire’s infrastructure,” Cr Raabe said.
Council will employ 13 additional staff, with the bulk being in planning and information technology, plus a property development co-ordinator, and a new director and personal
assistant,
The costs of 251 equivalent full-time staff worried Cr Lewis more so because they were mostly for office staff.
He said between the 2010-11 and 2011-12 budgets, council had employed 26 extra people. Cr Lewis claimed each officer cost nearly $100,000 in wages, plus the expenses of office space and transport.
“That will bring the cost of staff up to more than $26 million,” he said.
Cr Lewis believed ratepayers would rather council spend $26 million on infrastructure such as buildings, roads and footpaths.
“I’m concerned this budget is under cooked. We have a 25 per cent increase in staff, yet materials and services costs are projected to go down by $500,000,” he said.
Cr Lewis later added: “The way we are going with staff increases, the budget has not got enough in it to keep us going. We really should have a look at this budget before we send it out to the public.”
Cr Kieran Kennedy said the $500,000 came from surplus funds from individual council department budgets.
Cr Jim Fawcett said that in 2005, council’s staffing levels were inadequate, resulting in public complaints about service. Council’s computer system was then outdated and strategic planning lacked focus also, he said.
He believed the staff increase was warranted to improve service.
“Three to four people will be involved in wheeling out the new computer system. You have to have people to put things in place and unfortunately you have to spend a lot of money to get that expertise,” Cr Fawcett said.
“This is about getting our organisation to a level where we can provide the level of service that this community deserves.”
Cr Raabe said some new staff would be on three year contracts and may not be with council in three years’ time, resulting in savings then.
As for the rate rise, the mayor said council’s previous rate charges were below those of similar sized councils.
“Our community is saying ‘Do more’ so the expectation must be that rates will increase to increase service standards,” he said.
Cr Lewis was the only councillor to vote against placing the draft budget on public exhibition.
He also opposed council’s Long Term Financial Plan, saying councillors had a responsibility to find other ways of solving problems than by employing extra staff.
He believed council could return to extreme debt by increasing spending.
Cr Fawcett, an accountant, said such claims were “mischievous” as council reviewed its financial position annually and there was no need to worry.
“Our accounting department is like a hawk on our long term financial outcomes,” Cr Fawcett said.
Waste service charges are projected to rise by 2.5 per cent.
The draft budget will be open for public submissions until June 29 and the final budget is scheduled to be adopted by council on July 29.
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