Hepburn Shire Council is responding to the current market volatility being experienced in the construction sector, including significant price increases, material supply challenges and rising inflation, by proactively amending the delivery of its 2022/23 capital works and special projects program.
Council has approved a number of projects be carried forward from 2021/22 into 2022/23, as well as deferring some budgeted expenditure to next financial year. This action is financially responsible and will reduce the risks associated with project delivery and rising costs and will help to improve Council’s overall financial position. These external factors are being experienced by all sectors, not just local government.
Capital works expenditure for 2022/23 has been amended to $22.16M, and increase of $3.81M inclusive of $4.85M carried forward from the 2021/22 budget. A total of $5.07M of capital expenditure has been deferred to 2023/24 to accommodate cost increases and market supply issues. Council delivered $10.71M in capital works in 2021/22, the highest expenditure in five years.
“We have carefully reviewed our financial position, particularly in the context of external factors such as increasing interest rates and the growing cost of project delivery and devised a financially responsible approach for the remainder of 2022/23,” said Mayor, Cr Brian Hood.
“By reviewing these priorities we can realistically balance our ability to deliver projects against community expectations and also ensure we meet external funding obligations. The limited availability of contractors, the rising cost of labour and our current financial position mean we need to be realistic about what we can deliver in 2022/23,” he said.
The amendment to the project program will ensure Council can deliver its key projects across the Shire.
Given the recent storm and ongoing inclement weather impacts, additional funding has also been allocated for the upgrade and renewal of drainage, kerb and channel works and gravel road re-sheeting across the Shire. Officers continue to assess the damage to roads and seek additional funding from government partners.
Grants have also been received for a number of projects this year including redevelopment of the bowling green at Creswick Bowling Club, implementation of the Doug Lindsay Recreation Reserve masterplan, designs for Mineral Springs Reserve and an upgrade to the Kingston Road intersection. Grant funding is vital to the ongoing development of key projects.
Council will continue to review and actively manage its financial outlook and project priorities.