Lesley Hewitt
At a Special Council Meeting (which can be viewed on Hepburn Shire Council’s Facebook Page), Councillors approved the release of the draft budget for 2024-2025 for public exhibition on a 4:3 vote (Crs Bray, Drylie, Halliday and Simpson for, Crs Henderson, Hewitt and Hood against).
A copy of the draft budget can be found at Draft Budget | Participate Hepburn. In line with the Council decision I urge you to have a look at the draft budget and make comments. You can make comments up until the 13th of June, 2024.
I do appreciate that the timeline is short and that many community members are occupied preparing their submissions for the various Draft Structure Plans which are also due around the same time. However it is important to understand the financially unstainable position the Council is in.
Critically the draft budget forecasts a $2m deficit in 2024-2025 and that is after proposed borrowings of $5.5m in new loans and $1.5m in operating expenditure cuts and an exceedingly small amount of unrestricted cash ($200,000) to meet any unforeseen events/costs. The draft budget also requires $4m in permanent savings to break even in the following three years. This is 20% of current income from Council annual rates or 12% of Council’s cash operating costs.
There are several factors that have contributed to this unsustainable financial position. These include the cumulative effect of rate capping at rates below the annual inflation rates; cost of living increases, particularly in construction costs which have impacted on a historically very large capital expenditure program; a relatively small population (about 16,500) and five towns needing services (Daylesford/Hepburn Springs, Creswick, Clunes, Glenlyon and Trentham) leading to service duplication and inefficiencies); and an ambitious 4 year Council Plan (2021-2024). In addition, several of our towns have significant historical buildings that are owned or managed by Council and are expensive to maintain. As well, specific local factors include several storm events over the last three years that have left Council $4m out of pocket and the consequences of an historical decision to purchase the Rex building several years ago which has led to a Council loss of $5m.
Councillors, in the 4:3 decision to release the budget also added $100,000 towards implementing the Affordable Housing Strategy. Affordable housing is a critical Australia-wide issue with responsibilities at federal, state, and local government levels. Council has limited levers to pull in efforts to increase affordable housing. These include having a consistent process for decision-making in planning and to appropriately rezone land to allow for housing development. Senior Council officers including the CEO, the Executive Manager of Planning, the Mayor, myself as Municipal Association of Victoria representative and other councillors have consistently advocated to state and federal government around affordable housing as per the actions in the Affordable Housing Strategy. This has included highlighting that money obtained from the proposed Short Stay Accommodation levy proposed by the state government should be returned to those Councils where it is collected.
I am on record stating my concern about Councillors budgeting for a deficit, rather than for a minimum break-even position, for budgeting for borrowings of $5.5m in loans without a specific plan to meet the interest repayments let alone the principal, and with $1.5m cuts in operational costs which include not filling positions currently vacant and including the storm recovery staff whose work has ended. Responsibility for the draft budget rests with Councillors and a request for an extension of time, albeit uncommon is not unprecedented.
Most Councillors did not support my view and I accept the majority decision. Please take the time to look at the draft budget and provide your comments by 13th June. Usually when the draft budget is made public, residents and ratepayers make submissions about what they would like to see included. With a budgeted deficit of $2m, the need to find $4m annually for the next three years and an exceptionally low unrestricted cash forecast of $200,000 to meet unforeseen events, any such requests would be difficult to meet. Please take the opportunity to provide feedback on the draft budget and raise any issues that you think Councillors need to consider before adopting the final budget on18th June.
Cr Lesley Hewitt is a Daylesford resident and an elected councillor for Birch Ward.
Councillor Columns are a regular feature in The Wombat Post. We offer this space as an information channel from Council to the community. Councillor Columns are not subject to editorial review by our editorial committee but are published as we receive them from our elected Councillors.
