Figures available for the last quarter to December 2022, show that Bega Valley Shire Council remains on track for a $10m deficit in its general fund by the end of the 2023 financial year at June 30.
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The proposed special rate variation (SRV) for the 2024 financial year - if it is approved by IPART (Independent Pricing and Regulatory Tribunal) - is expected to deliver around $6.5m extra into council's general fund.
However, this falls somewhat short of the $10.48m deficit predicted for council's general fund, a deficit that has increased from the $9.7m in the September quarter figures.
From a consolidated fund perspective taking into account the water, sewer and waste funds, the overall figure is still predicted to be in negative territory.
Council said the consolidated net operating result before grants and contributions provided for capital purposes had declined by $0.5m, resulting in a projected deficit of $7.3m.
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The general fund deficit is wiping out the relatively small amounts left in water, sewer and waste funds when looking at consolidated figures.
The figures also show that by the end of the 2023 financial year there will be $52.6m in externally restricted reserves. These are effectively ring-fenced reserves where the money can only be used for specific purposes such as water or sewer asset renewals, for example.
The internally restricted reserve is predicted to contain $13.5m. This is the reserve which in the past has been raided to balance the books at the end of the year, with the promise of returning the funds back across to the reserve after the audit.
In October 2021 council narrowly avoided having a qualified audit for financial year 2020/21 after a vote to not release $8m of internally restricted reserves at June 30, 2021 to balance the books, was lost.
With the current projections, a raid is on the cards again at the end of the year, given a $7.2m shortfall in unrestricted cash.
At the recent council meeting Cr Helen O'Neil asked whether the situation could be considered satisfactory and what could be done to improve it.
Council's finance officer Judy Jordan agreed the unrestricted cash deficit wasn't a satisfactory situation but said money could be released from the internally restricted reserve "to ensure a positive cash position".
Internally restricted reserves include money for asset replacement, money for employee leave entitlement and 355 committees.
Ms Jordan said she would be looking at projects that may or may not be completed this financial year. It would not be a case of pushing them out but of acknowledging the delivery times, she said.
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Denise Dion
Regional daily news journalist on the Far South Coast of NSW. Contact me on 0418 213 780 or at denise.dion@austcommunitymedia.com.au
Regional daily news journalist on the Far South Coast of NSW. Contact me on 0418 213 780 or at denise.dion@austcommunitymedia.com.au
