June 27, 2016
The South Burnett Regional Council will cut its debt by $2.4 million in the next 12 months.
Mayor Keith Campbell said today a lot of concern had been expressed about the Council’s financial position during the March elections, where some candidates had exaggerated the real debt position and questioned the Council’s sustainability.
He said people who’d expressed concerns about the debt had forgotten that it amounted to less than five per cent of the Council’s $865 million asset base.
They had also overlooked that it had been run up to build important community infrastructure which is expected to have a working life of anything from 60 years to a century.
“Our debt at June 30, 2016 will be $42.9 million, excluding the loan borrowed for the Memerambi historical subdivision which will be repaid by that subdivision’s property owners,” Mayor Campbell said.
“The majority of this debt is for our waste water treatment systems ($13.3 million), upgrades to our region’s water systems ($11.4 million) and our bridge replacement program ($8.6 million).
“The remaining $9.6 million is a collection of smaller loans, many of which were borrowed by the old Councils for things like the Nanango Aquatic Centre or similar projects.”
Council CEO Gary Wall said a claim made by former South Burnett Mayor Wayne Kratzmann in mid-March this year that the Council’s debt was $38 million was true at that time.
But since then, the Council had drawn down an extra $4.9 million for its ongoing bridge replacement program.
This was a borrowing that had already been approved and budgeted for.
The Mayor said now that the region’s most urgent infrastructure projects had been funded, the Council did not propose to take out any new loans this financial year.
It will focus on completing its infrastructure projects and paying down debt instead.
In 2016-17 the Council will make capital and interest repayments of $2.4 million, which will reduce total debt to $40.5 million by June 30 next year.
The Mayor also downplayed concerns ratepayers were footing a heavy interest bill because of the debt.
“Council will pay slightly more than $2 million in interest charges this year, but at the same time we will earn about $1.7 million in interest from our capital reserves.
“The $300,000 difference is the real amount of interest we are paying on our debt this year, and this works out to about $17 a year per rate notice.”
