Road Review Pushes Council Into Deficit

June 24, 2019

South Burnett Regional Council will be pushed into a $1.539 million deficit this year because of a revaluation of the region’s road network.

Monday’s 2019-20 Budget meeting was told staff had carried out a comprehensive valuation of the region’s Road and Drainage asset class as part Council’s ongoing asset management process.

The review entailed driving and visually recording all the region’s roads, then reviewing key elements to assess asset value, useful life and condition.

It found the useful lives of some roads in the network had been reduced, which increased the amount that needed to be set aside for depreciation by $2.8 million.

This unexpected extra expense had resulted in the $1.539 million deficit.

During the coming year, Council will be undertaking similar reviews of its remaining asset classes (ie. water, wastewater and buildings).

Providing no significant valuation differences were found in those reviews, Council was forecasting a smaller deficit of $252,000 in 2020-21 before a return to surplus ($218,000) in 2021-22.

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The Council’s 2019-20 Budget deficit will have no affect on borrowings.

At Monday’s Budget meeting, Mayor Keith Campbell said no new loans would be raised during the coming financial year, the same as the year prior.

Instead, Council would continue to pay down its existing loans, and was forecasting a $2.4 million reduction in debt levels by the end of 2019-20.

However, Mayor Keith Campbell did not rule out future borrowings.

“Council restricts all borrowings to the delivery of capital projects that are of the highest priority and are unable to be funded from general revenue,” he said.

“Council will ensure the cost of any future borrowing is sustainable in terms of Council’s ability to meet repayments within budgetary constraints.

“Where borrowings are undertaken for a specific service, such as water and sewerage infrastructure, these costs are recovered through the specific service rates and charges and do not impact the general rate.”

The Mayor said future borrowings may include water allocations for the 2020-21 financial year; Kingaroy trunk infrastructure (2020-21 and 2021-22); and an upgrade of the Gordonbrook Dam wall (2021-22).

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South Burnett Regional Council will spend $8.3 million of its $66 million 2019-20 Budget on more than a dozen new capital works projects over the coming year.

They include $416,000 to replace the roof and restump Mondure Hall; $193,000 to re-roof Ringsfield House at Nanango; and $240,000 to upgrade existing cabins and facilities at Yallakool Tourist Park.

The council will spend a further $350,000 to upgrade Maidenwell’s Waste Transfer Station; $400,000 on upgrading software and hardware at Murgon; and $325,000 to re-roof the Mount Wooroolin Reservoir.

Ageing water mains will be replaced in parts of Nanango’s Drayton and Alfred streets and Wills Street West at a cost of $230,000, while $430,000 will be spent in Brisbane Street to fix long-standing drainage problems.

An unsealed 2km stretch of Old Esk Road will also be sealed at a cost of $380,000.

The unsealed portion of Niagara Road at Boyneside will be sealed ($154,000); and Mary Street, the Coolabunia State School car park and the bus zone at Coolabunia will be upgraded ($140,000).

Rural ratepayers will benefit from $5.026 million spent on gravel re-sheeting as the Council begins the second year of its five-year plan to upgrade all the region’s 1500km unsealed road network.

Visitors will benefit from a $100,000 town signage program.

The Council will spend a further $12.5 million on maintaining almost $900 million in community assets it controls including water, sewerage and waste management assets, buildings and equipment.

  Council