May 10, 2021
Former mayor Keith Campbell has quizzed current mayor Brett Otto over the South Burnett’s finances and the recent decision not to call in outside consultants to cast “fresh eyes” over Council’s balance sheet.
Speaking to southburnett.com.au, Mr Campbell queried the apparent Budget operational blowout of $1.05 million, saying Council and ratepayers could not afford “a Santa Claus” mayor and councillors.
Mr Campbell – who served a total of 21 years on the Kingaroy and South Burnett councils before he was defeated by Mayor Otto at the 2020 election – also slammed last year’s zero per cent rate rise which Mayor Otto had labelled as “historic”.
He said the only history being made was the deficit.
And he warned that unless hard decisions were made about assets, the South Burnett was going to be “financially challenged” for much longer than Mayor Otto’s 2023-24 target to get Council back into the black.
In a letter to Mayor Otto – copied to southburnett.com.au – Mr Campbell emphasised he was speaking only as a ratepayer but he had a number of questions he would like answered.
He said Mayor Otto had predicted a $3.6 million deficit in his Budget speech; this was now reportedly $4.65 million, blamed on an increase in depreciation.
“Given that the depreciation allowance should have been correct when the 2020-21 Budget was put together, could you provide details of what constitutes the Budget operational cost overspend of $1.05 million?” Mr Campbell asked.
Mr Campbell alleged Council had taken “an easy path” with its zero increase in general rates last year “to win favour with some loud voices”.
“I accept that even if there had been a 2 per cent rate increase, it would not have cleared the deficit, however, Council was in no position to give a free run of a zero per cent rise and then claim to ‘make history for the South Burnett Regional Council’,” he said.
Mr Campbell said “a series of financial reviews” had been promised to balance Council’s financial position against economic conditions:
- A comprehensive study into rating categories to create improved equity in Council rates;
- An independent audit of the roads and building assets valuation reports;
- Further review of asset management plans as to priorities for buildings and parks and gardens;
- A detailed review of Council’s motor vehicle fleet; and if necessary …
- A mid-year review of 2020/21 rates and charges in response to COVID-19.
He asked whether these had occurred.
“Given that this dismal state of the Budget hasn’t just happened and that it’s been in the making for the past 10 months, was there a mid-year review of any rates and charges to assist in bridging the size of this deficit?” he asked.
Mr Campbell said there were only two options available to Council to cut the deficit: reduce services substantially; or increase rates and charges substantially.
He said there was a tendency for the current Council to backtrack when “hard decisions” were required “particularly if there is negative social media commentary”.
“Can I ask, what solution/s are you and the elected officials putting on the table for us to consider?” he said.
Mr Campbell said Mayor Otto had promised improved service standards; enhanced facilities for youth, families, the disabled and the elderly; and an environment that encouraged investment, promoted economic prosperity, population growth, and supported “sustainable development of all communities across our rural towns and villages, irrespective of size or location”.
“These appear to be ‘uncosted’ promises far outside the realm and financial capacity of ratepayers to bear the increased costs of,” Mr Campbell said.
“The reality is the region has insufficient ratepayers to accommodate the expectations that I often hear you and some of your councillors speak of. The North Burnett Council is living with this pain right now. I genuinely feel for them, both Council and the residents, who unless there is a financial handout face years of below-average basic services.”
Mr Campbell told southburnett.com.au it was possible for Council’s Budget to be brought back into surplus but ratepayers would have to accept either higher rates or lower their expectations.
He said the duplication of assets across the South Burnett was contrary to what former-Premier Peter Beattie had aimed to achieve with Council amalgamations.
In fact, Mr Campbell said he believed parochialism – and every town or village wanting the same as other towns and villages – had actually increased since amalgamation.
He called on ratepayers to lower their expectations and “work with Council” to lower the deficit and bring the Budget back into surplus.
And he urged Council to join with other Local Governments to lobby hard with the Federal Government for a greater percentage share of Financial Assistance Grants (FAGs).
Mr Campbell said Council was “over-capitalised” with duplicated assets.
These duplicated assets – increasing in value due to upgrades and the rise in property prices – were increasing depreciation costs.
“Ratepayers have to modify their expectations about what they want from this Council,” he said.
“I make this genuine call to the ratepayers in this region. Wake up! Help the Mayor and councillors through this difficult time.
“We need to sell assets to reduce depreciation costs.
“Our balance sheet is way too heavy with assets that we can’t afford.
“If depreciation is the monster, assets are the monster’s food.”
Mr Campbell gave as an example the Coolabunia Saleyards which he said could have been sold, and removed from Council’s asset register.
Council’s decision not to accept a tender after public criticism of the sale meant another million dollars would be spent by Council to upgrade a facility that may not become financially viable, but would add to Council’s ongoing depreciation costs.
In his letter to Mayor Otto, Mr Campbell emphasised the need to diminish the rate of depreciation.
“(Unless you) dispose of Council-owned assets; find other ways to provide services across the region; close down some of the costly assets that are replicated in just about every town across the South Burnett, spend less on roads (I know that about 50 per cent of rate money collected is spent on roads), the South Burnett is going to be financially challenged for much longer than the projected 2023-24 financial year period,” he said.
“The only two methods that I’m aware of in my years of local government are (1) to reduce costs and subsequently lower ratepayer expectations or (2) increase rates and wear the censure of angry ratepayers. I hope you and your Council are up for this?”