Executive Summary This year will be a critical year for securing Council’s future. The 2021/22 Budget has been prepared assuming Council receives the approval from the NSW Government for the Special Rate Variation and also implements a single, fair, equitable and consistent rating system for the entire Georges River Area. The 2021/22 budget is an important year for Council and the community. The budget has been prepared with a focus on the feedback received from the Community during our New Rates 2021 consultation. It has incorporated the service standards that are expected, identified savings, and assumes the special rate variation. Without the special rate variation, Council’s future would be at risk, with immediate staff and service reductions being required. The 2021/22 budget is a considered budget that places Council on the path to securing its long-term financial sustainability in future years.
The approach to these decisions has been balanced, in that they have been made across all areas of Council’s operations, including employee costs, Councillor costs and community assets/services. In order to significantly reduce the adopted operating deficit and address financial sustainability, reductions include $6 million worth of operational programs project, services and $350 million in capital projects being deferred, reduced or deleted.
Model 2 of the Long Term Financial Plan (LTFP) has been built using the budget for 2021/22 as the base and presents a financial projection of the next ten years.
Based on this approach the adopted forecast deficit of $12 million has been reduced to a projected deficit of $4.5 million. Though these measures have been introduced and the projected deficit reduced the Council’s financial results improving, depend on an increase to rates income or substantial service reductions.
Model 1 highlights to forecast of Council should no action be taken to resolve the ongoing operating deficits.
Based on this outlook the implementation of Council’s financial strategies, outlined within this document, are essential in securing the sustainability of Council.
The 10 year forecast illustrates the operating results and is based on projected known events. These projections form a roadmap of the operating results, which provides Council an opportunity to: •
Assess different courses of corrective action and quantify the potential outcomes
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Ensure sustainability through positive net results
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Structure the operations, based on affordability and financial sustainability.
Over the past three financial years, the LTFP has illustrated Council’s poor and deteriorating financial outlook over the 10 year period. Prior to the events of COVID-19, Council had an adopted forecasted operating deficit (before capital grants) for 2021/22 of $12 million. Failure to address the unsustainable financial position places Council in contravention of S.8b of the Local Government Act 1993 and will compel Council to cut and/or reduce services to ease the unfavourable gap between income and expenditure.
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In preparing the draft 2021/22 Budget, continuation of savings from prior years and the deferment of projects has been required to improve the prospect of achieving financial sustainability into the future.
Georges River Council // Long Term Financial Plan 2021/22
