Byron Shire Council has had its 2012/13 income reduced by $132,411 owing to Commonwealth funding adjustments.
Acting general manager Ray Darney said the Financial Assistance Grant, which is issued annually to all NSW local government areas, has been adjusted downwards because of population growth and consumer price index (CPI) being lower than expected.
The reduced grant funding could see an estimated Council budget 2012/13 deficit of $94,411 and the general fund accumulated surplus reduced to $409,689.
‘It means that Council will now need to consider reducing some services, in a shire that is already stretched, in order to keep the budget in the black.
‘Council had originally forecast a $38,000 budget surplus which would have seen the general fund accumulated surplus with a $542,100 surplus.’
He said unlike many other councils, whilst Byron Shire was fortunate to have the accumulative working fund that could absorb unexpected costs, it was a far way short of the $1 million council-set target.
Mr Darney said the Commonwealth funding grants are calculated on a number of factors including the population base, location, land values and infrastructure commitments such as buildings and road network.
‘Byron Shire has been disadvantaged by this methodology owing to the high land values in the shire and therefore the incorrect perceived ability for ratepayers to pay more to support infrastructure upkeep.’
Mayor Jan Barham said despite repeated appeals to the NSW Grants Commission and the federal government since 2000, no consideration of the impacts Byron Shire faces has been recognised in the grant allocation formula.
‘We know that Byron Shire has a relatively small population base and yet it needs to support the 1.4 million visitors the towns open their doors to every year.
‘Naturally, this volume of people creates an increased impact on the maintenance of infrastructure and yet Council has limited means to try to keep up with funding needs other than seeking an increase in funding from the ratepayers,’ she said.
At the same time, noted Mayor Barham, Byron Shire has a low socio-economic base with low incomes and a high proportion of the population employed in seasonal work, tourism and retail.
‘A significant proportion of the shire can simply not afford to pay higher rates. As a consequence the value of Council income revenue is stretched further and has not kept up with the ability to maintain essential infrastructure such as roads.
‘There is a misunderstanding in the assessment that the high land values do not equate to high wages of locals or the ability to fund additional rate increases. The assumption assumes that the shire’s capability to fund the ongoing infrastructure costs and does not pass the reality check,’ Mayor Barham said.
Determined to keep this issue to the forefront of state and federal governments and better inform their decision making, Mayor Barham said Council had recently taken part in a National Sea Change Task Force survey that considered the impacts that temporary populations, such as visitors, have on popular coastal communities.
She said Council was looking forward to the results of the research and will continue advocate for increased funding.
‘Over the past decade any increased income Council has managed to generate has been eroded by the reduction of the Financial Assistance Grant.’