Byron Council continues to rely heavily on state and federal government grants for its financial sustainability, a financial audit has shown.
A presentation on Council’s financial position took place during the public access section of last week’s Council meeting.
During the presentation it was reported that the amount of income Council obtained from government grants and contributions increased by 32 per cent during the past year.
‘That would be no surprise to this council, particularly given the natural disasters and other things in your LGA,’ Adam Bradfield from Thomas Noble and Russell told the meeting.
The total amount received from grants, $56.9m, is nearly as much as the total amount Council received from rates and annual charges revenue over the same period.
At the same time, Council’s overall cash position fell by $6.3m, or 12.4 per cent.
This was partly owing to the fact that external restrictions on spending some of its cash reserves fell away, allowing it to be spent by Council.
These figures are significant because, unlike rates and annual charges revenue, Council has little control over the amount it receives in grants from the state and federal governments, and has much less of a say about how that money is spent.
‘Do you make any comments about whether this whole financial structure, by which Council is heavily reliant on grants, is sustainable?’ Cr Peter Westheimer asked the auditor.
Mr Bradfield did not answer the question directly, instead referring Council to a previous slide showing that Council had met five out of the six criteria set out by the NSW auditor general in relation to its finances.
Reliance on state and federal grants
‘I’d encourage Council to look at your long-term financial plan, look at those assumptions and consider that as part of a more long-term view,’ Mr Bradfield added.
Council’s reliance on state and federal grant funding has been an ongoing trend extending over the last five years.
It has increased dramatically as a result of last year’s floods, which resulted in major damage to local infrastructure. Council was in no position to meet the costs of rebuilding on its own.
Council’s ability to generate revenue also took a hit during the Covid pandemic when a significant number of local residents and businesses were unable to pay their rates in full, or annual fees and charges.
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