Byron Council’s financial ship is beginning to list concerningly, taking from its reserves and other funds in order to bail out its bottom line.
With a copy of Council’s draft budget and operational plan contained in this week’s meeting agenda, it has become clear that, despite recording an overall budget result that is just in the black, Council is not operating sustainably.
Council’s operating result, a crucial measure of an organisation’s financial wellbeing which calculates revenue minus expenditure, has the Council sitting with a $2.2 million operational deficit.
Its unrestricted cash balance – a buffer against any unforeseen expenses – has been further depleted and is now in deficit to the tune of $250,000.
Underlying structural issues
In their report on the budget, Council staff note that there had been ‘underlying structural issues in Council’s budget for a number of years’ which have not been addressed.
The most fundamental of these is that the increasing cost of Council’s core functions is rapidly outstripping its meagre income sources.
This has meant that, in order to balance the budget on paper, Council has had to continue to take dividends from some of its reserves and other funds.
The difficulty of balancing the proposed 2024/25 budget has been particularly compounded by a range of factors, including wage and superannuation increases.
‘It is vital for Council to consider the financial impacts of future decisions, given its current financial position,’ Council staff say in their report.
‘For the first time Council has not budgeted for a full staff complement, but is assuming continual salaried vacancies of at least 3.5 full time positions.’
The draft budget estimates do not currently include any budgeted expenditure for the bioenergy facility proposal next to the Byron STP, and the Council is proposing to borrow an additional $4.19 million to fund three capital works projects.
Fees and charges increases proposal above CPI
At the same time, dozens of increases in fees and charges above CPI are being proposed, including increases to hall hire fees, cemetery fees, sports field hire charges, tip charges, booking fees for Council-owned caravan parks, and sewage and water charges.
But it is not all doom and gloom.
Council has significantly increased the proportion of its investment portfolio that is not aligned with fossil fuels.
Council’s portfolio reached its lowest point in this regard just nine months ago with non-fossil-fuel-aligned investments accounting for 15 per cent of the total, but as at 31 March 2024, the portfolio has increased to 49 per cent.
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