Melton council’s apparent inability to meet infrastructure renewal targets has again been highlighted by an auditor-general’s report.
The annual report is aimed at informing State Parliament on the financial sustainability of Victoria’s councils.
Melton was one of two municipalities identified as having a high-risk “renewal gap”.
The gap refers to whether a council has been maintaining existing assets at a consistent rate.
The rate is calculated on a council’s aggregate spending on renewal, restoration and maintenance of infrastructure.
Melton was assessed as being in the high-risk category for the fourth time in five years, indicating spending on assets had not kept pace with consumption.
Last year, Melton was rated a medium risk.
In the report, Auditor-General John Doyle said outer metropolitan councils typically spent less on infrastructure renewal.
“As predominantly growth-area councils, they have higher new infrastructure needs compared with established councils that require greater focus on maintenance and renewal,’’ he said.
Melton was assessed as a medium risk in capital replacement, indicating renewal spending was insufficient. But council chief executive Kel Tori said the formula used was skewed towards non-growth councils and should be reviewed.
“The formula only takes into account expenditure that renews a piece of infrastructure to its pre-existing condition and does not include expenditure where it expands or extends the capacity of an asset,’’ he said.
“For instance, the Melton library project – where the former library was demolished and replaced with a completely new library –
is not considered to be expenditure that would fall within the renewal gap equation.
“The key issue, however, is that in a municipality such as Melton, with a rapid rate of growth, the vast majority of our assets are relatively new and as such require less renewal expenditure during their early years.
‘‘The benchmarks that have been established for the industry, which are universally applied in assessing the level of risk, are not in my opinion appropriate for a growth municipality.”
