An auditor-general’s report has red-flagged Moorabool council’s financial sustainability.
The Local Government: Results 2013-14 Audit, tabled in State Parliament last month, reported five Victorian councils – including Moorabool – as being high risk, compared with two in the previous financial year.
But Moorabool council chief executive Rob Croxford defended the council’s financial sustainability, saying there were two reasons why Moorabool was deemed high risk.
“Instead of borrowing money from the bank, we borrowed through an MAV (Municipal Association of Victoria) bond issue,” Mr Croxford said.
“That was all meant to have been finalised by June 30, but there were delays in getting the agreement sorted.
“The financial assistance grant [from the federal government] has been received in advance in the past three years, but last year, for the 2014-15 financial year, the federal government didn’t give it in advance.”
Mr Croxford said the council’s debt was “within guidelines”.
Auditor-General John Doyle agreed that a key reason for operating deficits was the federal government’s decision not to pay financial assistance grants in advance.
“Local councils continue to face the challenges of delivering quality services to their community, maintaining their existing assets and funding future capital works,”
Mr Doyle said.
“To do this effectively, councils will need to effectively prioritise spending and determine sustainable rates for services provided within the government’s proposed rate capping policy.”
Mr Croxford said the federal government’s decision to “pause” its assistance grants to councils and the state government’s rate-capping policy meant Moorabool council might need to reconsider its level of service.
“One of the key actions will be determining the levels of service we provide. For example, we might consider we are not going to mow every reserve in the shire four times a year; we’ll do it three times a year.”
But Mr Croxford said no decisions had been made and the council had no plans of winding back on local grants and key services.
