Like the motions concerning the improvement of the bushfire readiness of council, this common sense and urgently necessary motion, for improving the financial situation of council, was turned down — again with only councillors Liu and Walkom voting in favour. Same old…

*********

Kangaroo Island Council, General Meeting 11 June 2014

Under Item No 11.2, Public Consultation Report – Annual Business Plan & Budget 2014-15

Cr Walkom moved the following motion, seconded by Cr Liu:

Council having reviewed the 2014-15 Business Plan as presented which incorporates the annual budget for 2014-15 advises as follows:

Council acknowledges the extensive work the administration has made to develop the proposal now before Council.

Council notes the improvement to the total operating expenses from the currentyear of -$4,196,963 from last year’s original budget of -$4,666,423 but is concerned that Council has an acceptable maximum deficit target of -$2,420,000 and requires this figure to be achieved.

Council refers to the stipulation it set in the budget guidelines for Material Costs of 1.8% is actually presented as a 2.3% increase and requires the stipulated 1.8% upper limit to be met.

Council notes that its requirement for the release of funds from the unallocated 2013/14 budget amount as per the 8′” May 2013 minutes at item 9.1 para 4 (10) remains outstanding and as such is a pre-requisite to be achieved for this plan.

Council notes the intent to run operations in 2014-15 with a small pre-depreciation cash surplus ($201,969), and that this means that the capital works program of $1,341,674 net spend, will need to be substantially funded by additional borrowing. Council requires that cash expenses be substantially reduced and that capital borrowings not exceed 50% of the total capital works program.

Council notes our Net Financial Liabilities Ratio in this plan significantly exceeds Council’s upper limit of 100%, this ratio being forecast at 111%. As this is a key indicator of Council’s financial position being what Council owes to others less the money Council has or is owed, this ratio must be below 100% in this plan.

Council notes that in its term to date which includes the 2010/11 finances through to this forecast plan of 2014/15 the deterioration in Council’s operating deficit totals $19,859,468 and requires compliance with Council’s resolutions and guidelines that this be addressed by taking a more austere approach.

Council also notes that its current Strategic Management Plan 2010-14 which is the foundation for this Business Plan, became a resolution of this Council when reviewed and adopted at the 8th June 2011 Council meeting and Council’s introduction to this plan states “The most critical issue is the long term financial sustainability of this Council.”, and Council’s finance directive of the plan is “To plan for the financial sustainability of Council” and notes the lack of progress to this directive.

Council expresses its concern that the Council Meeting resolution of 14/12/2011 at Item 9.1.4 “That the audit committee wish to highlight the significance of the operating deficit and urge Council in its budget process for 2012/13 and subsequent years to work towards improving its financial performance in the future.” — is in effect not being achieved.

Council notes the limited time available this financial year to adjust the Plan and achieve these requirements and requires a complying plan and budget review be effected by 31 August 2014.