Cardinia Shire Council is facing a growing financial shortfall, as its latest report reveals a $7.8 million deficit, forecasted to be $3.5 million higher than budget by June 2025.
Cr Casey Thompson believes the most important matter in the financial report is the adjusted underlying result, noting a $7.8 million deficit, which $3.5 million “unfavourable to the adopted budget”.
This deficit is driven by changes in the phasing of the capital works program resulting in lower staff capitalisation, and increased material and service costs due to the reclassification of Crown Land expenses from capital work in progress to operating expenses.
Additionally, this forecasted position highlights the significant impact of non-monetary contributions and capital grants, which are excluded from the underlying deficit.
Cr Casey acknowledged that the report might give the impression that the Council has “excess money,” noting that “the word surplus gets thrown around a little bit in this report.”But he clarified that much of it is tied up in grants and developer contributions.
Cr Nickell also pointed out that while the Council appears well-funded with $154 million in cash, $110 million is already allocated, leaving only $44 million available, and this figure is shrinking.
He warns that if growth costs continue to outpace funding, ratepayers and services may be impacted.
“That cash available figure is dropping so the bucket is getting smaller. In fact, it has to be topped up by borrowing,” he said.
“In terms of sustainability, I’ve got substantial concerns if the costs of growth continue to not be fully funded by state, federal and developers. It will fall on ratepayers and it will fall on services that we’re able to provide to ratepayers.”
Meanwhile the finance team has managed the budget well, despite economic challenges.
“I would just thank the officers as well for the diligent work in pulling this report together and the briefings that they’ve provided to us,” Cr Nickell said.
“Also, the diligence of Council staff in sticking so remarkably close to budget, given the complexity of the operation and the huge variety of services and Capital Works provided to the community by the Council.”
Cr Collin Ross emphasized the importance of transparency and community engagement in the financial report.
“A lot of people in the community in the past, have come and met with our finance people to discuss some of the items in here when they had a concern or something to add.”
“This is a really important document that comes forward every quarter. It gives you an up-to-date measure on how we’re going at the time. If there’s something you have an interest in, bring it up and we’ll try and answer your questions.”
The officer’s recommendation was unanimously approved by the Council.
