Financial Sustainability Plan
The financial sustainability of Council has been a community concern for some time and formed part of the conversation with the community during the development of Community Strategic Plan, and the supporting Resourcing Strategy (including the Long Term Financial Plan, Asset Management Plan and Workforce Plan). This discussion was based on the estimated funding gap for the renewal of existing infrastructure of $7million per annum and funding both new infrastructure and the aspirations of the Community.
The Long Term Financial Plan 2012-2022 predicted a continuing deterioration of the Council’s medium to long term financial position, borrowing capacity and did not address the funding gap for asset renewals.
In early 2012, the Minister for Local Government announced that as part of the NSW local government reform process he had:
- commissioned the NSW Treasury Corporation (“TCORP”) to undertake a financial assessment of all NSW councils; and
- commissioned the Division of Local Government to undertake an assessment of each council’s infrastructure renewal backlog.
Byron Shire Council has been working with both authorities and its external auditors to gain a clear picture of its long term financial sustainability. The release by TCorp in March 2013 of Byron Shire Council’s “Financial Assessment, Sustainability and Benchmarking Report” has confirmed that Council’s financial outlook is described as “weak anddeteriorating” with this assessment being based upon successive operating deficits, high debt, and a deteriorating capacity to fund infrastructure maintenance and renewal
The financial assessment provided by TCORP to Council confirms this position but states “the asset management plans forecast a maintenance and renewal funding gap of $9.9M p.a.”
Council prior to the receipt of the TCORP report has been working on strategies to address the issues impacting on the financial sustainability of Council in reviewing its Long Term Financial Plan for the 2013- 2023 period.