A report on a financial sustainability analysis of Great Lakes Council prepared by Review Today Pty Ltd has now been released.
During 2007 council engaged professor Percy Allan to undertake this analysis.
This report highlighted the significant challenge across NSW local government authorities to fund ageing infrastructure assets such as roads, stormwater, drains, halls, swimming pools and bridges.
“Council is aware of the difficulties across the Great Lakes area in adequately maintaining these important infrastructure assets and sought Professor Allan’s expert advice to assist in planning for future maintenance commitments,” Great Lakes Council general manager Keith O’Leary said.
The key findings of the independent report include:
o Council has $26 million of physical assets that are in an unacceptable condition and need renewal.
Unless council increases capital spending by $6 million per year on renewing other assets when they reach their use by date, the backlog of unsound, unsightly and unsafe infrastructure will escalate from $26 million to $100 million within 20 years.
o Within 10 years the infrastructure backlog will rise from 4.4 per cent at present to 10.5 per cent.
Already over 13 per cent of physical assets (worth $78 million in replacement cost) are in a poor to very poor condition even though only 4.4 per cent fall below the minimum standards set for different asset classes by council.
Unfortunately council does not have the capacity to fund the annual $6 million renewals gap; it already has a shortfall in revenues.
o Review Today is recommending that council consult the community on whether Great Lakes residents, local businesses and visitors are prepared to tolerate a serious and sharp deterioration in local infrastructure and if not what can be done to find the resources to stem the decline.
Review Today has modelled various council spending, revenue and borrowing strategies for addressing the infrastructure problem and achieving an operating surplus that can be used for bolstering capital works.
o The plan Review Today has proposed for discussion and debate in the community involves over the next 10 years maintaining but freezing services spending at existing levels, increasing rates, fees and charges revenue by 5.5 per cent per annum and borrowing an extra $40 million to lift the council’s debt ratio to 10 per cent which would still be consistent with a good credit rating.
“Such a strategy is not without pain on the revenue and services fronts but adhering to existing policy will result in a serious degradation of local roads, footpaths, kerbing, bridges, buildings, stormwater drains, sea walls, recreation areas, parklands, natural environments and other assets that would threaten the beauty and attraction of Great Lakes,” professor Allan said on delivery of his report.
“Unless the Federal and State Governments come to the rescue of local government in NSW, councils will have no choice but to address the impending infrastructure crisis themselves. Great Lakes is no exception.”
The general manager advised the Review Today report will shortly be presented to council following which it is likely that the various options will be explored with the community over the next 12 months, with a view to determining a way forward.
The Review Today report is available on council’s website, www.greatlakes.nsw.gov.au.
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