Hay Shire Council is cashed up but preparing for tougher times

By Tertia Butcher - October 18, 2023

Council’s unrestricted cash remains sound with a balance $8,648,000 showing in the financial statements.

Even allowing for prepaid grants of $6,133,000 which are included in this figure, this still a very satisfactory result for the year and gives Council sufficient cash moving forward.

“Good financial management would be to try to keep this figure around this mark, although there is scope to use some of these funds if required,” Director Corporate and Community Services, Mark Dowling said.

“The Consolidated Operating result before capital grants result of $385,000 whilst satisfactory is largely a result of Council receiving the full prepayment of the 2023/24 Financial assistance grants in addition to $1,115,212 of the 2022/2023 funding.

“When this is taken into account the adjustment result would be an operating deficit before capital grants in the vicinity of $1,000,000.

“Given that Council has been able to maintain its working capital or unrestricted funds balance during the year, this is not a major issue in the short to medium term particularly when Council has just undertaken an extensive capital works program.

“The original budget was for a deficit before capital grants of $595,000 and when considering the actual depreciation charge was $410,000 more than the budget figure, then the result really is not unexpected.

“During the year Council also had the flood event which resulted in expense for both prevention and restoration which was not budgeted for.”

General Manager, David Webb said the wealth of Hay Shire Council has never grown as much as it had in the last financial year.

“During the year Council’s net equity increased by over $27 million primarily caused by the increase in asset values in particular roads and other structures,” Mr Webb said.

“Council has over $204 million in fixed assets at June 30.

“We’re in a sound financial position but are facing some tougher times ahead.”

Mr Dowling said there were again two ratios which fall below the benchmark in the financial indicators.

They are own-source operating revenue, as well as the percentage of outstanding rates and annual charges.

Mr Dowling said there was an increase in unpaid rates from non-urban ratepayers.

“Farming properties used to be family operated who paid on time,” he added.

“Now many are corporations and private investors who sometimes delay payment.”

Mr Dowling said he would also like to see an increase in in-house operating revenue.

Councilllor Handford commented at the last council meeting when the financial statements were presented that some councils were moving to contract their work out.

However, Mr Dowling said his preference would be to do the work in-house by Council, rather than outsourcing jobs.

“We are about community,” Mr Dowling said.

Council’s annual financial statement for the year represents 25 per cent rate income and 75 per cent in government grants and assistance.