Coun­cil to bor­row mil­lions for Rubyanna

Isis Town and Country - - News -

MAYOR Jack Dempsey has a sim­ple phi­los­o­phy when it comes to debt.

“As long as a ca­pac­ity to re­pay debt ex­ists, bor­row­ing funds is a sim­ple day-to-day ar­range­ment for any busi­ness op­er­a­tion.

“Coun­cil is a busi­ness and does bor­row money. The facts are that coun­cil has more than the re­quired ca­pac­ity to re­pay any funds it seeks to bor­row.

“Dur­ing the 2015/16 fi­nan­cial year we did plan to bor­row $32 mil­lion but this strat­egy be­came un­nec­es­sary and coun­cil did not bor­row one cent dur­ing the last fi­nan­cial year.

“As a re­sult we fin­ished the 2015/16 fi­nan­cial year with a debt fig­ure of around $56 mil­lion.

“Dur­ing the new fi­nan­cial year we have bud­geted to bor­row $24 mil­lion which will in­crease coun­cil debt to $80 mil­lion head­ing into 2017/18.”

Cr Dempsey said coun­cil held com­mu­nity as­sets, fully clear of debt, that are worth $1.78 bil­lion. Coun­cil’s to­tal li­a­bil­i­ties rep­re­sent just 6.5% of its as­sets.

“Not­with­stand­ing that huge level of eq­uity, coun­cil bor­row­ings are clearly tied to a ca­pac­ity for re­pay­ment from our rev­enue sources and are as­sessed on a very strin­gent risk-to-ben­e­fit ba­sis. The funds we in­tend to bor­row dur­ing this new fi­nan­cial year will be in­jected into the Rubyanna and Mul­ti­plex projects as well as a new an­i­mal pound fa­cil­ity which we have as­cer­tained are projects of im­mense com­mu­nity and eco­nomic ben­e­fit.

“The com­mit­ment by coun­cil to re­duc­ing debt is ev­i­dent in its sched­uled fu­ture bor­row­ings.

“We an­tic­i­pate that in the 10 years from 2016/17 to 2025/26 coun­cil will, in to­tal, bor­row $63 mil­lion. How­ever, through debt re­demp­tion over that same pe­riod we will end the 2025/26 fi­nan­cial year with debt of just over $47 mil­lion,” said Cr Dempsey.

“The adopted bud­get pro­vides some very big num­bers when we talk of op­er­a­tional rev­enue of $172 mil­lion, op­er­a­tional ex­penses of $168 mil­lion in­clud­ing a cap­i­tal ex­pen­di­ture bud­get al­lo­ca­tion of $124 mil­lion. We an­tic­i­pate end­ing the 2016/17 fi­nan­cial year with a sur­plus of $4.2 mil­lion.

“I want to as­sure res­i­dents that coun­cil is be­ing run as a very ef­fi­cient and cost-ef­fec­tive busi­ness with a fo­cus on max­imis­ing a re­turn from ev­ery dol­lar re­ceived and sub­se­quently rein­vested in our re­gion.”

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