Challenges remain for the region
$56m works underspend
COMPLETING its budgeted capital works program each year and replacing ageing infrastructure are Toowoomba Regional Council’s two biggest challenges for the future, according to finance and business strategy chair Cr Mike Williams.
Council set aside $196 million for capital works in the 2016/17 financial year, yet according to Cr Williams, only about $139.9 million of that was spent - a $56 million difference.
While that’s good for the council’s financials, it effectively means the council is not delivering to community expectations, Cr Williams said.
“Some of that is in our control, some of it is not, but we shouldn’t promise (projects) if we can’t actually deliver it.”
“We’re not delivering all of what we would like to in 12 months. That’s been an issue for council now for a number of years.”
In other respects, the Toowoomba region has been a victim of its own success when it comes to replacing infrastructure.
Because Toowoomba is a growing region, the council has had to spend significant sums of money on new infrastructure, at the expense of renewing older assets.
Cr Williams said the council records about $87 million a year in depreciation, which reflects “the impairment every year on our assets”.
Accordingly, that’s the number that should be spent on asset renewals - such as upgrading old water pipes, roads, and other pieces of community infrastucture.
Council’s target spend for asset replacement is about 90% of depreciation.
Last year, it dropped to 82%.
This year, it plummeted to 44%.
“We’ve had a few challenges over the last few years and it’s well known we’ve had to build a lot of assets. We have a growing community which means we have to invest in new infrastructure, but what we want to do is get that asset sustainability ratio back up around the 50-60% mark,” Cr Williams said.
“That is one of our really big challenges.”
Cr Williams’ comments come off the back of yesterday’s release of the council’s 2016/17 annual report. Mayor Paul Antonio said the report showcased the council’s financial resilience despite a “tight fiscal environment”.
Part of that reslience came off the back of ratepayers, who coughed up an additional $11 million in rates, levies and charges compared to the previous financial year.
The report showed the council maintained its financial rating by the Queensland Treasury Corporation as ‘sound with a neutral outlook’.
The council recorded an operational surplus of just over $7 million, while managing to pay down $11.6 million of debt.
More than 4,000 development applications were progressed last year.
The report showed the council is responsible for more than $4.5 billion worth of property, plant and equipment.