Fi­nances ques­tioned

Whitsunday Times - - WHITSUNDAY VIEWS -

COUN­CIL­LORS Will­cox, Ra­m­age and Clark are to be con­grat­u­lated, re­ject­ing the bud­get with­out proper fi­nan­cial ex­pla­na­tion. This ex­tra­or­di­nary $9.4m rate in­crease to $63m (17.5%), or an aver­age $525/lot, will be even higher and a disas­ter for many busi­nesses/ratepay­ers with ex­cess wa­ter. This is four times last year’s 4.5%.

With a $2.5m em­ployee cost over­spend posted (was $9m, un­til the CFO moved it out on bud­get day) added to $10m W&S pro­ject over­spend ($99m dis­closed by QTC), we’ve over­spent $34m in 2013.

I wouldn’t be sur­prised if over­spends are now dou­ble the $21m, spawn­ing the $10m loan (as dis- cussed with Messrs’ Wa­ters and Will­cox).

Since then I was gob-smacked. 2013 sur­plus in­creased again to $45m ($30m above the pre­vi­ous regime’s bud­get), then a $10m in­crease in 2014 rates, saw a 2014 $17m deficit.

Sim­i­larly, touted “$1m in em­ployee cost sav­ings”, is now a $2.5m in­crease, imbed­ded with 4% com­pound­ing in­crease p.a.

So much for “on-go­ing ef­fi­ciency sav­ings”, with vir­tu­ally no sur­plus to speak-of there­after.

Yes, the CEO in­her­ited the loss of key ex­pe­ri­enced staff at the worst pos­si­ble time dur­ing a $300m cap­i­tal pro­gram. But he must now ex­plain what ad­di­tional over­spends since; why WRC let go $38m of free 2011 NDRRA pro­grams and the sta­tus of un­spent NDRRA funds, which con­trib­ute to this un­ex­pected huge rate in­crease.

Cur­rent $78m (loans/debt) were never the prob­lem.

Re­pay­ing $10m in three years (not 15+ years like all in­fra­struc­ture loans; ab­sorb­ing $1m p.a.), pe­nal­is­ing ratepay­ers and man­age­ment cost dis­clo­sure are now ratepayer’s prob­lem. John W Barnes Bowen

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