Debt still too high for rate base

Whitsunday Times - - WHITSUNDAY VIEWS -

WHIT­SUN­DAY Re­gional Coun­cil ap­pears to be on track for re­duc­ing its debt by $3 mil­lion more than ex­pected by the end of the 2014-15 fi­nan­cial year.

Nonethe­less, mayor Jen­nifer Whit­ney says the re­main­ing level of debt it still “too high for our rate base”.

When the 2014-15 bud­get was adopted in July last year, Coun­cil said it would re­duce its debt from $71 mil­lion to $65 mil­lion by the end of the fi­nan­cial year.

At last week’s meet­ing to adopt the De­cem­ber bud­get re­view it was re­vealed that the pro­jected debt at June 30, 2015, would now be $62 mil­lion - $3 mil­lion less than orig­i­nally fore­cast.

Cr Whit­ney said be­ing able to pay the debt down by $9 mil­lion this fi­nan­cial year was a great re­sult made pos­si­ble due to “the dif­fi­cult de­ci­sions we have made as a Coun­cil over the past two years in­clud­ing sell­ing sur­plus as­sets, fur­ther con­strain­ing ex­pen­di­ture, keep­ing a re­duced levy and in­clud­ing a mod­er­ate rate rise in 2014-15 bud­get”.

How­ever, she stressed “with the debt level we’ve still got, we’re un­able to bor­row”.

The next ‘ big ticket’ item on Coun­cil’s ex­pen­di­ture list is the Bowen Sew­er­age Treat­ment Plant, which has a pro­jected price tag of be­tween $30-50 mil­lion.

Cr Whit­ney said Bowen was in “des­per­ate need” of this fa­cil­ity be­ing fixed.

“And that’s some­thing that will come on the radar within the next five years.”

“The com­mu­nity’s got to un­der­stand we are still be­ing mon­i­tored weekly by QTC (Queens­land Trea­sury) and one of the things we’re await­ing from the gov­ern­ment is the out­come of our credit re­view,” she said.

“Once we have that we’ll take it to Coun­cil and show the com­mu­nity where we’re sit­ting.”

Cr Whit­ney said even though re­duc­ing the debt to $62 mil­lion was ex­tremely pos­i­tive, “we still have a sub­stan­tial way to go”.

“Coun­cil works to op­er­ate as ef­fi­ciently and ef­fec­tively as it can but to con­tinue to stay within its bud­get so that if we can achieve any fur­ther re­duc­tions or sav­ings we do pass those on to the com­mu­nity, be­cause we can’t keep im­pos­ing that debt on the com­mu­nity,” she said.

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