Budget review reveals capital works savings

A mid-year budget review of Baw Baw Shire’s finances has revealed a number of savings on key capital works projects.

Officers estimate council has saved about half a million dollars on capital works projects including the Trafalgar landfill rehabilitation, Tarwin St Retarding basin, Ellinbank changerooms, Eastern Park training lights and Eastern Park toilets.

A report presented to council said the review identified forecasted cash savings of $1.2 million including $700,000 operating expenses and $500,000 in capital works. Officers said the $700,000 savings included: $350,000 rates and charges – supplementary rates increased due to rates and waste charges for new properties and extensions to houses; $140,000 increase in grants; $90,000 additional income mainly relating to the West Gippsland Arts Centre café;

$140,000 employee costs – forecast overrun in salaries due to acquisition of Utopia Pet Lodge and new compliance positions not approved until after the budget was adopted; and,

$300,000 expected savings in a range of service areas.

The income statement reported a year-to-date surplus of $4.4 million which was a $1.5 million favourable variance.

The full year forecast position for the income statement reports a surplus of $19.4 million that represents an unfavourable variance of $1.3 million when compared to the adopted budget.

Officers said the unfavourable variance mainly included depreciation variance of $877,000 as well as lower than budget capital grants of $935,000.

The cash flow statement for council reported forecast cash at the end of the financial year as $13.8 million that represents an increase in cash flow of $3.75 million.

Cr Danny Goss said it was very pleasing to see forecast savings of $700,000 in recurrent expenditure and half a million in capital expenses compared to the budget.

He said council’s finances were in an excellent position.

Cr Keith Cook said sometimes surpluses were not good in the eyes of ratepayers but this was due to the good work of staff who were able to achieve “this fantastic result”.