The hidden timebomb ticking in Council's 2019-20 Budget
COUNCIL'S 10-year Budget forecast shows a decreasing deficit trend.
This helps build Council's "sustainability profile,” Mayor Rachel Chambers.
The operating surplus ratio, which measures revenue against expenses, is currently at -22.16 per cent, forecast to drop to -14.66 per cent in 2029.
Queensland Treasury Corporation's target is for between 0-10 per cent.
But, as Cr Chambers noted in her Budget speech, only 33 out of 77 Queensland councils have an operational surplus.
However, over this same 10-year period, Council's asset sustainability ratio, which measures capital expenditure on replacement assets against depreciation, falls alarmingly.
The Budget shows it is at 123.79 per cent this year, but by 2029, it will have fallen to 69.65 per cent.
The Corporation's target is for more than 90 per cent.
In its Financial Performance: A Quick Reference Guide for Elected Officials and Staff document, the Corporation warns that, "If your ratio averages less than 90 per cent over time, your council is at risk of not being able to continue to provide services.”
A Council spokesman said that efforts to reduce reducing operating expenses do not impact the asset renewal budget.
"External funding programs such as Roads to Recovery and Transport Infrastructure Development Scheme are only known for a five-year period and therefore cannot be built into long term assumptions and forecasts, which forms part of the reason for the decreasing asset sustainability ratio,” he said.
"It is extremely difficult to produce a 10-year forecast when State and Federal Governments do not produce a 10-year forecast for funding availabilities.”