TALL TASK: Mayor Glen Hartwig and Deputy Mayor Hilary Smerdon have been welcomed to their new roles by more borrowing, potential job cuts and another deficit.
TALL TASK: Mayor Glen Hartwig and Deputy Mayor Hilary Smerdon have been welcomed to their new roles by more borrowing, potential job cuts and another deficit.

$4.2 million loss looms for cash strapped council

A GRIM picture of Gympie Regional Council’s financial position continues to emerge as more borrowing, job cuts and a $4.2 million operating loss loom large.

A general meeting yesterday was dominated by financial issues as councillors eye a return to balance in 2021-22.

But there’s still work to be done, starting with cash flow questions.

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The council could be forced to borrow up to $20 million as a result of ongoing cash flow concerns.
The council could be forced to borrow up to $20 million as a result of ongoing cash flow concerns.

A request to borrow up to $10 million from Queensland’s Treasury was approved as concerns linger over whether the council has enough cash to keep things running for the next six months.

And there were warning signs.

“When council adopted its budget for the 2019-20 financial year it forecast insufficient cash reserves at year’s end to maintain business operations,” acting chief financial officer David Lewis said.

“At this point in time it’s very borderline if we have sufficient cash (to run the business).”

Last year Gympie council (Hilary Smerdon, Dan Stewart, Glen Hartwig, Bob Leitch, Mick Curran, Bob Fredman, Mal Gear, Daryl Dodt and Mark McDonald) approved a budget which forecast “insufficient cash reserves at year’s end to maintain business operations”, acting Chief Financial Officer David Lewis said yesterday.
Last year Gympie council (Hilary Smerdon, Dan Stewart, Glen Hartwig, Bob Leitch, Mick Curran, Bob Fredman, Mal Gear, Daryl Dodt and Mark McDonald) approved a budget which forecast “insufficient cash reserves at year’s end to maintain business operations”, acting Chief Financial Officer David Lewis said yesterday.

There was hope no cash would be needed from the QTC, but the likelihood of bringing forward projects tied to “tight funding streams” and the as yet unknown impact of the pandemic on rate payments later this year threatened to “place a stress on our existing cash reserves”.

Deputy Mayor Hilary Smerdon said it was a “sad day” for the council.

“When I got on the council in 2016 we were quite (financially sound),’’ he said.

“As that term progressed we were told on numerous occasions we were living beyond our means … but this was ignored.”

Mr Lewis said the council expected to finish this financial year with a $4.2 million operating loss.

A forecast $4.2 million deficit this financial year would be the council’s third loss in a row, and fourth in five years.
A forecast $4.2 million deficit this financial year would be the council’s third loss in a row, and fourth in five years.

It would be the council’s fourth deficit in five years, and its third in a row – albeit the lowest.

Another $9.8 million in borrowings is under consideration to allow projects like the Monkland waste transfer station and work on water assets to go ahead.

This would “reduce the immediate impact on council’s unrestricted cash” and make it an intergenerational cost, the council’s resolution said.

Job cuts are on the cards, too – the same resolution includes “options” for changes to the council’s structure and staffing levels.

Acting CEO Pauline Gordon said no decisions had been made and every stone would be overturned in the search for savings.

Acting CEO Pauline Gordon said no decisions on the number of job cut – if any – had been made by the council. Any proposed changes will be brought to the council at a special meeting on July 24.
Acting CEO Pauline Gordon said no decisions on the number of job cut – if any – had been made by the council. Any proposed changes will be brought to the council at a special meeting on July 24.

“Part of the (staff) consultation includes being able to inform the council of the potential impacts to service delivery,” Ms Gordon said.

It is understood this may include not filling several positions already vacant.

Any decision on cuts will not be made until a special meeting on July 24.

Gympie Times


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