THAT SINKING FEELING: Gympie Regional Council's cash and cash equivalents are forecast to disappear by 2022 and not return until 2027 in its latest budget.
THAT SINKING FEELING: Gympie Regional Council's cash and cash equivalents are forecast to disappear by 2022 and not return until 2027 in its latest budget. Scott Kovacevic

The vanishing finances of Gympie Regional Council

GYMPIE Regional Council has admitted there is work ahead in the face of financial forecasts that predict its cash reserves will vanish in the next three years.

The budget handed down this week shows the council's cash and cash equivalents will plummet from $27 million at the start of the 2019-20 financial year to nothing by the end of the 2022-23 year.

It will remain in the red until 2026-27.

After this, the forecast is that cash and cash equivalents will rocket back up to $6.1 million in 2026-27 and $28 million by 2028-29.

MORE NEWS FROM THIS WEEK'S COUNCIL BUDGET

The $27 million expected to be available at the start of the new financial year is itself a huge drop from just three years ago when the 2016-17 budget had $71 million in cash and cash equivalents.

Councillors Hilary Smerdon, Dan Stewart, Glen Hartwig, deputy mayor Bob Leitch, mayor Mick Curran, Bob Fredman, Mal Gear, Daryl Dodt and Mark McDonald.
Councillors Hilary Smerdon, Dan Stewart, Glen Hartwig, deputy mayor Bob Leitch, mayor Mick Curran, Bob Fredman, Mal Gear, Daryl Dodt and Mark McDonald. Renee Albrecht

A council spokeswoman said the council "acknowledges the financial position and the work which will need to be undertaken to address this forecast”.

"Council will be working, as addressed in the council ordinary meeting on Wednesday, to pull back the figures in the outer years into positive territory by reviewing various areas within council to deliver efficiencies and effectiveness over the next three to five years.”

She said it should be noted forecasts in outer years "can be unreliable as there are many variables that cannot be taken into account”.

Mayor Mick Curran begins his budget speech.
Mayor Mick Curran begins his budget speech. Scott Kovacevic

And there was already some good news.

She said efficiencies and income streams had already been identified since the budget financial model was prepared in May.

These have boosted their cash and equivalents by $10 million.

CEO Bernard Smith and Mayor Mick Curran.
CEO Bernard Smith and Mayor Mick Curran. Phil Coquerand

The declining reserves themselves were driven by the choice to fund significant projects from cash instead of borrowings.

And in this area the council was well placed.

"Our borrowings are in general much lower than other medium to large councils,” she said.

Mayor Mick Curran has previously defended the council's choice to dip into reserves for major projects such as the aquatic centre.

This project alone was funded to the tune of $10 million in reserves.

Cr Dan Stewart at the chambers.
Cr Dan Stewart at the chambers. Renee Albrecht

Cr Curran said that in 2017 the Queensland Audit Office had noted the council's reserves were too high.

The budget's cash reserves forecast is another piece of a financial puzzle that includes several years of operational deficits.

CEO Bernard Smith said at this week's meeting the council would have a "sharp focus” on costs and finding efficiencies within the organisation.

Gympie Times


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