Geelong councillors reported on the state of the City’s finances with an air of cautious optimism at this week’s meeting.
The council tabled the City of Greater Geelong’s financial report for July to September, which showed an operating surplus of $785,000, $1.4 million improved upon a forecast deficit of $579,000.
That result was mostly driven by materials and services savings to the tune of $3.1 million, which was tempered by supplementary rates bringing $627,000 less in income than expected and a depreciation of property and infrastructure assets of $820,000.
The council’s cash position was also $14.4 million in the black, largely due to delays in capital works this year.
However, the report also included a forecast of the rest of the financial year, which suggested an operating deficit of $5.9 million by next June rather than the budgeted $509,000 surplus.
In addition to a rates shortfall and depreciation, the City is expecting to miss out on $2.1 million from the closure of the North Geelong Transfer Station.
Councillor Andrew Katos, chair of the City’s finance portfolio, said there was “a bit of work to be done” to rein in finances through the rest of the year.
“But as far as financial indicators go, the capital projects delivery was at 85.32 per cent, the working capital at $1.9 (million favourable to the budget), which is good,” he said.
“Pleasingly, the indebtedness ratio…is continuing to fall, we’re down to 46 per cent; this time last year we were just over 60 (per cent)…which is headed in the right direction, as we need to, in the future, have the capacity to borrow.
“So making some tougher decisions last year is certainly starting to bear fruit as far as the council’s debt goes.”
Councillor Anthony Aitken warned such tough decisions could only bear fruit for so long.
“Our overall financial position is relatively healthy, but it’s not sustainable,” he said.
“We’ve got more cash in the bank because we’ve spent less capital…It is not sustainable to continue to underspend in your capital area. You can do it for a few years, but it will start to impact on the level of maintenance…(and) the community’s expectations about what council’s delivering.”
