Council’s current debt position

It is prudent and sound financial management for Council to share financial information with our community and ratepayers, and to provide advice on the potential cost of all projects and operations.

This provides our stakeholders with up-to-date information reflecting the current financial position of council.

Council’s debt and Net Financial Liabilities Ratio forecasts are based on the best information available to Council at the time of any assessment. Projected borrowings are planned years in advance.

Since Council’s current Budget, adopted on 2 June 2015, and our audited financials of 2014/15, three main changes have occurred that have altered Council’s projected loans and debt levels.

  1. Council’s liability in relation to the restoration of its landfills has reduced from $60M to $25M in the audited financial statement from 2013/14 to 2014/15.

REDUCED BORROWING $35M

  1. The original cost estimate for the construction of the Rubyanna wastewater treatment plant of $92.8 million has been revised down to $71 million, as a result of a very competitive tender process conducted by Council. This is a great outcome for what is a very significant strategic project.

REDUCED BORROWING $21.8M

  1. Council receiving grant funding from the State Government of $5M for the Multiplex facility and $5M for the Rubyanna Waste Water Treatment Plant.

REDUCED BORROWING $10M

By implementing the above this has greatly decreased our need to borrow previously estimated amounts and our revised current and future budgets will reflect these savings.

Council commenced the 2015/16 financial year with a total debt of $70.1M.

With just $2M borrowed this year Council will finish the 2015/16 financial year with borrowings of $65.6M or a Net Financial Liabilities Ratio of 14.3%.

The Net Financial Liabilities Ratio is an indicator related to debt versus assets and should ideally be reflected in a figure less than 60%.

Council’s forecast debt in 2018/19 based on the projected capital works program will be around $90M and based on Council’s forecast capital works program will be just under $100M in 2020 or a Net Financial Liabilities Ratio of 21.5%.

Council‘s borrowings and debt situation are subject to intense scrutiny by Queensland Treasury Corporation (QTC) and are annually reviewed by independent auditors as part of an audit process.

Borrowings are an essential and legitimate means of Council funding its capital works programs and the community can be confident that Council operates within its capacities to appropriately meet its debt redemption.

While Council’s current and projected debt situations can be found in the pages of Council’s budget papers and Annual Reports, the community should be aware that financial circumstances can change and alter projected figures.

At each Ordinary Meeting of Council financial updates are presented, which align Council income and expenditure with budget estimates.

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