Statement from the Mayor of Townsville
Date published: 28 August 2018
Townsville City Council’s new debt policy saved rate payers almost $500,000 last financial year.
My Council deferred $30 million in planned borrowings in the 2017-18 financial year due to a better than forecast cash balance.
Earlier this year I handed down the 2018-2019 Budget which included a record $433 million spend on infrastructure.
$159 million this financial year will be spent on progressing Townsville’s new water pipeline, which is at the heart of this Council’s three-point water security solution.
$41 million dollars will be invested in parks and open spaces right across the City - to provide our kids and the broader community with the spaces to play and enjoy the outdoors.
This Council has supported our community by providing more than $3 million in community grants and sponsorships, maintained our $15 million prompt payment discount for residents, and invested heavily in arts, culture and community events.
We’ve achieved this while keeping rate rises in line with inflation at 1.9%, and simplifying or abolishing over 300 Council fees and charges.
At the same time this Council has continued to rein in debt.
Just before I became Mayor, Council’s debt hit an all-time high of $390 million dollars in the 2010-2011 financial year.
Since then I have worked hard to reduce our level of debt, and with a new team, we have tackled the legacy issues that came with amalgamation.
Councillors, we have transformed the way this Council operates, and we set a path towards financial sustainability. I’ve spoken many times about the Nous Report and the reforms we have implemented.
Through prudent fiscal management, we have been able to invest in front line services and infrastructure – at a record rate. This is the dividend to ratepayers of sound financial management.
While doing this we have also reduced our debt from $390 million to $344 million at the end of the 2017-2018 financial year.
Last financial year Council had planned to borrow $30 million to continue investing in shovel-ready infrastructure – but as a result of a better than forecast cash position we decided to defer these borrowings.
The decision to defer saved Council around $500,000 in interest payments over the year.
Today, Council resolved to update its Debt Policy to reflect this decision.
These borrowings are now forecast to be drawn down in the middle of this financial year.
The forecasts are based on Council’s preparedness to respond to a weather event should one occur during cyclone season. It is my hope mother nature spares us, and that we won’t need to actually use these funds.
This reflection of the deferred borrowing in our Budget cycle will not, as the accountants say, have a material impact on the Budget.
The policy now reflects the deferred borrowings of $30 million, and this year’s planned borrowings of a further $30 million.
Source: Townsville City Council budget papers
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