RICHMOND Valley Council has achieved several strong results in its 2018-2019 financial report, with the organisation exceeding a number of key industry benchmarks set by the NSW Office of Local Government.
The draft 2018-2019 financial report, considered by councillors at last night’s meeting, includes notable improvements in depreciation management, debt servicing, collection of outstanding rates and charges, and overall operating performance.
With councils across NSW under pressure to meet a range of financial performance indicators, General Manager Vaughan Macdonald said it was reassuring to see steady improvements in Richmond Valley Council’s bottom-line results.
“Richmond Valley Council is committed to long-term financial sustainability,” Mr Macdonald said.
“With $851 million in assets under our management, and almost $60 million in annual operating expenditure, we have a responsibility to the community to ensure our organisation is consistently well managed over the long term.
“To this end Council is continuing to meet and exceed several benchmarks set by the Office of Local Government, and we are pleased to say that in 2018-2019 Council achieved significant improvements in some of these key performance measures, with the majority remaining above the industry benchmark.”
Mr Macdonald said one of the biggest challenges faced by all councils was ensuring they kept pace with the depreciation of their substantial asset base, by allocating sufficient funds to renew those assets.
He said this included Council’s extensive road network, stormwater, water and sewerage infrastructure, community buildings and sporting facilities, parks and playgrounds.
“Council achieved a significant result on this measure in 2018-2019, with our Buildings and Infrastructure Renewals Ratio increasing from 86% to 118%,” Mr Macdonald said.
“This is well above the benchmark of 100% and means Council is renewing its assets faster than they are depreciating.”
Mr Macdonald said Council’s total revenue in 2018-2019 had increased from $60 million to $70.1 million, primarily due to a significant increase in capital grants, including a $7 million grant for the upgrade of the Northern Rivers Livestock Exchange and multi-million dollar grants for the Woodburn Riverside Park and Casino Drill Hall upgrades.
He said while Council achieved a surplus of $10 million in the 2018-2019 year, this too was primarily due to more than $17 million in capital grants and contributions.
He said in constructing new buildings, which were fantastic facilities for the Richmond Valley community, Council had to write-off of a number of old assets. As a result, there was an increase of $3.114 million in net losses from their disposal.
He said this was the main driver in Council’s operating result before capital grants and contributions achieving a loss of $7.335 million in 2018-2019.
“While it appears Council’s operating result before capital grants and contributions is in decline, the more effective benchmark, our operating performance ratio, has improved because it doesn’t include the write-off of old assets,” Mr Macdonald said.
“Constructing new facilities for the community is an essential part of our Community Strategic Plan. This means, on paper at least, we experienced an operating loss.
“When we invest these grants in our community assets, they are not included in our regular expenditure, but instead are added to our asset base.
“Council has an obligation to maintain these assets, which is a critical requirement of maintaining our financial sustainability over the long term.”