The war of words over the financial prospects of a re-formed Douglas Shire Council has dominated the de-amalgamation issue to date.

But a local accountant has gone to the history books and says the last DSC was in economic dire straits in the lead up to merging with Cairns City Council.

According to Terry Hooper, principal of Terry W Hooper Chartered Accountants, if the former DSC had found itself having to operate through to the end of the rating period of 2007/08, it would not have had sufficient cash to meet its operating expenses.

Mr Hooper said that during the latter part of 2006 and throughout 2007 the former councillors and the CEO were at logger heads.

“It got so bad that the Local Government Minister commenced the process of appointing an Administrator. It was amalgamation that stopped this occurring.

“At the time I had discussions with the Finance Manager of the former Council and became concerned about the financial stability of the organisation,” he said.

Mr Hooper said that when the Queensland Treasury Corporation’s report was released last month with a finding that a new DSC would not be financially viable, he was prompted to do a complete financial analysis of the former council in its last year of operation, “to satisfy myself”, he said.

TOMORROW ON THE NEWSPORT: David Carey responds to Terry Hooper's report
 
“What I found was that the audited financial statements prepared as at 14 March 2008 exposed just how dire the Council’s financial position was.

“The cost of operations based on audited accounts was $12.7 million, and cash available for operating expenses was just under $5 million – resulting in a cash shortfall of $7.7 million, which is $885 per rateable property,” Mr Hooper explained.

“People blame the CRC (Cairns Regional Council) for the rates hike in the first year of amalgamation but the reality is that to meet its obligations, DSC would have had no choice but to raise rates.

“The DSC was not in good shape financially. I believe the QTC’s rating of the proposed DSC as very weak cannot be dismissed easily, and that people need to think very carefully about de-amalgamation."

In Mr Hooper's report he conceded there had been two "fundamental mistakes" during the amalgamation process in 2008. He said the new regional council should have had no divisions, and that it should have been named "Tropical North Queensland Regional Council" instead of Cairns Regional Council.
 
A full copy of Mr Hooper's report can also be seen at www.peopleofdouglas.org.

TOMORROW ON THE NEWSPORT: David Carey responds to Terry Hooper's report