Last week Council announced an operating deficit of $1.099 million which is almost $4 million less than the original budgeted operating deficit of $5.068 million for the financial year 2014-2015.

Douglas Shire Council Financial Statements 2014-2015

Council has attributed the almost 80 per cent improvement to revenue exceeding expectations including increased grant funding, increased development applications, increased investment interest returns, rates revenue, operating efficiencies and cost savings in materials and services.

Newsport asked Council how this 80 percent improvement in revenue managed to exceed their expectations and what were the mitigating circumstances for these unexpected improvements to revenue.

Mayor Julia Leu responded saying that the improvements to revenue was due to the increases in the revenue streams as mentioned above. There was no explanation as to the circumstances for the unexpected improvements to revenue.

Attached to this article are the Douglas Shire Council Financial Statements 2014-2015 as well as below the Budget Vs Actuals report that identifies the areas in which there was a significant increase in actual revenue received, depending upon from which budget column the comparative is derived, either using the Budget Adopted or Budget Revised compared to the Audited Actual column.

Based on Councils media statement announcing that the “financial result - $4 million better than anticipated”, it would appear this would be based on the Budget Adopted column.  The Operating Result for the Budget Adopted 27/06/2014 being a deficit of $5,068,447 less the Audited Actuals deficit of $1,099,455 indicates the $4 million improvement in the budget forecast deficit.

This being the case, the real significant increases in revenue received when comparing those two columns was from grants, subsidies, contributions and donations with an approximate 172 percent increase and interest received with an approximate 77 percent increase.  There was a 25 percent increase in fees and charges received.  Net rates and utility charges revenue only increased by about 1.2 percent and other recurrent income was up around 6 percent.

Overall the total operating revenue was up around 9.5 percent.  Total operating expenses were decreased by around 1.9 percent.

Mayor Julia Leu said it is a remarkable result for Council in its first full financial year since de-amalgamation.

“Our operating result is substantially better than forecasted, financial ratios are trending positively and the target of a balanced budget in 2019/20 is well within reach,” Mayor Leu said.

In order to sustain itself while still operating with a deficit, Mayor Leu advised that Council has adopted a five-year strategy to achieve a budget surplus by 2019/20. 

The full audited financial report shows financial ratios will balance in 2020, given there was a $4 million better result for 2014-2015, we asked why would that surplus not be achieved sooner than 2020.

“Council is taking a conservative approach to achieving a budget surplus to limit rate rises and ensure optimal service delivery. If the budget bottom line improves further and Council is able to achieve this sooner then obviously we will strive towards that.

“The fact Council has managed such a positive financial result in its first full financial year demonstrates this strategy is very achievable and the Douglas Shire is a financially sustainable Local Government Area,” said the Mayor.

When asked if there will be any services cut the Mayor stated no, it would be quite the opposite.

“Council is constantly investing in our operations to improve services for our communities, which is demonstrated by the 10 percent increase to our workforce since de-amalgamation."

Significant rate increases is on the minds of the electorate and the Mayor stated that any rate increases will be a consideration for the new Council after the local government elections in March 2016.

“However, the five-year financial strategy budgets for modest annual rate increases, as do the vast majority of all councils," said Mayor Leu.

With the unprecedented $19.5 million capital works program for the 2015/16 financial year, an increased workforce since de-amalgamation to improve service levels, as well as having more local businesses and contractors engaged with Council than ever before, Council is investing more in materials and services locally than ever before.

In August Council announced that 207 suppliers of goods and services were register as pre-qualified suppliers with Council including 68 businesses from the Douglas Shire.  A further 57 businesses and contractors, many form the Douglas Shire, are now also pre-qualified suppliers for wet and dry machinery hire since de-amalgamation stated Mayor Leu.

“Council collaborates daily with a wide range of local business as well as organisations such as Tourism Port Douglas Daintree and the Douglas Chamber of Commerce, more than any other government organisation or private enterprise.  Council’s level of community engagement on a range of issues is also greater than ever before.

“We are proving that local communities can manage their own best interests by being innovative and delivering services, projects and programs more efficiently and with a greater benefit to our communities.

“Although we are delighted with this impressive financial result, for Council our priority is on continued improvement to help the Douglas Shire realise its full potential and we are determined to continue striving for better outcomes for our communities.”

“Financial sustainability is the primary focus of this Council and this financial result demonstrates we are well on the way to securing the future of the Douglas Shire for future generations,” said Mayor Leu.