Asset expansion is a hot topic for all tiers of government, with billions of public dollars ploughed into new assets including millions of dollars for expansion of council assets.
At the end of the day the question of affordability is a major issue and the council is about to complete a full review of its assets to assess the long-term funding needs to maintain these assets.
Local government relies on a mix of rate revenue, user fees and charges and grants to provide services and manage its assets, but NSW rates are subject to Rate Pegging, a system where the increase of gross charges for a council’s General Purpose Fund is limited.
User fees and charges are not subject to Rate Pegging, but councils have typically applied CPI-style increases unless there was a specific local need to bring the cost of service more into line with the internal costs of providing the service.
Grants are typically provided for a specific purpose and may not be used contrary to that, a sewerage grant cannot be used for roads.
Each year the NSW government distributes federal government funds under the Australian Government Financial Assistance Grant programme.
Hilltops Council’s infrastructure, property, plant and equipment assets for the period 13/5/2016 to 30/6/2017 was valued at more than $539 million, but the assets incurred a depreciation and amortisation cost of more than $15 million.
The funding limitations experienced by local government are challenging and the council recognises the huge job ahead managing its assets and establishing service levels acceptable to the broader community in terms of cost and quality.
Have a great weekend and thanks to all our volunteers.