Onkaparinga Council debt projected to hit $117 million in 2021
Adelaide’s largest council has adopted its annual business plan which has its projected debt in the hundreds of millions.
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Adelaide’s largest council’s debt level is expected to hit more than $117 million next year as it grapples with the fallout from the coronavirus pandemic and an expanding population.
Onkaparinga Council on Tuesday night adopted its 2020-21 budget, which forecasts the rise in its debt level, up from $78 million just two years ago.
The business plan includes $206.6 million in spending, $55.9 million of which will go on capital works.
Rates – which have been frozen at 2019-20 levels in response to the COVID-19 pandemic and the associated financial pressure on ratepayers – will bring in $138.3 million.
The council’s chief financial officer, Anthony Spartalis, said the increased debt was preferable to increased rates.
“A growing and expanding city requires critical and new infrastructure to meet the needs of a growing population and we use debt to fund this expansion,” Mr Spartalis said.
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“Rates increases the burden on the current community, even though the benefit of infrastructure will be derived over the life of the infrastructure – typically decades.
“Using debt to fund infrastructure allows us to spread this burden over current and future communities – those that will ultimately benefit from the use of the infrastructure.
“This is a much more equitable way to spread the cost of infrastructure provision, and it’s what we refer to as generational equity, a principle we adopt to rate fairly.”
The council’s projected debt for 2019-20 was $114.2 million but at its third budget review that dropped to around $95 million.
Playford Council has accumulated a $140 million debt as it grappled with replacing ageing infrastructure.