Councillors concerned as region on track to enter third year in deficit

‘Challenging times’: Mayor Brett Otto has expressed concern the South Burnett may be headed down a dangerous financial path if drastic action isn’t taken.

Mayor Brett Otto has expressed concern the South Burnett may be headed down a dangerous financial path if drastic action isn’t taken. File Photo.

Mayor Brett Otto has expressed concern the South Burnett Regional Council is headed down a dangerous financial path, mirroring our northern counterparts, with early estimates revealing an $8 million deficit for the coming financial year.

Attending the North Burnett Regional Council’s Between a Rock and a Hard Place session in Gayndah last night, Mayor Brett Otto commended the north’s transparency with the community and expressed grave concerns the South Burnett will find themselves in a similar position if the deficit persists.

Calculating the council’s expenses over the next 12 months in relation to rates and income, Cr Otto said the first set of figures are indicating an $8 million deficit, meaning the council will have $8 million more in expenses than income.

“That would be on the back of the current year‘s deficit, which is $4.56 million, and the deficit under the previous Council, which was about $2.8 million,” Cr Otto said.

“So if we have a deficit again this year it will be the third year that we‘ve had a deficit, and our council’s quite concerned about that.”

Cr Otto said the $8 million is an early estimation and the council will be working to reduce that number over the next two months.

“It‘s very challenging,” he said.

“We’ve seen government support for some of our regional councils consistently reduce over a number of years now and we’re having to rely more heavily on the ratepayers.”

“But our ratepayers are doing it tough in this region with drought, we've got a large ageing population with a number of pensioners, and of course, small businesses trying to get back on their feet after COVID.”

While nothing is set in stone at this point, if expenses cannot be lowered enough, rates may increase for the South Burnett community.

Like the North Burnett council, who can longer borrow from the Queensland Treasury, Cr Otto said the council is concerned that similar circumstances could mean disaster for the south.

“If we end up in that situation, we’re not going to be able to raise the money we need to replace critical infrastructure, such as our water and sewerage assets that are getting old and deteriorating,” he said.

“We’ve got some major capital costs particularly with water assets in Kingaroy, and if we can’t borrow, we’re not going to be able to replace and renew those assets.

“That’s going to put our water supply system at significant risk.”

Over the next 10 years, the council will be tasked to find $115 million for water replacements, in addition to funding other capital costs such as wastewater and roads.

“We‘ve got a major issue with Gordonbrook Dam coming up where we’re going to have to spend approximately $12 million just to fix the spillway to comply with safety standards,” Cr Otto said.

“We haven‘t got $12 million that we can just pluck out of the air, we’ve got to find that from somewhere.

“And at this stage, it looks as though we'll most likely have to borrow that money.”

With Gordonbrook Dam currently at 48 per cent capacity, making it extremely difficult to treat and meet Australian drinking water standards, residents rely heavily on the Boondooma Dam to supply them with water.

Cr Otto said if the Boondooma pipeline were to fail, it would spell disaster for the Kingaroy community.

“If the pipeline was to go down, that would give us major issues in being able to supply town water to Kingaroy, both to residents and to the commercial operators in town,” he said.

“At the moment, we are in a precarious position in that, if the Boondooma pipeline was to go down for any reason - for repairs, maintenance or if the power generator went down - we would have a major problem in supplying Kingaroy with water.”

Cr Otto said the council has a strategy to fix this problem, but that strategy will cost upwards of $20 million.

“We‘re in a very similar position to North Burnett,” he said.

“We‘re just not getting enough government funding to be able to continue to meet the services that our community needs without having to raise rates.

“But I’m very conscious of the impact that raising rates has on the livelihood of our region. It can also be an economic inhibitor, turning people away from our region.”

Cr Otto said the community needs to be aware the council is staring down the barrel of a gun at some serious financial risks in the future, and residents are urged to voice their opinions.

“The North Burnett’s situation is further down the track than us, but what we’d like to do here is make sure we get in early,” he said.

“That we nip it in the bud and get ourselves on a better course so that we don’t end up in a similar situation to North Burnett, where they’re having to seriously consider cutting services around pools, libraries, and council offices.”

Originally published as Councillors concerned as region on track to enter third year in deficit