Council finances fair OK but mayor predicts hard times ahead

A report by the Queensland Audit Office has weighed in on the Southern Down’s profitability, but bursting sewers will keep the region stuck in the mud.

CLose up of sewage drain.

The Southern Downs Regional Council has avoided being labelled as unprofitable by a Queensland Audit Office report despite a growing need to secure $30m to upgrade the region’s failing sewerage system.

Southern Downs mayor Vic Pennisi said after uncertain times around four years ago, the council had changed its position over time, but the purse strings were about to tighten to begin replacing half a billion dollars of sewerage works across the region.

Extensive work to the region’s sewerage system, worth an estimated $500m, would flush away any hopes of a cash splash.

Mr Pennisi said the infrastructure, some of which was more than 80 years old, had to be replaced.

“It’s been identified that over the next three years we need to find $30m to just bring our sewage infrastructure up to an acceptable level.”

“I’m not going to sugar coat it, I’ll tell you right now, it’s going to be a challenge going forward.”

Last month a sewerage break in a rising main caused an overflow from the McEvoy Street pump station into Bracker Creek.

Mr Pennisi said he believed the Southern Downs council would not be the only region struggling to cover its expenses.

“The challenge for local government is that for every $100, local government only gets $3,” Mr Pennisi said.

“The model is broken.

“The only way we can raise the funds we need to replace the failing infrastructure we have is through rates and through reign-in methods or selling water or charging a connection fee.”

While Mr Pennisi said he wanted to put downward pressure on rates’ rises, the council was in a position of “do we want that versus do we need that”.

“We need to look at every single activity that the council does and determine whether it’s core business or whether it belongs to the state government or the federal government,” Mr Pennisi said.

The Southern Downs recorded $94.2m in revenue generated from the council’s activities with the report revealing revenue ranged from $11.8m to $2.4b across Queensland.

Mr Pennisi said he believed if an asset was not the sole responsibility of the region to maintain, the Southern Downs council had to “stop doing that”.

The council received good marks for its monitoring of activities, risk assessment, controlled activities, but fared slightly worse for control environment and information and communication.