Explained: Byron Shire Council’s draft 2021-22 budget which includes $60M in capital works

Staff have said the council must “be mindful of the financial impacts of future decisions” after a large sum will be drawn from their reserve.

Byron Shire Council “needs to be mindful of the financial impacts of future decisions”, according to a staff report prepared alongside the draft 2021-22 budget.

The council is looking to have a balanced overall budget for the 2021/22 financial year, but this will involve drawing about $14.2 million from the reserves.

According to draft budget documents, the council would have an estimated unrestricted cash balance of $517,600 at June 30, 2022.

Budget documents have detailed the coming financial year would bring the council an estimated operating revenue of $93,579,800 and an operating result surplus of $346,700.

The budget includes a proposed $13.5 million in new loans for a bioenergy facility ($12 million) and the purchase of the First Sun Holiday Park Land Purchase ($1.5 million).

A total of $61.86 million to be spent on capital works is set out in the budget.

This would include $38.799 million from the general fund, $4.015 million from the water fund and $19.050 million from the sewerage fund.

From the general fund spent, $24.902 million has been allocated to road and drainage projects.

The $19 million sewerage spend includes the extra $12 million proposed to be sought through a loan for the planned bioenergy facility.

In their report, the council’s staff have stressed the importance of careful financial decisions in the future, especially as funds have been taken from the council’s reserves, a move they said is “not sustainable”.

“Council is still feeling the impacts of the COVID-19 pandemic with revenue reductions particularly from extreme low interest rates available for invested funds,” the report said.

They said the budget for the coming year was impacted by the superannuation guarantee increasing from 9.50 per cent to 10.00 per cent, although this is yet to be confirmed, insurance premiums, the Emergency Services Levy contribution and a reduction in interest revenue.

“The cumulative impact of (those) four items on the budget is in the vicinity of an extra $1.2 million that needs to be absorbed,” staff said in the report.

“Given Council’s current economic circumstances, it needs to be mindful of the financial impacts of future decisions.

“Council is fortunate at the current levels of grant funding being received and the assistance that brings but grants cannot be relied upon to always be available.”