Council's $16m surplus overshadowed by questions over food company's water deal
Council's healthy balance sheet masks mounting tension over a contentious water agreement as infrastructure costs soar across Richmond Valley.
Richmond Valley Council has announced a strong financial position for the 2024/2025 financial year, with audited statements revealing a substantial $16.111 million surplus from continuing operations.
This positive fiscal news, however, sets the stage for a critical debate at Tuesday night’s ordinary council meeting, where significant financial pressures and a contentious, decade-old water pricing agreement will be scrutinised.
External auditors delivered an ‘unmodified opinion’ on the annual financial statements, affirming the council’s financial health as of June 30.
The council’s net assets stand at an impressive $1.208 billion, underpinned by $80.141 million in cash and cash equivalents, according to council documents.
The council’s director of organisational services, Ryan Gaiter, noted council’s substantial net assets and sufficient working capital to manage daily operations and unforeseen expenses.
Despite this strength, the operating result before capital grants and contributions showed a $15.768 million deficit.
This was largely attributed to the current economic climate, marked by escalating material and labour costs, ongoing natural disaster recovery efforts following the 2022 floods, and increased depreciation from annual asset indexation.
“Overall, council is in a sound financial position, boasting net assets of $1.208 billion and sufficient available working capital to manage day-to-day operations and safeguard against unforeseen expenditure,” Mr Gaiter said.
Further positive indicators include the quarterly budget review statement for the quarter ending September 30, which shows council’s actual revenue tracking 10 per cent higher than the previous year.
This uplift is primarily due to a payment under a tripartite arrangement, bringing Essential Public Asset Restoration Funding from the 2022 floods to 90 per cent paid, according to council documents.
The projected capital works program for 2025/2026 is a substantial $87.68 million, an increase of $4.18 million, signalling continued investment in local infrastructure.
Council officer Zakari Witt acknowledged the complexities of delivering such ambitious projects, stating the capital works budget would be closely monitored due to risks like contractor availability and weather delays.
A major point of contention, however, will be a review revealing that Casino Food Company Ltd, the region’s largest water consumer, has saved over $13 million in the past decade due to a confidential agreement established in 2012.
The report noted that the price per kilolitre paid by other non-residential customers had increased more steeply in real terms compared to the rate paid by the Food Company Ltd, raising significant questions for local businesses and agricultural producers.
With council embarking on one of its largest capital investment programs – requiring $42 million for water infrastructure and $124.7 million for sewerage works over the next decade – the pressure to achieve “full cost recovery,” in line with NSW Department of Climate Change, Energy, the Environment and Water (DCCEEW) guidelines, is intensifying.
Mr Gaiter noted that while Casino Food Company Ltd has saved over $13 million in the past decade through its agreement, ongoing review of options is crucial to fund essential infrastructure upgrades for the entire community’s benefit.
Council has resolved to continue consulting with the Casino Food Company Ltd and other stakeholders, with a further report on future water pricing structures expected before the 2026/27 budget preparation.
The meeting will also include the receipt of the 2024/2025 Annual Report, detailing progress on the Delivery Program and Community Strategic Plan outcomes.
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Originally published as Council's $16m surplus overshadowed by questions over food company's water deal
