Hobart City Council prepares five-year plan to improve finances

State and federal governments are being asked to cough up cash to help care for some of Tasmania’s biggest tourist attractions, as a local council stretches its budget to maintain them out of its coffers.

HOBART City Council is preparing for a year of belt-tightening as it works on a five-year plan to improve its dire finances.

Lord Mayor Anna Reynolds said the State Government had approved a three-year interest-free loan of up to $31 million to fund the council’s capital works program for 2020/21.

Taking up that offer would take the council’s borrowings to more than $80 million and councillors may first decide to wait and see how the city recovers from COVID-19.

Cr Reynolds said she was actively lobbying both the State and Federal governments for more stimulus and grant funding, arguing Hobart had been largely overlooked for many years.

Hobart Lord Mayor, Anna Reynolds said she is actively lobbying for more cash for Hobart. Picture: Zak Simmonds

The council has already taken out an additional bank loan of $20 million this year to manage cash flow, as it faces an $18 million drop in revenue.

Prior to that the council had eight loans totalling $36 million, with annual servicing costs of $5.44 million, which is nearly four per cent of revenue.

That included a $4.8 million loan taken out in 2006 to buy Porters Hill, as well as $10 million in 2018 and $20 million in 2019 to pay for capital works.

Councillor Reynolds said that unlike Sydney, Melbourne and Adelaide, which effectively managed CBD areas only, Hobart had the CBD, 11 suburbs and the kunanyi/Mt Wellington park to look after.

She argued the council had done more than its fair share in maintaining some of Tasmania’s premier tourist attractions including Salamanca and kunanyi and it was now time for the State and Federal governments to stump up some more cash.

Hobart City Council gets very little cash from the state and federal governments to care for its biggest attractions. Picture: Robert Cassidy

“There’s an expectation that we do invest in ensuring a high quality of infrastructure and our rates have to stretch in a lot of ways,” Cr Reynolds said.

“Only about three per cent of our budget comes from state or federal government grants, which is less than some other cities. I think it needs to change. I would like to see more State and Federal investment in some of our assets and attractions of state and national significance.”

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The council has about 600 full time equivalent staff members, including its own maintenance workers and garbage collectors – services outsourced by most councils.

“Some people would argue that makes us a bit more vulnerable because of our obligations to full time staff, but the organisation has been proud to be a good employer,” Cr Reynolds said.

She said next financial year would be particularly tough for the council, which has committed to a freeze on rates and fees and charges.

A three to five year recovery plan will be developed to “help us to deal with future shocks”, Cr Reynolds said.

“Next year is just a holding pattern, a year to maintain our basic operations while we set up our longer-term planning,” she said.