Water woes means red ink flows for troubled Glenorchy City Council

GLENORCHY commissioner Sue Smith has warned the council risks falling further into the red regardless of whether the State Government takes over TasWater.

Glenorchy Commissioner Sue Smith adopted the Glenorchy City Council’s proposed budget for the coming year. Picture: RICHARD JUPE

GLENORCHY commissioner Sue Smith has warned the council risks falling further into the red regardless of whether the State Government takes over TasWater.

At a special general meeting on Monday afternon, Ms Smith accepted the 2017-18 budget estimates for the council.

While rates just rose by 2.5 per cent for the coming year, the council is predicted to record a $3 million turnaround with the deficit for 2017-18 to be $1.7 million despite recording a $1.3 million surplus in 2016-17.

Glenorchy acting general manager Tony McMullen said the original deficit was set to be around $470,000 but a $1.17 million Financial Assistance Grant from the Federal Government came earlier than expected, which meant it was credited to the previous financial year.

Glenorchy Council acting general manager Tony McMullen. Picture: RICHARD JUPE

Ms Smith commended the work that council staff had conducted in preparing the budget but she did warn about the future impacts changes to the council’s distributions from TasWater could have on future bottom lines.

Before the State Government announced its plan to take over the ownership of TasWater, Tasmania’s councils agreed to halve the dividends they receive to fund necessary infrastructure improvements.

Glenorchy will receive a $3.2 million dividend from TasWater in 2017-18 and Ms Smith said the council needed to start planning for changes even if the State Government’s takeover is not successful.

“I think if ... the status quo remains, and I say if, the distributions will continue to be half of what we previously have gotten and possibly even halved again,” she said.

“And if the State Government takes over TasWater then there will be $168 million of assets that will be removed from the balance sheet and that will make a difference.”

Treasurer Peter Gutwein has said that as part of a State Government takeover, councils will receive dividends from the State Budget.

Ms Smith said she was worried about what effect this could have on the council’s future budgets.

”This could make a difference of $1.5 million to the budgets that council are preparing,” she said.