QTC review identifies financial uncertainty in previous Council forecasts

A Queensland Treasury Corporation review of Redland City’s long- term financial strategy has re-confirmed concerns previously raised, Mayor Karen Williams says.

Councillor Williams said the QTC had vindicated her decision to commission the review to test the robustness of parameters adopted in the previous Council’s Financial Strategy.

“While the review found council had a sound balance sheet with a low level of debt, the QTC said projected rate increases were well above the Reserve Bank’s target CPI,” Cr Williams said.

“The QTC also told us that the plan to deliver an operating surplus was dependent on achieving undefined operating efficiencies.

“It found that key observations noted in the credit review provided by QTC in November 2011 as areas of concern were found to have continued significance for council today.

“The concerns were that a return to surplus was highly dependent on achieving high operational efficiencies, increases in net rates and utilities charges of at least 5 per cent per annum, successful reintegration of council’s water business and the impact of the carbon tax.”

Mayor Karen Williams said the review raised questions about operational efficiencies relied on by the former council to drive savings, noting that Council was not able to provide the QTC with information on where these previously proposed efficiency gains were expected to arise.

“I promised to make council more effective and efficient in delivering its services, to keep rate rises at or below the inflation rate and to slash red tape,” she said.

“I have never accepted the need for a continuation of high rate rises we have seen in recent years.

“As Mayor of the new council, I am committed to delivering on my promise of helping ratepayers with the escalating costs of living and to create an environment to help business generate more jobs for the people of Redlands now and into the future.

“I want everyone to know that Redland City is the best place in Queensland to live, work and play and that we are again open for business.”

Councillor Williams said the review highlighted the difficulties that would be faced in future years keeping council rates, fees and charges to a minimum.

“The review found the financial strategy’s key assumptions appeared reasonable when compared to historical trends and market observations and this helps provide a platform to take us forward,” she said.

“Significant savings will be generated this financial year with the reintegration of water business to the council and this will be returned to residents via their rates notices.”