Councils Get Report Card

Councils Get Report Card

Newcastle Herald

Tuesday June 19, 2007

By JACQUI JONES

THE financial policies of two Hunter councils are not sustainable, two others are vulnerable, one will face moderate to strong pressure and three will experience slight pressure, a report says.

South Australian-based independent organisation FiscalStar has released an assessment of NSW councils with annual revenues from rates and charges of at least $10 million.

The snapshot of councils' 2005-06 audited financial statements and other publicly available information has been reviewed by independent forecaster Access Economics.

FiscalStar rated 95 of NSW's largest councils, using a five-star system.

Port Stephens and Muswellbrook were among 12 given one star, meaning their financial policies are viewed as "not sustainable".

"Going forward, disruptive increase in the council's rates and charges and/or disruptive cutbacks in services seem inevitable," the report said.

Muswellbrook Shire Council's corporate and community services director Russell Esdaile said he did not think the rating was a good reflection of the strength of the council's ability to manage its finances. The strength of its cash reserves and asset maintenance reserves were not taken into account.

Cessnock and Singleton ranked two stars, indicating their finances were vulnerable. Rates and charges would be subject to strong to very strong upward pressure.

Cessnock City Council general manager Bernie Mortomore said yesterday he would not disagree with the assessment, but needed to look at the report in more detail.

Maitland City Council was given three stars, signalling rates and charges will be subject to moderate to strong upwards pressure. The report said such councils may have rates and charges excessive relative to costs.

Lake Macquarie, Newcastle and Upper Hunter councils achieved a four-star rating. Their rates and charges will be subject to slight upwards pressure, may be excessive relative to costs, and may be increasing significantly, the report said.

The Local Government and Shires Association has slammed the report.

President Genia McCaffery said yesterday it was "totally misleading" and many of the ratings were interim and yet to reflect unpublished information that may be key to assessing a council's financial sustainability.

Editorial

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