spreads (20).gif

McGinlay asks Eurobodalla : Paying too much for Water and Sewer ? Looks like it

Councillor reveals that Eurobodalla ratepayers are being overcharged for their water and sewer to the order of $6,887,000 over the last decade.

Above: Have Council been caught out overcharging on Water and Sewer to give themselves an annual guaranteed dividend for the General Fund rather than pull in their belts on spending? Council have charged its ratepayers $16,671,000 over the last ten years to then siphon off nearly $7m to prop up its ever growing overheads. While it is best industry practice to direct a surplus to help to fund future renewal requirements and reduce reliance on loan funding only half of the water and sewer revenue is needed. The rest is 'profit'. Eurobodalla Council, like all NSW council's are restricted in how much they can charge in their General Rates. This figure is based on a percentage of the Unimproved Land Value and is capped by the NSW Government. The money raised under the General rate is not enough to cover annual overheads so Council then seek additional State and Federal grants to make up the short fall to cover roads, rubbish and all the things Council does in general. Meanwhile Council also charges a separate fee for water and sewer. Each year there is an opportunity to pay Water and/or Sewer dividends to the General Fund providing demonstrated evidence of best-practice management of these businesses as well as their compliance with the Australian Governments National Competition Policy and National Water Initiative. In June 2018 the fairly innocent matter of dividends from the Water and Sewer fund offered up a very interesting revelation. Finally the community managed to find a councillor with the gumption to ask the Elephant in the Room question. "Do we put up the water and sewer every year as a way of topping up the General Fund above the allowable 1.5% increase to cover the costs of the ever increasing overheads like wages and the ever mounting infrastructure maintenance and renewal shortfalls?" It appears that the short answer is YES. Councillor McGinlay managed to have the Director of Finance admit that they budget for the "dividend" and that the "dividend" has been going on for a long time and that it is now factored into annual, four year and 10 year plans. The second installment has arrived to this revelation with the Director of Finance being asked some very straight forward questions by Councillor MCGinlay. Question 1. What has been the surplus generated each year for the past ten financial years from the Water and Sewer budgets? From the Graph below: The total surplus (being the profit from Water and Sewer fees MINUS the running costs and required maintenance for the year) = $16,671,000 2. (a) What has been the dividend transferred to the General Fund each year for the past ten financial years? (b) Has this been fully expended each year?

Above: Figures provided by Council to Clr McGinlay's question Total Water 'dividend' in 10 years $2,487,000 and total sewer $4,440,000 3. What has become of the remainder of the surplus from the Water and Sewer budgets from the past ten financial years (after dividends transferred to the General Fund)? Council Response The accumulated surpluses over the last 10 years of $8.0m and $11.4m for Water and Sewer funds are reflected in their current cash balances of $30.8m and $18.3m which are restricted funds. This also aligns with Council’s adopted Integrated Water Cycle Management Strategy. This cash will help to fund future renewal requirements and reduce reliance on loan funding

COMMENTS : Due to the risks associated with comments from unidentified contributors that expose The Beagle to possible legal actions under the NSW Defamation Act 2005 No 77 anonymous or Nom de Plume comments will not be available unless the author is known to the editor by way of a verified email address or by association.

Others who provide their REAL NAME (first name AND Surname) and a verifiable email address (it won't be published) are invited to comment below. (yes it is a pain but please comply - it would be a  shame to see your comment deleted)

Those contributors KNOWN to us and verified may continue to use their First Name or Nom de plume for ease. The primary need for all of this is due to traceability should a legal action arise.

If you need anonymity email us via our normal or encrypted email accounts

Please note that if you are looking for a previous comment that is no longer visible please contact us.