BALLARAT City Council looks set to delay the adoption of its 2012/13 budget after it discovered its government superannuation fund bill could be as high as $12 million.
The council had budgeted for only $4 million and said the Defined Benefits Scheme blowout could have a significant impact on its finances.
All Victorian councils are called on to make top up contributions to the fund which, unlike other government superannuation schemes, must be fully funded at all times.
In the past, Ballarat has put in $7.4 million in 1996, $3.4 million in 2003 and only $1.9 million in 2010.
During the past two weeks, the local government liability has blown out to between $500 million and $750 million, making Ballarat’s share $12 million rather than the $4 million expected.
Ballarat City Council chief executive officer Anthony Schinck said the council could need to borrow or significantly vary its budget to cover the bill.
"We have to pay much more than anticipated," Mr Schinck said.
"We are clearly seeking to add details about the full extent of the bill, the timing and arrangements for payment so we can appropriately factor those numbers into our long-term financial strategy."
Mr Schinck said they would get extra information from the Municipal Association of Victoria, Vision Super which administers the fund and the Auditor-General.
"This could have a very real impact on what we are able to do next year and in subsequent years so it would be irresponsible to adopt the budget next week."
He said it could impact on funds for infrastructure, capital works and services.
"We’re not panicking, we’re just being prudent," Mr Schinck said.
"We want to inform the community, particularly with an election in October."
In a report to the council, executive manager finance Glenn Kallio said $12 million is equivalent to council’s full infrastructure capital budget for an entire year.
"It is clear that the financial impacts will be significant, not only for the Ballarat City Council but for local government in general," Mr Kallio said.
His report recommends the council delay adopting the budget for two weeks, as it has until the end of August to do so.