Ballarat City Council revenue shortfall

Ballarat City Council faces a $259 million revenue loss over the next decade if rate capping remains at two per cent.

The funding black hole has had immediate impact on the 2017-18 budget with $2.1 million stripped from council’s coffers in the next financial year.

Draft budget papers released on Monday said council would have to review its operations to adjust for the effects of revenue shortfalls.

“This loss in revenue over the next 10 years provides council with many challenges,” it said.

“Not only to cover this loss of revenue but also to cater for the demands that will occur because of growth in the west of the municipality.”

A $6.08 million revenue shortfall is predicted for the 2018-19 financial year, with the loss growing bigger each year.

Council plans to increase borrowing to address the funding shortfall over the next 10 years.

This includes a plan to borrow $35 million over the next nine years to raise debt levels to a maximum of $83 million.

Council’s plan is for loans to be reduced to $4.6 million by the end of a 20-year strategy.

Chief executive Justine Linley said council was unlikely to apply for a rate cap variation as another way to increase revenue.

“Applying for a variation to the rate cap remains an option for council in future years, but for this coming year this will not occur,” she said.

“To be fair, seeking a variation is not in our current forward plan.

“Each year, council will look at the programs, services and funding requirements and make a determination.

“Council will also look at every lever it has, from significant service reviews and reforms, to reviewing user fees and charges.”

Areas that are not a local government responsibility, particularly those that have been given to Ballarat City from state and federal governments could also be handed back.

The municipality has averaged a 5.4 per cent annual rate rise each year since rate capping was removed in 1998. Revenue is drawn from a number of areas including;

  • $109 million in rates and charges
  • $3.6 million in fines and fees
  • $24 million in user fees
  • $23.4 million in operating grants
  • $2 million in capital grants
  • $8.817 million borrowings.

Council spends this $63.051 million on employee costs, $61.895 million on materials and services, $2.4 million on property, infrastructure, plant and equipment, $43 million on finance costs and $3.817 million loan repayments.

The draft budget is available for comment at council’s website.