Everyone seems to have an opinion on how councils should use their funds - and whether they are spent wisely. You don't have to go far or wait long to hear someone offer their insights into what should be done with parking, trees, roads or any number of other things municipal authorities are responsible for.
It is no different for the City of Ballarat. But just as in many other places, a curious silence descends when people are invited to contribute to the real discussion of how to disperse funds. Two years ago, just one verbal submission was made to council about the budget.
There were more written ones, but these disproportionately tend to be from special interest and campaign groups - the Ballarat Renewable Energy and Zero Emissions is one example of a campaign group that usually makes sure its voice is in the mix.
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Such organisations aside, the number of people who engage is a tiny fraction of the total likely to be directly affected by the decisions made.
The key moment for residents to speak up is when a new council is formed and a new plan for their term is worked through. That process last happened in 2016, and will happen again this year once the council elections for the next term take place and councillors in that group work out what direction they want to take.
However, the annual budget is still important - arguably more so this year as the city faces the most difficult economic climate in decades.
Just as the federal and state governments are taking unprecedented decisions with their budgets and borrowing, so local councils are wrestling with similar questions - albeit on a much more localised scale. Austerity or fiscal stimulus? Service as usual, or cuts? Belt tightening or special projects to kickstart the local economy? Each council will be different.
We chose to stick to our normal timelines in order to present a financial blueprint that will give the community confidence we have got that balance rightIntroduction, City of Ballarat draft budget
All 79 Victorian municipalities were given the option by the state government to defer final budgets two months until the end of August. However the City of Ballarat, along with many other councils, has said it will not do that.
Feedback is open until Monday morning. Will that be the last public involvement before councillors debate the budget later this month? With an interim CEO imminent, it is perhaps still an open question. Any new incumbent may want a hand in a process that started before their appointment but will have a ripple effect during their time in office.
There have also been a number of obvious distractions since the draft report was first made public on May 11 - not least the small matter of a major Ombudsman's report, the subsequent resignation of senior director Terry Demeo and the sacking of CEO Justine Linley.
As it stands, however, June 8 remains the deadline. If you still wish to air your views, here is a snapshot of what we know so far about the 106-page document outlining how your money will be spent. There is no intention to judge whether the spending plans are well directed or not - simply an attempt to explain what the budget is trying to do.
Further draft budget:
- City of Ballarat draft budget 2020/21: Residential rates to go up
- Council to cut agency staff
- Ballarat City Council's 2020-21 draft budget amid coronavirus (COVID-19) pandemic
- City of Ballarat budget 2020-21: Council proposes borrowing $17m for post-coronavirus budget
- Ballarat council draft budget 2020/21: Figures are not the full story
Several observers have lamented a lack of detail in the reporting and the absence of explanatory notes to show how the budget has been presented. The Courier has posed a series of questions to the City of Ballarat about the figures, the responses to which may partially help to shed some light.
On paper, the amount of money lined up for works in the next financial year - as set out on page 42 of the budget - looks like a devastating drop for the City of Ballarat, with works set to almost halve from $97 million in 2019/20 to $49.8 million. However, the City of Ballarat has said these figures are not comparable as the carryover funds likely to move into the 2020/21 financial year are not included.
Considering the margin of error in calculating these carryovers, it is not considered appropriate to do soCity of Ballarat
In other words, the report gives no indication on how much of this year's budget will not be spent. The Courier has checked the draft reports for the cities of Greater Geelong and Greater Bendigo, which both give the carryover amount.
These may change but they at least give the general public a chance to compare what has happened the previous year with the 12 months ahead. The Department of Environment, Land, Water and Planning, which oversees local governments, has said it believes councils should include those carryover figures.
While finance officers at the City of Ballarat said they follow the Local Government Victoria model budget template, they demur on this point, saying: "Considering the margin of error in calculating these carryovers, it is not considered appropriate to do so."
What of the details on specific capital works projects? One difference is that $6 million for Bakery Hill works will be deferred until 2021/22. The City of Ballarat has stressed apart from that this budget is effectively undertaking the same service levels and works was planned before the COVID-19 crisis kicked in.
And other works? The draft budget does not include a huge amount of detail. We requested further more information on a few big ticket items previously budgeted for but not yet finished and unlisted in this draft budget.
A council spokesperson supplied the following extra information on a few high profile or high budget projects:
Civic Hall Stage 2 ($2m in the 2019/20 budget). Council says: "Project is being delivered currently. The level of funding to be carried over will be dependent on factors outside our control in the project's delivery. It is expected that money will be carried over."
Town Hall ballroom ($1m in 2019/20 budget). Council says "Project has commenced. Initial works involve essential services that are required to be upgraded. The level of funding to be carried over will be dependent on factors outside our control in the delivery of the project. It is expected that money will be carried over.
All Waste Interchange ($5m): Council says, "Future of project has not been determined at this stage. Carryover of funds will be determined on Council's decision early next financial year."
Her Majesty's Theatre works ($10m allocated by state government in 2019). Council says: "Works are progressing. Level of works to be completed are dependent on future grants therefore level of carryover is not known at this stage."
Miner's Rest land purchase ($1m). Council says "Expected funding still to be committed."
Charlesworth St Retarding Basin($1.5 m allocated in 2018/19). Council says: "This is a project funded by the Victorian Government, final design yet to be approved and full funding not received hence the project has not progressed."
A two per cent spending rise?
Writ large early in the draft budget is a promise of "2 per cent increase in core capital expenditure" - but this is not explained in any further detail in the document.
In response to queries, a council spokesperson explained core capital expenditure as "the amount spent annually on core services such as roads, footpaths, drains, facilities maintenance etc. This is commonly referred to as funding to deal with Council's 'infrastructure gap'."
When queried on the absence of detail, the City of Ballarat said funding for the Core Capital Program this financial year was $49.254 million excluding $10 million raised for recreation projects (the reason for the exclusion was not stated).
For 2020/21, the core capital expenditure would go up two per cent to $52.092 million. "Australian Accounting Standards does not allow for this figure to be represented as a numerical figure in the budget," it added.
Borrowings and savings
There is $17m of extra borrowing outlined in this draft budget. The council's director of business services Glenn Kallio has said on several occasions that the borrowings would not be raised if they are not required - but that they legally needed to be signalled in the budget. The council remains a long way below its borrowing limit.
There are a few - although not many - indications of where savings may be made. The wage bill on agency staff, for example is set to be reduced significantly, for example.
There may be a rate freeze, but don't expect your rates to be the same. The Courier has previously explained that residential rates will, on average, go up slightly for the next financial year due to the now annual revaluation that now takes place for property values.
The average bill will stand at $1,439, up $14. There is more relief in sight for commercial ratepayers, who are more likely to see an average drop of 3.8 per cent in the amount of rates that need to be paid.
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Note that the City of Ballarat is by far in the minority of councils to freeze rates. The City of Melbourne is one other to follow suit, but most municipalities are planning to raise rates (the cap this year has been set at two per cent). The decision to impose a rate freeze will cost the Ballarat City Council around $2.5 million in reduced revenue in the next financial year if the budget remains as it is.
The City of Ballarat has emphasised this budget is largely unchanged from the plans pre COVID-10, apart from the extra borrowing for reduced rates revenue and the deferral of Bakery Hill funds. This lack of change has been queried in some quarters: for example the inclusion of the same amount of funding ($6.8 million) for tourism, festivals and events has surprised some, given the restrictions and uncertainty around holding big gatherings.
The approach is in stark contrast to that of the City of Greater Geelong, which has announced the biggest capital works program in its history will be carried out over the next two years. While the municipality is more than double the size of Ballarat, its borrowings are projected to be at $66.9m, close to four times the amount signalled in the Ballarat budget. It also flagged $156.6m of new capital works projects flagged.
Meanwhile, the City of Greater Bendigo, a very similar size to Ballarat, looks to be adopting a more conservative approach with a modest increase in borrowing (to $3 million) and fewer capital works projects ($43.5 million) than both its regional counterparts. However, its mayor and CEO make the point that this could change if hoped for stimulus packages from both state and federal government come through.
- Read the full budget online at www.ballarat.vic.gov.au/city/about-us/budget. Submissions close this Monday (June 8) at 9am.
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