At tonight's Extraordinary Council Meeting it was resolved to adopt a revised capital works program to be undertaken in 2022-2023 to maintain financial sustainability, set an achievable level of deliverability and to realign the expectations of both the Council and the community to a more sustainable level.
Council reviewed both the unspent capital funds proposed to be revoted/carried forward from the 2021/22 financial year and the existing capital budgets within the original approved 2022/23 Operational Plan. The combined total of the 2021/22 revotes and the original 2022/23 capital budget amounted to $166.44m.
Council's historical business-as-usual capital expenditure capacity is approximately $60m per annum, this is excluding any one-off, large-scale externally-managed capital projects. Therefore a capital works program of $166.44m is over $100m in excess of Council's baseline capacity. This is both financially burdensome - because of its related annual depreciation and maintenance costs - and operationally undeliverable in one financial year with the current resourcing levels.
Council resolved to defer $53.45m and remove $1.76m from its projected capital program, with a revised capital program of $111.23m.
The primary outcome of this process is three-fold:
- to set a more realistic capital program that can be delivered in one financial year;
- to more effectively stagger the impact of depreciation; and
- to realign the expectations of both the Council and the community to a more sustainable level.
"This reset is about being realistic and financially responsible and making sure we have the ability to resource the capital program," said Natalia Cowley, General Manager City of Coffs Harbour, who led the review which took account of ongoing grant obligations and other commitments.
"There has also been a cumulative impact from Council's success in receiving significantly higher than usual Federal and State grant funding from election promises and bushfire and pandemic stimulus programs, as well as constructing some large scale assets.
"So we have taken stock and are moving ahead with a different approach, which coupled with the global labour and supply chain issues, is the right path to take. We want to make sure we set realistic community expectations."
Some top-line items that will be deferred to the 2023-2024 financial year include:
- Sportz Central Upgrade $6.032m;
- Upgrade of Sawtell and Woolgoolga Pools $9.45m;
- S7.11 North Boambee Road raising and infrastructure works $7.8m;
- Brelsford Masterplan Works $4.0m;
- Water supply infrastructure capital works $3.25m; and
- Sewer treatment infrastructure capital works $6.74m.
Councillors agreed that the deferral of the Sportz Central Upgrade is conditional on the funding providers agreeing that the grant can be spent in the 2023-2024 financial year.
The resulting reduction to the 2022-2023 capital works program will also mean a reduction of projected operating costs such as depreciation, general operating and maintenance.
