Latrobe Council Spends up Big Before Amalgamation

If you look at Latrobe Council’s latest budget – and if an amalgamation happens, it may be the last  – you can note the following:

• less than half a million in cash as at 1 July 2023
• 2024 Plan & Budget to leave nothing left in savings by 3 June 2024
• Latrobe Council stated $6,250,000 was to be paid off by 1 April 2024
• $6,250,000 loan to be refinanced, which will see approximately tenfold increase in interest repayments come 1 April.

Have the ratepayers been fooled?

The question must be asked of Latrobe Council:

why empty the safe and leave almost nothing left by 30 June 2024?

A little over three years ago Latrobe council had almost $10million in the bank, no borrowings and plenty of revenue growth coming through new developments.

Today Latrobe council has over $11 million in borrowings and a looming tenfold interest rate hike on April Fool’s Day 2024. Along with the forecast of only $677,000 left of savings and operating capital as at 30 June 2024.

That is over $20 million turnaround in just a little over three years and largely the reason why rates are 7.9% increased this year.

The council states they reviewed the Financial Management Strategy (FMS) but it’s not in the agenda. From the audited accounts in April it was significantly out with an almost $6 million deficit and over $ 6million in projects carried forward from last year and a slowing growth that is quite staggering to see. Is this council being financially responsible?

This raises the following questions of Latrobe Council at this coming Monday night’s Annual Plan and Budget general meeting:

Will the council have no variances in the coming year that will see them trading in the red?

Will all the capital projects be completed or even started if there is any unforeseen/foreseen budget issue?

Staff turnover is at its highest point ever and doesn’t seem to be slowing down. Any reasonable person would suggest that now is not the time to be flippant with spending and a tight rein on our budget would be the wisest thing to do right now.

Yet this council has put a very large capital plan – and this brings about a very big spend – ninto the budget and if last year is anything to go by there could be at least a twenty-five percent increase in costs and variances. We are living in a time of high inflation, and that applies to construction and materials as much as anything else.

This leaves a pointed question.

Is this the last Annual Plan and Budget by Latrobe Council before they are amalgamated?

This might be the reason why virtually nothing will be left in reserve at the end of June 2024. Looking through the paperwork I would have thought that leaving a lasting memory for Latrobe’s war hero Teddy Sheean should have been high on the list.

I guess the Hawley foreshore path is more important. I hope that is finished completely this year.

One graph really sticks out that is the asset sustainability ratio graph. It tanks this year and with no funds at the end of the year I wonder how they will ever turn that around. Furthermore there’s a comment under that graph: “It is expected that at some time in the future, the council’s asset renewal expenditure will exceed the benchmark to compensate for the current below benchmark expenditure.”

Wow. The council is 50% below average here in this key financial indicator. Latrobe Council will never exceed this benchmark; it will be a new council with a new name and a sad day in Latrobe Council’s history.

To quote Councillor Jacki Martin, ‘protecting the brand’ may have all been too late.

James Redgrave is a former military serviceperson and private investigator who takes an interest in local government matters in Tasmania.