Draft Annual Business Plan and Budget 2024/25 and Draft Long Term Financial Plan

Households across Alexandrina are tightening their belts and reviewing their budgets and Council is no different.

We invite you to review the Draft Annual Business Plan and Budget and the Long Term Financial Plan (refer Appendix C) and provide your feedback.

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Quick snapshot

• Funded New Operating Initiatives added $1.45m
• Unfunded New Operating Initiatives $866,926
• Depreciation increases up $5.3m
• Savings and efficiencies -$5.37m
• No new major projects
• Proposed average rate rise 8.3%
• Proposed budget deficit $4.7m
• Optional additional rate rise to fund delivery of the Township Greening Strategy and Action Plan 1.25%

Factors contributing the proposed rates increase:

Over the past two years, Council steered a full review of financial services, undertook financial reform and embarked on a savings and efficiencies program, which produced over $5.37 million worth of savings.

On the flipside the revaluation of our road and footpath assets revealed the magnitude of the increase in costs and high inflation with the value of those assets rising by $157 million, which means our annual depreciation costs increase by $5.3 million, which Council needs to set aside to replace assets.

The high inflation environment, coupled with the rise of external costs for materials and the recent re-evaluation of Council assets, all contribute to an average 8.3 per cent rate increase.

Following last year’s community consultation feedback on the Draft Annual Business Plan and Budget 2023/24, the Council lowered the proposed rate to less than inflation. We found savings to make ends meet while still delivering essential services and not introducing new major projects.

Council is very aware of the increased cost of living pressures on the community. However, Alexandrina Council is about 4.6 million short of the revenue out of our Long Term Financial Plan (LTFP) forecast we should have at the end of 2023/24 due to the impact of past decisions to lower rates less than the predicted LTFP values.

Read more about the significant influences and priorities for 2024/25 on page 30.

Long Term Financial Plan

To ensure financial sustainability the Long Term Financial Plan has been updated with the latest depreciation figures and updated modelled rate increases of CPI plus 3% for the years 2026 to 2029 to derive a surplus in year 5 of the plan, in reality a combination of cost control and rate increases above CPI will be needed to be utilised to achieve sustainability. By using these assumptions, the Long Term Financial Plan forecasts that within the 10-year timeframe, Council will repay the majority of its outstanding borrowings.

In order to lower the rates increase assumption over the next five years, the revision of the A2040 Strategic Plan, Asset Management Plan and Long Term Financial Plan performed later in 2024, to target:

• an overall reduction in operating expenses to be performed in conjunction with current service reviews.
• increases asset disposals.
• increases in revenue raising opportunities.

Working towards long-term sustainability

Council is committed towards financial reform. Here are the next steps:

• Revision of the A2040 Community Strategic Plan, Asset Management Plan and Long Term Financial Plan
• The Essential Services Commission of South Australia (ESCOSA) will be examining our operations.
• Our independent Audit and Risk committee suggested measured, incremental and a long-term approach to increasing Council revenue to meet rising costs
• Continue to look at savings and assessing the level of services we provide to the community
• Assess long-term impact on our community before making big decisions to cut service levels
• Continue to look at efficiencies and which expenses can be cut e.g., do we explore selling undeveloped Council land?

Council will always need to find the balance between what residents expect Council to deliver and what is appropriate and affordable for Council to provide with the revenue available.

It is now time for the community to have your say on the Draft Annual Business Plan and Budget 2024/25 and the Draft Long Term Financial Plan.

*Image by Duncan Grant (Pullen Island, Port Elliot)