By DANE LILLINGSTONE
In a report presented at the last council’s general meeting, the true amount of Warwick and Stanthorpe’s debt before amalgamation was revealed.
Warwick Shire Council’s debt was $11.2 million and Stanthorpe Shire Council’s was $2.8 million, combining for a total of $14 million at the time of amalgamation. That number has now blown out to $29.9 million as of 30 June 2015.
Warwick’s Aquatic Centre contributed the largest single amount of debt at amalgamation with $2.4 million while the Stanthorpe TAFE set them back $1.1 million.
Council’s long-term financial plan was also presented at the meeting. According to the Southern Downs Regional Council’s budget breakdown, the forecast was completed, assuming “new borrowings are not undertaken and charges for utilities reflect full cost recovery” and if “council maintains a consistent ratings increase of 4 per cent per annum.”
It was calculated with repayments being made over the next 10 years and with no further loans intended. Under the plan, debt would be reduced by around $2 million a year with a forecast of a $10.2 million debt in 2025.
Southern Downs Regional Council CEO David Keenan said a number of factors went into the forecast.
“The report itself is based on 4 per cent rates, based on dropping the number of staff by about another 20, based on all these other factors coming into line. That sees the debt being paid off over that period of time,” he said.
He also mentioned that any additional borrowing would no longer be the council’s choice.
“We’re not allowed to borrow. As part of the budget, we’re on a watch list from QTC (Queensland Treasury Corporation). Yes, it’d be great to be borrowing at the moment with interest rates so low. Do we have the capacity to borrow at the moment? No,” he said.
The variables to this prediction are higher-than-expected population levels and more businesses opening in Warwick and Stanthorpe which the council believe would reduce debt quicker. It also does not take into account any unforeseen circumstances such as natural disasters or emergencies.
The council currently has nine Capital Assistance Loans to be repaid by various sporting and recreation groups to the tune of $456,000 as well as acting as a guarantor for a $330,000 loan in the name of the Warwick Redbacks AFL Club.
Residents of the Southern Downs can expect to see the increased rate rises in their bills starting this month.
