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Council finances questioned after budget release

FINANCIAL management at Gladstone Regional Council is under fire after the budget released last week cast doubt on its strategy for managing debt and spending.

But the council has hit back, claiming its financial management approach is second to none.

New Auckland resident Andrew Hopkinson said big projects like the Philip St redevelopment were costing ratepayers at a time when the council needed to knuckle down and focus on repaying its $170 million debt.

"Is it wise to continue pushing with the Philip St precinct even after the government funding applications were rejected?" he asked.

"Is this actually what the community wants?

"The state of the Gladstone economy is a mess.

"Gladstone is coming to the end of such a prosperous time, with an enormous debt."

Mr Hopkinson, a mechanical engineer by trade, said the council's current debt management strategy was irresponsible.

He said the council's debt management policy would lead ratepayers into inevitable increases in repayments over the years.

"The current situation is unsustainable and will drive people away from Gladstone increasing the burden on those that remain.

"The debt must be paid back. Council waste must be cut and more responsible reflective decisions must be made."

But the council said its long-term financial plan was reviewed independently by qualified economists.

GRC chief financial officer Mark Holmes admitted the council's credit rating had been downgraded from "sound" to "moderate", but said the new rating indicated council had "adequate capacity to meet its short, medium and long-term goals".

"The council's ability to service debt has been reviewed... externally by Queensland Treasury Corporation, which concluded the council's debt levels are sustainable through a number of commercial financial indicators," he said.

Mr Holmes said the council's assets offset its debts, which is equivalent to 7.96% of the value of its assets.

"This equates to debt of $7960 on a $100,000 mortgage," he said.

COUNCIL DEBT

Outstanding borrowings

  • $170 million

Repayments this year

  • $19 million

Council asset base

  • $2.13 billion

Planned future borrowings

  • 2014-2015: nil
  • 2015-2016: $14.1 million
  • 2016-2023: $46.6 million

Topics:  finances gladstone regional council queensland treasury corporation



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