ESCOSA Finds Council ‘mostly Sustainable’
The Essential Services Commission of South Australia (ESCOSA) has found City of Mount Gambier’s historical, current and projected financial performance to be ‘mostly sustainable’.
The report into Council’s financial position was issued as part of the third round of findings under the Local Government Advice Scheme established through the Local Government Act 1999. Under the scheme, ESCOSA is the advisory body providing advice to all 68 councils across the state in a four-year cycle.
The report highlights Council’s good financial management practices, including the development and review of strategic management plans in consultation with stakeholders and the community.
“We also received recognition for the development of separate Asset Management Plans for each asset group and the integration of data within the Long Term Financial Plan and budget. Council was also acknowledged for conducting community consultations and surveys to identify service level priorities,” CEO Sarah Philpott said.
ESCOSA outlined risks that could impact Council’s sustainability, including dependency on rate growth and the impact of operating expenses. The advice takes into account Council’s forecast average residential rate increases of 5.3 per cent over the next 10 years as outlined in the Long Term Financial Plan.
“Historically, residential rates have been lower than average in Mount Gambier compared to similar council areas, and our rates haven’t kept up with inflation. A rate increase responded to growth and depreciation pressures, resulting in rates above CPI this financial year.”
ESCOSA recommends that Council review depreciation assumptions and asset valuation data to ensure accurate reflection of asset consumption and fully fund asset renewal and replacement. The Commission also encourages Council to assess the development of new and upgraded assets, while considering and balancing rates affordability, future financial liabilities, and the prioritisation of asset renewal and replacement.
“We welcome the review and the recommendations to further refine the work that we are already doing to improve our financial position and practices. We are currently commencing a service review process, strategic property review, rating review, budgetary controls and scrutiny and considering areas for cost reduction to ensure financial sustainability is maintained, ultimately to try to reduce the impost on our ratepayers,” Ms Philpott said.
“Council’s work on assets, and on business improvement is about looking to increase our asset understanding, ensure appropriate investment and also seeking efficiencies, as we are very conscious of the pressures on our ratepayers.”
“Now we have the report, we will further consider what other strategies and actions we need to take to address the recommendations.”
ESCOSA acknowledged that Wulanda Recreation and Convention Centre is a valuable long term asset that will serve both current and future generations of ratepayers. The Commission recommends that Council consider longer-term debt repayment periods for the facility, reflecting its status as an intergenerational asset.
“Importantly, ESCOSA also recognised the work we’ve done to reduce operating expenses at the community facility since opening,” Ms Philpott said.
Council will discuss the ESCOSA report at a workshop on Tuesday 4 March 2025.
https://www.mountgambier.sa.gov.au/news/escosa-finds-council-mostly-sustainable