Blame post-merger spending on budget deficit

LOWER than expected income and higher costs have hit Cumberland Council’s bottom line.

A report on the second quarter budget position, has forecast a recurring budget deficit of nearly $600,000 for this financial year.
Director, finance and governance, Richard Sheridan said last week that as a result of the budget position, the council’s executive team had effectively put a “pause on costs”.
Laying the blame partially on the impact of reduced interest rates, he also noted that a $400,000 bump in user fees and additional grants of $400,000 in the second quarter, had helped the overall position to some extent.
However Mr Sheridan also highlighted higher than expected depreciation fees of $600,000, as well as an extra $400,000 in costs related to IT software licensing.
Although the council’s capital projects were all fully funded, he said they now had “negative unrestricted cash”, but added that staff were working on ways forward.
“We’ve spent all our available money,” he said.
“We will come back to the council soon on how we will deal with that challenge.”
While thanking the council’s executive team for their work over the past 12 months, Councillor Ned Attie accused the administrator and staff during the post-merger period of “squandering” money and urged councillors to “think clearly” and not focus on their own interests or things “close to home”, going forward.
“I’m sure we can turn this around and still provide service (to the community),” he said.
Both former Cumberland administrator Viv May, who handed over to the elected council in September 2017, and former general manager Malcolm Ryan who retired in November 2017, declined to comment when approached by the Review.