News

Take $12m cash slog

Vote to delay capital investment, seek $5m salary savings over Covid

UP for a $12 million loss in revenue in the past three months alone, Cumberland Councillors were faced with some hard choices at last week’s meeting.
Looking at a rapidly shrinking reserve of unrestricted cash, the majority of councillors voted to delay $15m in capital investment in 20/21 and seek one-off ‘salary savings’ of $5m, although the details were not outlined.
It was one of three options presented to councillors in a report from director, finance and governance, Richard Sheridan, seeking “to address the loss in net funds due to Covid-19”.
The council’s six Labor councillors favoured a second option to free up cash by borrowing $20m through a low-interest loan from T-Corp, the State Government’s central financing agency, in order to complete projects already committed to in the next 12 months.
While recommended in the report, it was noted “the loan funding is a good option provided that council reviews the structural issues relating to the cost of operations”.
Mr Sheridan also noted that as a stand-alone option, it did “not achieve financial sustainability.”
“As a tool within a package of financial reforms, it can be successful if council addresses the cost of operations,” he said in the report.
The third option presented to councillors, was to do nothing and accept that unrestricted cash would be $16m in the red by June next year, something Mr Sheridan described as “not a financially responsible option”.