GreenARC - Budget Blues

Budget Blues at Armidale Regional Council (ARC)

In June 2018, ARC adopted a Delivery Program for 2018-21 (DP) with several sustainability initiatives for waterways (E1.1), air (E1.2), biodiversity (E1.4), climate change (E2.1), waste and recycling (E2.2), renewable energy (E2.3) and footpaths and cycleways (E4.4) - see images on left and below.

The Adopted Delivery Program is supposed to guide what council does every year and form the basis of the budget, and the Operational Plan, in each financial year.

Sadly, however, ARC's 2019-20 Operational Plan doesn't mention the important sustainability aims set out in the adopted DP, except biodiversity, which is mentioned only in terms of implementing Dumaresq Creek Masterplan targets.

Sustainability sacrificed for 'surplus'?

Many councillors seem to think budget cuts are necessary because they believe ARC needs a surplus of (recurrent income) over (recurrent expenditure & depreciation).

This definition of 'surplus' is specified by commercial accounting procures, but was questioned by a Certified Government Auditing Professional who provided training to four ARC Councillors in May 2019. Depreciation includes classified roads which council doesn’t pay for maintenance or replacement.

Council’s assets are generally in good shape. Only 5% of roads, 1% of the stormwater and 3% of the water network are classed as below average. If grant funding cannot be obtained for upgrading or replacing assets in the coming decades, ARC might need to save money for this purpose. However, this is not a pressing problem; cutting vital funds needed for a sustainable future simply to report a 'surplus' seems like a much greater threat to our future.

Amalgamating councils requires considerable money, effort and time. In NSW, 42% of recently-amalgamated councils did not have a 'surplus' in the 2017-18 financial year (FY). By contrast, in the last full FY before amalgamation (to June 2015), Armidale Dumaresq Council's 'surplus' was $3.4 million and Guyra Shire's $71,000. Post-amalgamation, ARC is embarking on a Transformation Program to become more efficient so that it can put aside money to replace assets over the coming decades and report a 'surplus'.

Council's CEO also wants to hold substantial amounts of 'unrestricted' cash as a buffer against financial risk and unexpected events such as natural disasters. Such costs are often covered by state and federal governments, e.g. the NSW Government is paying to truck water to Guyra.

ARC already meets the NSW Government's requirement for unrestricted cash. As efficiency improves with the Transformation Program, surplus cash should also increase over time. It is therefore seems illogical to deprive the community of important initiatives agreed to in council's adopted Delivery Program simply to save cash for an emergency, the costs of which are usually covered by state or federal governments, and which will probably never happen.

Neglecting biodiversity and global warming create unnecessary risks for our region. That's why residents are calling on ARC to declare a climate emergency.

Last winter, Armidale had 31 exceedances of Australian Air Quality Standards at the NSW government monitoring station and 63 exceedances in one residential area. Failure to meet National Air Quality Standards is also likely to adversely affect the economic development of our region. As current and prospective residents become aware of the impact of air pollution on their family's health, including the impact on children's bodies and brains, and senior residents understand the increased risk of heart disease, strokes, cancers, lung diseases or dementia, they might choose to live or send their children to school elsewhere.

Have your say on council's budget and failure to include agreed sustainability targets in the Operational Plan by June 17 - emailing council@armidale.nsw.gov.au or visit https://yoursay.armidale.nsw.gov.au/draft-delivery-program-and-supporting-strategic-plans

ARC's website quotes Mayor Simon Murray: “Council’s first budget surplus since the local government merger, without the assistance of amalgamation funding, is a significant achievement."