SHOALHAVEN City Council has turned around an expected $778,000 second quarter deficit in its general fund, balancing the budget for the 2012-13 financial year.
The water fund returned a $4.69 million surplus, while the sewer fund went $2.97 million into the black.
The good news was contained in the June Quarterly Budget Review, recommended for adoption on Tuesday night by council’s Policy and Resources Committee.
“The balanced budget has been brought about following a renewed focus on the reduction of operational expenditure,” said Shoalhaven Mayor Joanna Gash.
“Each of the groups has made a demonstrated effort in controlling costs and containing unbudgeted spending.”
Cr Gash said it was pleasing that despite a projected large deficit brought about by unbudgeted acquisitions made earlier in the year the budget had been balanced by the end of the reporting period.
However, some of the gloss was taken off the good news by an increase in the number of revotes – sums of money allocated for capital and operational works – that were not spent.
In the general fund, these had spiked to $15.8 million, up from $11.1 million in the 2011-12 financial year. In the water fund there were revotes worth $2.1 million, while the unspent money in the sewer fund amounted to $4.47 million.
Of the $15.8 million worth of revotes in the general fund, $12.2 million was related to capital expenditure and $3.3 million to operational expenditure, including $479,958 set aside for the local road repair program.
Cr Gash was clearly disappointed.
“I have made it clear to staff that if they can’t spend the money allocated we will have to look at getting contractors in to do the jobs,” she said.
“To be fair, though, a lot of the revotes were related to works like the Ulladulla Civic Centre and the Parma Creek bridge, which was decided on very late in the financial year.”
Among the major projects for which allocated money was not spent were the rebuilding of Bolong Road ($1.63 million), the Crossroads fire station near Vincentia ($981,610), the Ulladulla Civic Centre ($954,386), the Ison Park amenities and car park upgrade ($877,051).
Long-serving councillor Greg Watson, who two years ago was highly critical of the $21.1 million worth of revotes in the 2010-11 financial year, said while some revotes were unavoidable it was generally “poor accounting practice”.
“You can see funds allocated to projects that had not necessarily been tested against the council-community priority list.
“The Ulladulla vote for the gym extension, for example, was not considered as a high priority but was allocated additional funds.
“With capital expenditure there’s often a legitimate explanation in that for one reason or another, the projects haven’t got to the stage where council can undertake the work,” he said.
Hold-ups could be caused by design work not being complete or delays to the drawing up of tender specifications.
In a bid to address the issue council has set up a project team to investigate the reasons behind the number of revotes and find ways to avoid them recurring.