PS: The World According To Ho – https://www.crikey.com.au/2016/06/24/councillor-in-same-sex-marriage-controversy/

We are not accountants, but we do regard ourselves as reasonably intelligent people who should be able to make sense of most things in a budget. Not in Glen Eira it would seem! Readers will remember that the restructuring of the GESAC loan (and the payment of a $4.9 million penalty) has forced Council back to the drawing board and the requirement to publish a new Strategic Resource Statement and Budget. It is this latest version of the accounts that raises a multitude of questions.  Are we in fact dealing with ‘creative accounting’? If not, then every single item should be beyond doubt and self-evident. They are not! There simply is no correlation between the figures presented on May 3rd and the figures that now appear in the new budget. Why not? Have any councillors bothered to ask any decent questions? And why aren’t the changes highlighted and fully explained to residents?

Here are some of our concerns:

1COMMENT

Thus in May, just 6 or 7 weeks ago, residents were lead to believe that all that was necessary for the completion of the Booran Road Reservoir was the expenditure of another $903K – as further evidenced by the screen dump below, where no further expenditure is forecast.. So now we suddenly learn that another $3 million plus is to go into this project? Why? Where’s the money coming from? And what is the total cost of this originally mooted $5m redevelopment?

srp

GESAC

2y

BUDGET ESTIMATES

One of the most bewildering announcements from the two budgets are the figures for the income derived from ‘general rates’. Both budgets claim that the numbers were compiled from the ‘financial statements as at the end of January 2016’. Thus they should be identical – especially since they are ‘forecasts for 2015/16’ and not for 2016/17. Yet the discrepancy is staggering – a $5 million difference for figures that are supposedly based on the identical financial statements. In short, ‘forecasts’ for the past year should not change – but in Glen Eira they do!

june rates

Finally, here are some other comparisons from the May and the June documents. The onus is firmly on this council to explain these ‘discrepancies’ in plain English and to account for every single dollar that is to be spent. We also remind readers that the new ‘negotiated’ interest rate for GESAC has not been revealed when the previous interest rate was NOT deemed top secret! Why the difference? And why aren’t residents privy to what is happening to their hard earned cash? We also note that the claim that GESAC is paying for itself is no longer included!

May 3rdThe expected operating result for the 2016-2017 year is a surplus of $16.61m which is a $124k increase from the 2015-2016 annual forecast. (The forecast operating result for the 2015-2016 year is a surplus of $16.48m).

June 28thThe expected operating result for the 2016-2017 year is a surplus of $17.22m which is an increase of $5.74m from the 2015-2016 annual forecast. The forecast operating result for the 2015-2016 year is a surplus of $11.47m. Included in the 2015-2016 forecast is the economic cost of $4.93m associated with Council restructuring its loan facility.

May 3rdTotal cash and investments are expected to increase by $6.23m during the year to $45.24m as at 30 June 2017. This is due to a higher than anticipated closing cash balance as at 30 June 2016. (Cash and investments are forecast to be $39.02m as at 30 June 2016).

June 28thTotal cash and investments are expected to increase by $1.72m during the year to $45.58m as at 30 June 2017. This is due to a higher than anticipated closing cash balance as at 30 June 2016. (Cash and investments are forecast to be $43.86m as at 30 June 2016).

3rd May – Borrowing repayments of principal and interest costs of $2.88m will be made during the 2016-2017 financial year. Borrowings outstanding as at 30 June 2017 are projected to be $18.71m. The repayment of all borrowings is fully funded by GESAC.

28th June – On 17 May 2016, Council approved to restructure the existing loan facilities with a revised term of 7 years and a fixed interest rate. Loan repayments of approximately $4m per annum have been included in the SRP. Borrowings outstanding as at 30 June 2017 are projected to be $21.46m.

May 3rdInterest-bearing loans and borrowings are borrowings of Council. Council is budgeting to repay loan principal payments of $1.31m over the year.

June 28thInterest-bearing loans and borrowings are borrowings of Council. Council is budgeting to repay loan principal payments of $3.24m over the 2016-2017 year.

If any readers can shed light on the above comparisons, we welcome their thoughts!

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