As Wollongong City Council strives to get its long-term finances under control through a comprehensive review of services and rates, last year’s financial statements reveal it is losing money on almost 90 per cent of its services.
Of the 35 functions and activities listed in the council’s 2012-13 financial reports, only four – solid waste services, local government regulations, camping areas and caravan parks, and town planning – make money.
In contrast, beach patrols costs the council $5.3 million, libraries and community centres cost $11.9 million and swimming pools cost $5.5 million.
Despite making $2.2 million through fees and charges, public cemeteries cost the council $63,000 after expenses, and animal control costs $836,000 despite an income of $532,000.
Although these expenses are high, Lord Mayor Gordon Bradbery said on Friday that the council’s finances were ‘‘fairly healthy’’ in the short term.
He also pointed out that many council functions were not designed to make money.
‘‘Libraries, for example, are not a business – they are a resource for the betterment and wellbeing of our community,’’ he said.
‘‘These may be a cost, but at the same time the ratepayers are paying for these services and they have a lot of expectations about them.
‘‘In the financial review we’re going to ask the question ‘what patrolled beaches can we do without?’, and I don’t know whether we can do without any of them ... because beach safety is a big priority for me.’’
However Cr Bradbery also said Wollongong residents would need to think carefully about which services and functions they would be willing to pay more for or do without in the coming months.
The council began a financial sustainability review in August, which is designed to help it meet an infrastructure backlog on assets which would cost just over $4 billion to replace.
‘‘Our issue is that the assets we have are now coming to their use-by dates and over the next 10 years or so they will have to be renewed, plus there’s the expectation of the community that we will expand our assets,’’ Cr Bradbery said.
‘‘So while [the finances] look quite healthy now, we want to make sure it continues to be healthy as we replace these assets.’’
Last year’s financial figures show the council’s total income was $263.4 million, up from $238.5 million the previous year.
According to the council’s manager of finances, Brian Jenkins, this boost was due to an ‘‘unusually large’’ amount of grants and contributions, which came mainly from West Dapto developer contributions.
The council’s total expenditure was $238.2 million, leaving an operating surplus of $25.1 million after capital grants and developer contributions were factored in.
However, without the grants the council posted a deficit of $13.9 million – up slightly from the previous year’s figure of $13.6 million - which Mr Jenkins said showed why the council needed to rein in its finances.
‘‘This is consistent with our forecasting, which says we will run a deficit of about $15 million if we continue doing what we’re doing,’’ he said.
Other figures show the council collected $148 million from rates of which home owners paid more than double that of businesses.
Residential rates amounted to more than $80 million, while businesses paid $37 million in rates.
Staff cost proved the council’s biggest expense at $91 million, however employee costs decreased by about $2.5 million compared to the 2011-12 financial year.
Mr Jenkins said this decrease had come about because low interest rates had reduced the amount of long service leave entitlements and a change in legislation which led to a reduction in the cost of workers’ compensation provisions.
The 2012-13 financial statements will be tabled at Monday night’s council meeting.
Wollongong council income for 2011-12: $263.4million, including:
• Rates - $148 million
• Grants/contributions - $68 million
• Council tourist parks - $4.9 million
• Crematorium/cemeteries - $2.1 million
• Beaton Park and Lakeside Leisure Centre - $2.3 million
• Parking fines - $2.1 million
• Parking meters - $1.2 million
Wollongong council expenses for 2011-12: $238.2million, including:
• Staff costs - $91 million
• Capital works - $53.9 million
• Carbon tax - $2.1 million
• Contractors/consultants - $61.4 million
• Street lighting - $3.3 million
• Electricity - $2.4 million
• State government contributions/levies - $14.2 million
• Lord mayor-councillor wages - $429,000