Council Budget and Debt Levels
Published on 12 June 2020
In preparing our most recent Annual Business Plan (ABP) summary, a level of information relating to council debt was not included. The omission was unintentional, however, to rectify this we are providing the relevant information here for our residents to review. You can also find more detailed information on page 12 of the draft 2019/20 Annual Business Plan.
What was the projected debt for 2019/2020 and what is that debt at present?
The 2019/20 Annual Business Plan projected debt levels at 30 June 2020 at $114.2m. At Budget Review 3, debt was forecast to be $95.5m as at 30 June 2020.
Why is debt lower than expected?
The reduction in year-end debt has resulted from a range of impacts including deferral of project expenditure, once-off savings across the organisation and an increase in some revenue items.
What is the City of Onkaparinga’s position on debt?
In the coming weeks and months, we will begin re-constructing the long term financial plan, from the bottom up, based on the objectives expressed by our current Elected Members, and taking into account community feedback received directly by Elected Members, or through Council’s current budget engagement processes. Both the council administration and our elected members agree that we must establish a debt ceiling as part of our Long Term Financial Plan. A revised policy will be established to support this, and strategies and initiatives will be introduced to minimise and reduce debt over the 10-year Long Term Financial Plan period. This will include ongoing review of our capital and renewal works programs, incorporating savings as they are identified, while allowing for known and anticipated pressures, and targeting an operating surplus over time.
What is the impact of operating under a debt ceiling?
Once an agreed debt ceiling has been established, we will modify our budgets, capital works plan and Long Term Financial Plan to ensure we operate within that agreed ceiling.
As a council we must deliver the projects and services required to meet the current and future needs of our rapidly growing city. If we are operating under a debt ceiling, some future projects may be delayed or only proceed if we receive external funding.
A debt ceiling may also impact asset service levels and the pace at which we can renew our assets across the city as part of our ongoing capital works program.
How can I have my say on the council budget and the level of debt?
You can have your say on the draft budget and Annual Business Plan until 24 June
We encourage all residents to review the budget and provide their feedback on the proposed projects, services and budget methodology, including the management of debt.