Central Highlands Regional Council’s debt remains at a manageable level as it continues to fund long-term infrastructure assets.
Councillors were informed at last week’s council meeting that, as at June 2015, the council had $68.6 million in loan borrowings; a decrease of $2.2 million to the end of December 2015 to $66.4 million.
CEO Scott Mason explained that the loan borrowings may have increased from $59.6 million in 2012, but in comparison, during the same period, the value of council’s assets increased from $1.2 billion to $1.5 billion.
‘Before the end of this financial year we will borrow another $3 million and in the next three years we plan to increase the borrowings by another $23.5 million.
‘We borrow money to fund long-term infrastructure requirements, such as the proposed upgrade of the Black Gully Sewerage Treatment Plant ($18 million), and a new landfill for waste management ($2.5 million).
‘Even though the council has money in the bank, which is at present $125 million, borrowing for large infrastructure projects is considered sound financial management practice because it leaves funds readily available for unforeseen circumstances and enables projects to be paid off over more than one generation—something commonly referred to as “intergenerational equity”.
‘A good example is something like a sewerage treatment plant that has a life of about 50 years. Why should the current ratepayers pay for something that the next generation will benefit from in the longer term?
‘The Queensland Department of Infrastructure, Local Government and Planning has sustainability guidelines for financial management and this council falls well within its parameters.
‘I’m certainly confident that this council has the capacity to effectively manage its current loan borrowings and those into the future.’