THE financial position of Kempsey Shire Council improved significantly in 2014/15 compared to the previous year.
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At the November council meeting, councillors heard that council’s financial reports for the 2014/15 year had been audited and received.
Income increased by $18.066 million, principally due to the recognition of the transfer of the Macleay Valley Way from the Roads and Maritime Safety (RMS) to council in the amount of $18.044 million, and the total equity was increased by $7.472 million, principally as a consequence of the addition of the Macleay Valley Way.
The income statement measures council’s financial performance over the year and shows whether or not council has earned sufficient revenues to support its activities and whether or not it has created surpluses to fund additional or replacement of assets to service community needs.
The income statement shows where council’s money comes from (revenue) and how that revenue is consumed (expensed) in providing the ordinary activities and services of council.
The income statement reveals a nett operational surplus for the year of $13.331 million compared to a deficit of $20.853 million in the previous year.
Total income was $89.363 million with 33.23 per cent of this being generated from rates and annual charges. Operating expenses totalled $76.032 million comprising in part employee costs of $20.293 million and depreciation expenses of $31.247 million.
“Depreciation represents the consumption (use) of council’s assets. The need to provide matching funding to offset depreciation is paramount in ensuring that assets are maintained and renewed so that they continue to provide the level of service expected by the community,” the council agenda stated.
Council’s income statement reveals an operating deficit before capital grants and contributions of $11.668 million in the 2014/2015 year.
Council general manager David Rawlings told the Macleay Argus council’s bottom line was pushed into surplus thanks to a large capital grant, relating to the handover of the Macleay Valley Way.”
“Our income has been increasing, which it needs to, but what I am really happy about is that we have managed to keep our operating expenses down to below the previous year’s level,” Mr Rawlings said.
“We need to fix our financial loss and the only way to do that is through the combination of revenue and reducing our costs where we can. The budget cuts we have been making over the last few years are starting to have a significant impact on our bottom line. ”
Mr Rawlings said there were a range of areas where council had been able to bring costs down, including electricity, insurances, interest on loans, and by keeping a lid on those costs, council was able to put more into services and assets.
“This year has allowed us to put more money into fixing up roads and bridges,” Mr Rawlings said.
“We put $25million into the transport network and $39million all up into asset renewals.
“This is the first year in a long time the council has actually put more back into the assets than has been used up in the year. It is great to have gone forward instead of backwards with our assets.”