Back in the black, almost

SDRC's 2020-21 operating surplus has increased from an estimated $72,000 to $277,000 since the last review in January.

By Jess Baker

Southern Downs Regional Council’s estimated operating surplus for 2020-21 has increased by 282 percent since January, a recent fiscal update has revealed.

The council’s third quarter budget review was tabled in last week’s ordinary meeting, noting SDRC’s previously adopted surplus of $72,000 had grown to a surplus of $277,000.

The review also identified an increase in operating revenue of $4.7 million and an increase in expenditure of $4.5 million.

A report tabled in the meeting explained that the increase in revenue was “largely due to the timing and recognition of grant revenue” and that the council’s net result is $3.4 million less following the third quarter review.

SDRC’s cash at bank and investments as at 31 March 2021 were described in the report as being in “a position of strength” at $67.2 million.

A SDRC finance officer warned councillors at last week’s meeting that while the organisation is now seeing an operating surplus, following a predicted $727,000 operating deficit in the first quarter, there remains an underlying deficit of $2 million in the 2020-21 budget.

The officer said the biggest contributors to this deficit are SDRC’s depreciating assets, costing $800,000, and recovery works associated with this year’s March flood event, costing $478,000.

The third quarter budget review also identified a $4.7 million decrease in SDRC’s capital expenditure, which was mostly the result of a $3.4 million reduction in Queensland Reconstruction Authority funding for February 2020 flood recovery works.

“The work required as a result of the February 2020 event has ceased, due to a subsequent rain event in March 2021,” read the SDRC report.

Total budgeted capital expenditure was identified as being $38.8 million as a result of the third quarter review, with $27 million spent as at 31 March 2021.

A SDRC finance officer said a decrease in water sales and in interest lost SDRC income, but the council managed to save $362,000 in salaries for positions that were budgeted for but were not filled “for one reason or another”.

“There was additional flood money approved and an extra $120,000 in fees and charges related to increased building activity,” said the officer.

The recent review of SDRC’s 2020-21 budget comes as the 2021-22 draft budget is finalised, with public consultation on the draft 2021-22 budget set to commence “mid to late May”.