Surprise surpluses a double-edged sword

When the old Dubbo City Council and Wellington Shire Council were forced to merge, residents were told it was because Wellington couldn’t stand alone.

The revelation that both former councils finished the 2015/16 financial year with larger than expected surpluses would appear to put that claim in doubt, at least in the short term.

At Monday’s meeting of the Dubbo Regional Council Finance and Policy Committee the quarterly review of the operation plan showed the healthy bank balance of both former councils.

Wellington looked particularly good, finishing with a surplus of $1.5 million, with water charges providing a payday of more than $1 million dollars.

Dubbo Council also finished with a bigger surplus, although the final figure wasn’t clear. A year earlier the council showed its strong fiscal stance with a $43 million net profit.

However Wellington’s profits may not be as impressive as they look at first glance.

Almost $8 million of capital works were delayed to 2016-17, and if they had been carried out, it would have almost certainly driven the former council heavily into the red.

And while the figures might look good, the reasons behind them may not be so impressive for residents.

One of the biggest income streams for both councils were the water rates. In Dubbo, more than $600,000 was raked in because of higher than expected usage, added with the $1 million for Wellington.

In the past water rates have been jacked up when people have used less water than expected to ensure the books have balanced. It is unlikely council will reduce the fees because they are making too much money.

Another area that proved profitable in Dubbo was the saleyards, which brought in an additional $350,000 because of high numbers of sheep and cattle sold because of the difficult season.

Wellington brought in an unexpected $440,000 from waste and $70,000 from sewerage.

The challenge ahead for the fledgling Dubbo Regional Council will be to continue balancing the books while ensuring all the work that needs to be done is carried out.

Cutting back or delaying work is an easy way to save money, but it will come back to bite you sooner or later. It can’t go on forever.

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