Ipswich City Council mayor Teresa Harding, CEO David Farmer and chief financial officer Jeffrey Keech.
Ipswich City Council mayor Teresa Harding, CEO David Farmer and chief financial officer Jeffrey Keech.

Council debt rises to $344m: Where money is being spent

IPSWICH City Council's debt levels have risen to $344.2 million, with borrowings rising by $30 million in the last financial year to fund its redevelopment of the CBD.

Revenue rose by six per cent to $455.9 million with most of that coming through rates and utility charges of $202.4 million.

This was boosted by a "significant increase" in grants and contributions revenue of $75.8 million on the year before to $176.8 million.

This was down to contributions of physical assets, including the Springfield Sporting Complex of $30 million and a "number of infrastructure assets donated" in the wider Springfield area, according to the council's 2019-20 annual report.

"When comparing to the comparative year, capital revenue decreased by $39.5 million due to

a $40.5 million reversal of a previous revaluation decrease of infrastructure assets," the report notes.

"Other revenue decreased by $7.2 million to $38.6 million and fees and charges decreased by $1.7 million to $28.9 million.

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"In the comparative year (2018-19) other revenue included approximately $7 million of dividends received from council's controlled entities that were paid to council as part of the winding up of these entities.

"The reduction of fees and charges was in town planning and development charges ($1 million decrease) and health regulation and animal control fees."

The council's expenditure was $300.1 million for the 2019-20 financial year, a 5.8 per cent jump on the year before, with $184.7 spent on capital investments.

"Capital expenses increased by $6.9 million mainly due to valuation decreases of council's investment properties," the report notes.

"Council's CBD retail assets transferred from Ipswich City Properties Pty Ltd in 2019, are required to be revalued each year to reflect current market values.

"The revaluation this year resulted in a decrease of $3.2 million due to the current economic environment."

Employee expenses rose by $4.7 million on the year before to $99.7 million, which the council said was as a result of a 2.5 per cent wage increase, more full-time staff and costs to implement a "workplace restructure."

The cost of materials and services increased by $1.4 million to $104.2 million, the cost of depreciation and amortisation for the year was $73 million, finance costs were $13 million and capital expenses were $9.5 million.

The report noted legal costs increased by about $875,000 in regards to matters in the Planning and Environment Court.

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As of June 30, council held $3.3 billion in assets, which is $258.5 million more than the year before.

"Property, plant and equipment increased by $281.3 million to $2.7 billion mainly due to asset

additions of $97.5 million, donated assets of $135.4 million, an increase in capital work in progress related to the Nicholas Street redevelopment project of $84.9 million and an increase in value of building and other structure assets of $55.8 million," the report notes.

"This was offset by depreciation expense of $65.9 million.

"Assets held for sale and investment properties increased by $17.7 million mainly due to the intended sale of land and buildings to West Moreton Hospital and Health Service which was reclassified from property, plant and equipment.

"Other assets increased by $6.1 million to $10 million mainly due to the recognition of leased assets in accordance with the adoption of new accounting standards."

There was a decrease in cash by $27.7 million to $153 million because of "reduced cash from

operations" and increased capital expenditure on property, plant and equipment.

"Investments of $357.3 million includes participation rights of $310.3 million in Queensland Urban Utilities, and term deposit investments which decreased by $15 million to $47 million," the report notes.

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By the end of the last financial year, the council had $421.6 million in liabilities which is an increase of $42.2 million.

Payables increased by $16.1 million to $40.4 million, which was mainly due to accrued payables relating to the Nicholas Street Precinct redevelopment.

The council stated other liabilities decreased by $5.5 million to $12.8 million "mainly due to the extinguishment of the waste levy refund received in advance in 2019" of $7.4 million.

"This was offset by recognition of lease liabilities of $4.7 million in accordance with the adoption of the new accounting standards," the report states.

Read more stories by Lachlan McIvor here.