Council cuts it super loses with $2.1m payment

NEW borrowings, budget allocations and cash reserves are expected to be used by Warrnambool City Council to fund a $4.8 million superannuation shortfall.

The councillors voted at last week’s meeting to fund part of its contribution to the shortfall with an immediate payment of $2.1 million from cash reserves, resulting in $65,000 saving for council as it avoided “a shortfall liability at July 1”.

Only Cr Peter Hulin voted against the recommendation, which specified paying $2.1 million immediately, with the remaining $2.7 million to be dealt with in the 2013-2014 budget process.

The council’s corporate strategies director Kevin Leddin said the super shortfall was an issue for all councils and something that had to be dealt with.

Cr Jacinta Ermacora said the payment was a necessary evil that would unfortunately stifle the council’s next budget.

“Warrnambool’s a growing city with growing requirements for infrastructure and community services, and that’s what makes this shortfall particularly challenging,” she said.

“It’s a disappointing reality.”

Cr Rob Askew said it was “one of things we’ve inherited and we have to pay it unfortunately”.

Cr Peter Sycopoulis noted Warrnambool City Council was not alone in the problem and asked that council officers “concentrate on getting greater savings” while paying off the shortfall.

Cr Hulin did not explain why he was voting against paying the immediate amount of $2.1 million to make a saving, nor did he offer an alternative.

Instead, he took the opportunity to blast his fellow councillors and officers, saying they were “not prepared to run this council like a business”.

“If business people were running council, we wouldn’t be in this situation,” Cr Hulin said.

He went on to say that “Flagstaff Hill is bleeding money, Fun4Kids (needed) a better way of doing the same festival ... (and) that we still haven’t got our money (from the) Allansford land debacle”.

He said the council “had known for long enough that this (shortfall) was going to happen — it was no surprise to anyone”.

Mayor Michael Neoh disagreed, saying the superannuation shortfall “caught everyone by surprise”.

“We’re at the mercy of shares and the stock exchange,” Cr Neoh said.

Tablet - Narrow
Tablet - Wide