WAGGA City Council has posted an initial deficit of $13.6 million for the 2013/14 financial year, an $8.29 million increase on the previous term.
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The audited 2013/14 financial statements indicate council had $57 million in borrowings and the overall employee costs increased by 2.9 per cent.
Wagga City Council (WWCC) Director of Corporate Services Craig Richardson stressed while the deficit factored in operating grants, the figure excluded capital grants and contributions.
"The main item is the timing of payments by the Commonwealth of Financial Assistance Grants," Mr Richardson said.
"Council recognised income from these grants of $4.8 million in 2013/14 compared with $9.8 million in 2012/13.
"This is because two instalments related to the 2013/14 year had been pre-paid by the Commonwealth in the 2012/13 year and the Commonwealth announced in the budget that it would no longer be prepaying these grants."
While Mr Richardson said operating and capital grants accounting for 32 per cent of council's total income was fairly typical of most NSW councils, he conceded it could not function in its current form without grants and contribution.
"By this I mean that many of the core services provided by council (roads, parks maintenance, sporting fields, libraries, art gallery etc) would be wound back considerably or discontinued in some cases," he said.
"The payment of grants to council from other levels of government reflects the fact that a portion of income taxes and GST paid by residents should rightfully be returned to local areas to enable the provision of services and facilities.
The community should feel a sense of entitlement to these grants.
The 6.6 per cent increase in expenses from operation reflects a $12 million expenditure to complete the reinstatement of roads and other assets that were damaged during the 2012 flood event.
"Also reflected in the increase is a higher depreciation cost for council buildings of $3 million following a revaluation in the 2013/14 year.
"It is worth noting that overall employee costs increased by a modest 2.9 per cent during the year."
Mr Richardson said the majority of the $57 million in borrowings related to sewer borrowings and the current debt service ratio was relatively low at 2.4 per cent.
He added the budget forecast for the next two financial years currently reflected deficits that could be addressed in the coming months leading to the adoption of council's delivery program and the state government's fit for the future assessment.