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Building on the backlog

17 Jan, 2012 07:19 AM
Infrastructure backlogs have been a major part of the local government debate since former NSW Treasury secretary Percy Allen produced a landmark report in 2006 that shone a spotlight on the state’s crumbling council assets.

In 2007, Mr Allen produced a detailed report for Newcastle City Council, which calculated the value of the Newcastle shortfall to be $134million.

The latest Newcastle accounts show that the infrastructure backlog is now $122million, which appears to be an improvement on the 2007 situation.

But care needs to be taken when making comparisons because council finances – subject as they are to various accounting treatments – can be somewhat opaque.

For example, at the start of this financial year the council’s infrastructure, property, plant and equipment had a ‘‘fair value’’ of $1.82billion but a ‘‘written down value’’ of $1.62billion. At the end of the year the fair value had risen to $2.2billion but the written down value had fallen to $1.29billion. This was because a change in accounting standards had cut the value of the council’s community land from $492million to $118million.

As difficult as the figures might be to interpret they are important to note because councils use balance sheet infrastructure backlogs to justify big increases in land rates.

It doesn’t take the fine print of a council report, however, to show crumbling infrastructure is a reality. Newcastle’s ageing council buildings are well known. The other Hunter councils nominate roads as their main concern.

All up, the five-council backlog stands at $379million, an increase of $50million in two years.

The state government has unveiled a $70million assistance program for councils to tackle their infrastructure problems but it requires councils to borrow money to obtain a subsidy on the interest.

As generous as the help might be, councils that are already finding it hard to make ends meet will be thinking twice before going deeper into debt.

Angling for answers

A GROUP of Port Stephens trawlermen – anticipating the creation of a new marine park in their area – are adopting the unusual approach of admitting the unsustainability of their work practices as a means of reinforcing their request for a government buyout of their licences.

Some environmentalists have been quick to back the call, arguing that removing the fishermen will permit a traditionally highly productive marine environment to recover from years of rough handling by commercial interests.

At first blush their case seems sound, but perhaps the matter needs a closer look. With intelligent handling it ought to be possible to encourage the recovery of the fishery without totally sacrificing the benefits that come from access to a prolific source of healthy seafood.

The best approach may prove to be a reduction in the number of commercial fishing licences combined with more sustainable fishing practices and higher prices for premium wild-caught seafood.

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Date: Newest first | Oldest first
IPART needs to question NCC's management plans when considering a proposed rate rise.

All management plans have claimed to make a big dent in the Percy Allen $134m backlog.

Now after 5 years wthe backlog is $122m or a reduction of only about $2m per year.

Where has the funds gone and why have the Management Plans been failures?

Could be Council need to listen to ratepayers.

Posted by Bigfeller, 17/01/2012 7:41:48 AM, on The Herald
@Bigfeller: In my opinion there is too much time and energy put in to preparing and publishing and changing plans such as management plans, zoning etc. It is happening every couple of years and costing millions of ratepayer dollars. When plans are drawn up they should remain in force until a defect is found and not changed at the whim of self-interest groups. Once in place the plans should be followed unless in exceptional circumstances like the provision of upgraded or new local infrastructure. Trips o/and to LG Assoc locations throughout the state discussing issues of no effect for their city are out.
Posted by spike, 18/01/2012 7:24:13 PM, on The Herald
If the Councils had done the necessary maintenance in timely manner, there wouldn't be any backlog. Every year they delay maintenance, more repair work accumulates, so does the cost. City Councils need good leadership, knowledge of budget management and managerial skills. City Mayors so far have not been effective in dealing with the problems and to provide strong leadeship, as they seem to be nothing more than political figures.
Posted by FG, 20/01/2012 1:54:01 AM, on The Herald

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