CEO New Year Message - Addressing Our Financial Future

Published on 31 January 2025

Julie Costa, Acting Chief Executive Officer

With a busy start to 2025, I’d like to take this opportunity to update you on how Council is approaching our financial situation and how we are developing a strong and robust plan to achieve long term financial sustainability.

Pictured: Yass Valley Mayor Jasmin Jones welcomes Jason McGuire, our new Chief Financial Officer, to the Yass Valley Council team. 

A Fresh Start with a Strong Financial Management Team

We are entering the new year with a clear understanding of our financial position for the 2024-25 financial year, allowing us to make some big decisions about where our income comes from and how it’s spent.

We are very pleased that our new permanent Chief Financial Officer (CFO), Jason McGuire, has now joined the team and he brings over three decades of finance and resource management expertise from Federal and State government departments.

Prior to this, an UHY accounting team has been working as our contracted CFO and they presented Councillors with a clear financial picture just before the December Council meeting. These reports will now be made public and can be found on our website (Council Meeting 16 December 2024 - Attachments).

Together with Jason, UHY and our qualified and committed Councillors, we now have a strong team ready to tackle the financial challenges ahead.

Understanding the Numbers

In a nutshell, our latest financial review showed that, although we have sufficient cash reserves to operate in the short-term, we need to improve our long-term financial position and critically review our budget to ensure that it is balanced and sustainable going forward. i.e. do we have the resources to do what we planned?

The current forecast budget deficit for 2024-25, as published in the 2024-34 Long term Financial Plan, is $4.761 million and the intention is to reduce this down over the next few years.

The advice from UHY is that our first step towards balancing the budget and improving our financial sustainability is to reduce our current 2024/25 operational budget by $2 million, with a view to further review our financial commitments and income in the 2025/26 budget.

As recommended by the Office of Local Government during their recent visit in December, we need to explore all potential levers that we can pull to balance community services with the income we receive from rates and grants. They reiterated that we are not alone in this position as many other Councils are facing similar challenges. Rising costs, high service expectations and inflation affect us all. 

Potential solutions, and the levers used by other councils to manage their deficits, include raising rates, applying for grants, selling off surplus land holdings, or reducing some services. We also will be looking at improving our accounting systems to better report how and where the money can be spent.

Our challenge now is to decide on the most appropriate course of action for the Yass Valley community. We will approach this with full transparency and engage with the community as we work through this process.

Improved Financial Management and Accounting Processes

With a clear financial picture now available and an experienced CFO on board, the Council is in a strong position to move forward. At an Extraordinary Council Meeting (EGM) held on Thursday 30 January, Councillors agreed to seek further advice on improving some of our accounting methods, particularly in the internal allocation of costs between various services and funds (such as ensuring the full costs of water, waste and sewerage are in the right restricted fund), and improving handling of grant revenue to reduce errors in our internal financial accounting processes (such as how to manage costs whilst waiting for grant funds to be paid). This will further improve the quality of our financial reports and allow us to make better informed decisions.

Where the money is spent

We receive income from many different sources (e.g. rates, interest payments, grants, assets) and it is allocated as follows:

• Rates paid by the community: These are allocated to essential services, including roads, waste, parks, planning, pools, sporting facilities, playgrounds, libraries, civic services, and amenities.
• Crago Mills Project: It is intended that the Crago Mills project will be financed by funding streams such as grants and land sales. There is no intention for it to be funded by a special rates variation (SRV), which can only be used for pre-determined infrastructure maintenance, renewal and upgrade projects.
• Water Treatment Plant: The $36 million water treatment plant upgrades are being funded by State and Federal grants.

Collaboration and Accountability

We’re not facing these challenges alone. The Council has been working very closely with the Office of Local Government to ensure our financial practices meet the required standards. The Audit Office have reviewed our accounts and provided an unqualified report (meaning they consider our financial statements to be a true and fair view of our financial position). We will also be engaging with the local community, as your feedback will be essential as we shape the decisions that will affect us all.

Looking Ahead

Over the next six months, we’ll continue to share regular updates to keep you informed about our financial strategies.  The financial management team are now working towards the February Council Meeting, where we will be discussing the next steps of the financial action plan and most effective ‘levers to pull’ to implement the reduction in the operational budget.

Thank you for your continued support.