City’s budget eats into future cash reserves

By Roje Adaimy

A spending spree on capital works projects over the next four years will leave the City of Sydney’s cash reserves almost $250 million worse off.
According to projections outlined in the Council’s draft budget, there will only be $164.9 million left in reserve by 2012 ‘ less than half of the $409 million available this year.
The cash reserves, which are used as contingency to cover future expenses, will be partly spent to fund one of the Council’s largest ever capital works programs. A total of 152 projects have been planned, with several already near completion including the upgrade of Glebe Point Road, refurbishment of Sydney Town Hall, the new Redfern Park and the Surry Hills Library and Community Centre.
But the City has denied claims that the spending spree will put pressure on meeting the future needs of the local community.
“The City will maintain prudent financial reserves to support Council’s ongoing operations,” a City of Sydney spokesperson told The City News. “Future capital works programs will be developed in line with future cash operating surpluses each year and ensure the financial sustainability of the City of Sydney.”
Liberal Councillor Shayne Mallard believes funding for projects beyond the current 2008/2009 budget could be at risk unless drastic measures are taken.
“In 2012, the Lord Mayor of the day will have little scope to provide new services or infrastructure unless they borrow, increase taxes, or sell assets,” Cr Mallard said. “They want to spend all the cash today and leave no nest egg for tomorrow’s generation.”
But Independent Councillor Robyn Kemmis downplayed these concerns, saying that budget forecasts had been carefully calculated to reflect a sustainable future.
She said she was “comfortable” with the cash reserves projected for 2012, and did not believe the Council needs to replenish them.
“It’s a very healthy reserve, a lot healthier than other councils in the state,” Cr Kemmis said. She said that ratepayers expected their money to be spent on major projects.
“The Council is doing exactly what it should be doing to address the capital works needs of the community.”
The draft 2008/2009 budget has allocated $38.4 million for new footpaths and roads, $20 million towards cycling infrastructure, $11.7 million for trees, parks and pools, as well as $23 million for cleaning and waste, including new recycling bins for residents.
Several projects in Lord Mayor Clover Moore’s Sustainable Sydney 2030 vision were have not been accounted for in next year’s budget. Cr Moore would not comment on whether the remaining cash reserves would be enough to sustain all of her project ideas.