'We may be deemed insolvent': Lismore GM's dire warning
A CONTROVERSIAL budget approved by Lismore City Council could lead to insolvency, the council's general manager has warned.
The council voted on Tuesday in favour 6-5 of approving the 2020/21 operational budget, after several amendments added to the financial plan created a deficit of $458,000.
Councillors spent more than three hours debating what additional budget measures should be included after an extensive community consultation saw more than 200 submissions calling for changes to the draft plan.
Many people were outraged the council planned to cut funding for the arts, waste facilities and other regional projects.
After some consideration, the council decided to amend the budget set out by staff, including restoring the NORPA management fee of $180,000 for the next 12 months and allocating one waste voucher per property capped at 5000 vouchers per year.
But general manager Shelley Oldham said these additions to the already struggling budget, which staff had originally forecast as having a deficit of $282,000, could lead to challenges ahead of the annual audit.
Ms Oldham said the annual financial audit report later this year could determine council is not "responsible and sustainable" enough to continue for the next 12 months.
"There is a real risk … we may be deemed insolvent," she said.
"Given our history of having very significant shocks quarter on quarter each year, we have no buffer to deal with (any more shocks)."
Ms Oldham said if the council is deemed insolvent, a financial controller would be appointed by the government to mitigate the council's "inability to meet (its) financial performance targets".
Councillor Adam Guise, who voted against the budget, said he couldn't support it because it poorly reflected what the community desired.
"We are here to represent the community and provide services, so if people are telling us these things are important to them, we should be designing a budget that (reflects this)," he said.
"I don't have confidence we won't see further shocks.
"We've had our general manager tell us tonight there's a potential to be performance managed or have a financial controller … but we don't have any information about what the financial figure is to trigger that.
"I don't have confidence this is a budget that can hold to the figures we've budgeted for."
But Cr Elly Bird said the council simply didn't have a choice.
"This is a budget none of us ever wanted to see, it's clear the cuts across our organisation are substantial and the impacts to our community is significant," she said.
"We've got no cash and we've got nothing in the bank.
"We all know the writing is on the wall and things aren't great, without increased revenue what are we going to do, we just have to keep cutting."
The budget also forecasts the impacts of COVID-19 could cost the council up to $1.5 million in lost revenue in the next financial year.
•The Northern Star will be breaking down the 2020/21 budget for readers to explain how it will impact ratepayers. Keep an eye out for our coverage.