One of metropolitan Melbourne’s lowest-rate charging and highest investing councils, Glen Eira City Council, is using its sound balance sheet and a manageable borrowing program to provide the infrastructure and stimulus the community needs to respond to the Covid-19 challenge.
The pandemic has already knocked a big hole in Glen Eira’s $52 million planned capital works program for next year. A COVID-19 hit to cash-flow, community consultation stalled for safety reasons, lack of construction supplies and even doubt as to whether contractors could be found, saw the program cut by almost $20 million, Glen Eira CEO Rebecca McKenzie said.
However, armed with $60 million in extra borrowings across the next 10 years, including $10 million at Victorian Treasury rates, Ms McKenzie said that Council is confident that it can “continue to deliver on the community’s ambition, stimulate the local economy and continue to maintain a financially viable organisation through the pandemic.”
The borrowings will help “smooth out” next year’s capital works slowdown by funding larger capital work spends in future years.
Like most councils, Glen Eira has always been relatively risk averse when it comes to financial management, but the borrowings represent a willingness to balance risk and ambition. “The council indicated that they were comfortable with a little more ambition and that meant taking a little more risk in order to achieve that,” Ms McKenzie said.
Council responded to the speed and scale of the pandemic with a $7.3 million package of measures to support Glen Eira residents, clubs, community groups and businesses. This was swiftly followed up with more detailed consultation and engagement with affected groups to ensure that the measures were delivering what those stakeholders really needed.
The package consists of concessions, grants, rent and rate waivers and other measures that directly contribute to the community, either to assist residents and businesses through the crisis or to assist them to maintain their sustainability as they recover.
The complexity of managing local government finances through this period also impacts front line critical service delivery.
“Childcare centres are vitally important for keeping essential workers in employment, so there is no way we would stop providing the service but the Federal Government’s policy of free childcare also means that Council must contribute $120,000 a month to continue this service,” Ms McKenzie said. Glen Eira is also the only Victorian council that still provides residential aged care.
“These are critical services that are highly valued by our residents and their families. We choose to invest in them because they help us to deliver good social outcomes. These are the decisions that councils make that aren’t necessarily the decisions you would make if you were running a high-street business, but they are absolutely in the interest of our community.”