Budget takes $340K blow

CLARENCE Valley Council will approve a $340,000 hit to its budget this afternoon to pay for the region's Rural Fire Service.

The amount is part of the 2013/14 Monthly Budget Review Report for February.

Overall, the report from the corporate and governance committee recommends council increase the budget deficit in the report by $42,540.

The increased payment to the RFS is due to confusion following changes to accounting practices for 2012-13 and a 34% increase in the amount to be paid to the State Government's Volunteer and Statewide Support Fund (VASS).

The report said the RFS allocation process had alway been contentious from the council's perspective, because it lacked transparency and ignored the council's budget cycle and timeframes.

Councils throughout NSW must pay 11.7% of the RFS contributions each year, while State Government pays 14.6% and insurance companies the remaining 73.7%

In 2012-13, the VASS payment was capped at the previous year's amount, which the council anticipated to be a one-off event.

But this year's allocation has again been levied at the prior year's contribution, plus an indexed amount.

"To make matters worse, this year's VASS component has also been increased by 61% on the previous year," the report read.

"Overall, the total allocation has increased by 34% on the previous year's amount."

However, the emergency services swings and roundabout pumped nearly $150,000 into the budget as the NSW SES assumed responsibility for control of its services in the region.

It was the largest of nine cost centres in the budget to provide a surplus variation to the February budget. Six cost centres contributed deficits to the budget.

The report said the council had not yet discussed its future level of support for the SES. It noted a reserve fund of $89,631 for SES services, plus the potential to get $300,000 from the sale of SES vehicles.

It said the SES operational costs surplus would assist in funding the increased RFS expenditure.

The report said the council's general fund remained above the $4million level set in the budget and was on track to reach $5.291million by June.

Last week's council committee meeting approved the budget variations.

SHORTFALL SUMMARY
Reason for the $340,422 increase to the budget deficit.

  • Shortfall in VASS reimbursement 2012-13 $68,725
  • Shortfall in previous year maintenance allocation $11,000
  • Current year VASS increase $197,525
  • Reduction in program charges reimbursement $63,172


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