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Council in a strong financial position

Posted Wednesday 24 April 2013

Last week the Minister for Local Government, Mr. Don Page, publicly stated that he was “disappointed that Mosman Council is among the financially weakest councils in Sydney”. These comments are absolute nonsense.

The Minister’s comments were based on a report issued this month by the NSW Treasury Corporation (TCorp) which described Mosman as having a weak “financial sustainability rating”.

Confusingly but much more accurately, the TCorp report also described Mosman as one of only five councils in NSW with a positive financial “Outlook” over the next three years.

The simple facts are that Mosman Council has an enviably strong and sound short and long-term financial position, with relatively little debt, a very strong balance sheet, many revenue sources, a recurrent budget surplus despite very conservative assumptions about depreciation and ample capacity to meet all short as well as long-term needs.

The allegation that Mosman Council has weak financial sustainability is based on flawed economic analysis with arbitrary weightings to various accounting ratios, some of which have no real economic significance, a one off devaluation of council’s assets two years ago with no current implications, and major variations among councils in treatments of depreciation which the Division of Local Government has been unable to resolve.

I will be publicly documenting these anomalies shortly.

Meanwhile anyone who is interested in a presentation and discussion of our Council budget, balance sheet and financial planning is welcome to come to our on the subject in the Council Chambers at 7pm next Monday 29 April.

Cr Peter Abelson, Mayor of Mosman