INDIGO mayor James Trenery believes his council has managed to produce a "fantastic" budget in the face of rate capping and the freezing of federal government grants.
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The draft budget will be adopted by the council on Tuesday with a rate rise of 2.5 per cent in line with the Victorian government's cap and a forecast deficit of $170,000.
The council is expected to have a deficit of $600,000 for the current financial year.
"To get it back down to $170,000 is a good result, considering our income from the federal government is still frozen and the 2.5 per cent rate cap from the state government," Cr Trenery said.
"I'm very happy with that.
"Ultimately we would like it to be zero, but considering the reduction of income with hits from the federal government and rate capping it is fantastic."
Cr Trenery said without rate capping the rise would probably have been 3.05 per cent, down from a 4.5 per cent increase last year.
He said cuts to the hours staff worked, rather than the abolition of positions, had contributed to reduced costs.
The draft budget will also include $40,500 for State Emergency Service units and $47,000 for youth services after those contributions were originally omitted.
"We deemed it important enough to go back in the budget," Cr Trenery said of the SES funding.
"Our intent is to have the state government eventually take it over but we want to work with the SES about that happening."
Budget spending includes $125,000 for October's council vote, $480,000 to widen 2.1km of the Chiltern-Yackandandah Road to improve safety and $30,000 for new playground gear in the shire.
There will also be $170,000 for kerb and channel works on three Chiltern streets, $30,000 to lift the Yackandandah Memorial Hall and $160,000 to upgrade the Gooramadda Road bridge.
Cr Trenery said the budget also included money for a Barnawartha structure plan.
"There is a need to plan for expected growth in that area due to the establishment of the Barnawartha saleyards and jobs that flow from the new rail hub at the Logic Centre near Wodonga," he said.