Wodonga Council told to spend more

THE Victorian auditor-general has put Wodonga residents on notice about more rates pain with his damning report into a lack of spending on the city’s infrastructure.

John Doyle’s report said warnings dating back to the late 1990s about a lack of spending by councils on assets valued at $73 billion had largely been ignored.

Wodonga was one of five councils investigated for the report — the others were three metropolitan councils and Ararat.

The report showed Wodonga had planned to under-spend by $2 million, or 37 per cent, on renewing infrastructure in 2011-12.

Mr Doyle said the council should spend $25.6 million from 2011-2016 but only $23.1 million was planned, an annual renewal gap of $500,000.

He said the issue had to be confronted.

“Of course, spending more on assets requires raising revenue by increasing rates, increasing debt via further borrowings, or spending less on other services,” he said.

The two big-ticket items Wodonga has replaced in recent years are the entertainment centre and Stanley Street pool.

In the financial years 2009-10, 2010-11 and 2011-12, Wodonga spent less than it had allowed in its capital works budget.

The asset renewal gap refers to the difference between funding that councils need to renew existing assets and money they allocate.

Mr Doyle said councils needed to be more transparent when reporting underlying issues related to spending shortfalls.

“A 1998 report to government warned that unless steps were taken to address councils’ asset renewal gaps, the budget councils require for renewal would more than double by 2012,” he said.

“These predictions have materialised.

“The audited councils are generally budgeting less than is required to renew their assets and the funding needed for asset renewal continues to grow.”

Wodonga came under notice from Mr Doyle’s predecessor, Des Pearson, for being a council with a medium financial sustainability risk due to its large investment in Logic.

The Council’s business services director Trevor Ierino said the audit was a random sampling of councils and Wodonga was not singled out.

“All councils struggle to find a balance between a growing population and the management of assets while keeping rates as low as possible,” he said.

“Wodonga works hard to understand its assets and the condition they are in as well as trying to balance any new needs.

“Our strategic resource plan has specific chapters on asset management and it shows we have a plan in place for maintaining our infrastructure.”