Southern Downs council faces another "Credit Risk Review"
IN A further sign of the financial strain that Southern Downs Regional Council is currently under, they have again been selected for a Credit Risk Review.
Queensland Treasury Corporation is undertaking the review of council on behalf of the Department of Local Government.
The review is expected to be completed by the end of January.
Southern Downs Regional Council CEO David Keenan said the review was due to council's dire financial position.
"Southern Downs Regional Council was selected as it remains on a watch list of local government authorities in Queensland that are assessed as having a weak and negative outlook from a financial sustainability perspective," he said.
"The purpose of the Credit Risk Review is to assess, Southern Downs Regional Council's capacity to service its current portfolio of debt and the proposed increase in debt arising from its forecast borrowing, and identify credit and other risks which may affect SDRC's debt servicing capacity and the financial vulnerability of SDRC to those risks."
Mr Keenan said the watch list is under the auspice of the Department of Local Government, not QTC.
"In essence the watch list is made up of the local government authorities that are assessed as being deemed higher on the relative risk assessment or receiving a red classification in relation to overall financial sustainability," he said.
"To be removed from the watch list, local government authorities must demonstrate over a period of time that practices are being put into place that improve cash management, reduce expenditure, increase or diversify income and effectively manage the creation of new assets and the renewal process for existing assets."
A Queensland Audit Office report that was presented to Parliament last year indicated that Southern Downs Regional Council is classified as "higher" on the relative risk assessment, along with North Burnett Shire.
Councillor Vic Pennisi said he had not been informed of a review.
"I have not been briefed on any meetings that have taken place with QTC this year, however I am sure that if any have taken place we will be advised in the near future," he said.
"In relation to the financial situation I have not personally met with QTC and discussed our financial situation however I have discussed my concerns in relation to finances with the Mayor and councillors and I have not supported increased debt or deficit budgets in the past."