Alexandrina Council has made significant changes to its draft Long Term Financial Plan and says it is on track to be in surplus in 2026/27.

CEO Andrew MacDonald says the changes will substantially reduce projected rate increases over the coming four years.

Responding to the Essential Services Commission of South Australia (ESCOSA) Review on the performance of Alexandrina Council released on Friday 28 February, Mr McDonald says the council aimed to become a financially prudent and sustainable organisation.

“I acknowledge the ESCOSA Report, but I would like to reassure the community that we have not been idle in the months that this review was being compiled,” he says.

“ESCOSA’s assessment that Council’s current financial performance is unsustainable and that our projected financial performance is potentially unsustainable is based on a Long Term Financial Plan (LTFP) that we are in the process of overhauling.

“That LTFP was put out for public consultation late last year as part of our Strategic Management Plan Review. It was not endorsed by our Audit and Risk Committee in February, nor was it endorsed by Council Members at their last meeting.

“Since joining this organisation, I have been working closely with the Financial Team to review all our operations.

“We have also been working closely with Council Members to workshop the LTFP as part of the 2025/26 Annual Business Plan and Budget process. This work will continue and the community will be able to see our new LTFP when the ABP goes out to public consultation in May.

“The community had a preview of that work at our public budget workshop last week.

“We have significantly reduced expenditure, removing any non-essential expenditure and demonstrating significant restraint in coming years regarding new projects.

“The draft LTFP consulted on late last year and reviewed by ESCOSA had projected rate rises of CPI plus 3% for three successive years and then a 2% sustainability rate plus CPI.

“We’ve cut that in half. In 2025/26 we are proposing CPI plus a sustainability rate rise of 1.75%, reducing to 0.75% in 2026/27 and then 0.5% in subsequent years.

“That has taken Alexandrina’s projected rate increases from 11% over four years to 3.75% over four years.

“Collectively, Council needs to hold its breath and demonstrate restraint when it comes to expenditure, but I believe we are on the right track to becoming an economically sustainable organisation, provided expenditure continues to be managed responsibly.”

The ESCOSA review found that the council had recorded an operating deficit of $7.1 million in 2023-24 and was forecasting operating deficits for the next four years, predominantly caused by its comprehensive asset re-revaluation.

Depreciation expenses had increased by $4.3 million or 30.5 per cent after it revalued its local roads, kerbs, footpaths and other assets in 2022/23.

A further increase to its depreciation expense of $0.9 million was forecast in 2024/25 for other asset revaluations.

Mr McDonald says the ESCOSA Review made 10 recommendations and all are being implemented through the overhaul of the draft LTFP consulted on late last year and through the Strategic Management Plan Review, which includes the Strategic Asset Management Plan 2025-2035, and the council’s ongoing Annual Business Plan and Budget processes.

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