$25 million down, $37.6 million to go
WESTERN Downs Regional Council will reduce its debt by 40% after councillors agreed to the cost-cutting move at their ordinary meeting on Wednesday.
The repayment of $25 million of debt will improve the council’s future flexibility and result in interest and redemption savings of more than $30m.
The decision to reduce council debt follows the appointment of new chief executive officer Ross Musgrove, who has been driving measures to curb spending and free up capital since he started in May 2015.
The initiative was spearheaded by councillor Ian Rasmussen.
The loans to be paid have an average interest rate of 5.48%, compared to the council’s current borrowing rate of 2.5–3.6%.
The loan repayments will reduce the council’s current portfolio of 38 loans to just five loans.
The remaining loans fund the delivery of major infrastructure such as water, sewerage and saleyards.
The council’s net debt will reduce from $62.4m to $37.6m, which is roughly the same debt the council held at the end of the 2011–12 financial year.
This repayment will reduce the region’s debt from $3264 per ratepayer to $1967 per ratepayer.
Councillor Ian Rasmussen, spokesman for corporate support, said it was an “outstanding achievement” that demonstrated the council was delivering value for ratepayers.
“It puts the Western Downs region in its strongest financial position in many years by providing council the ability to strategically choose how to invest these savings into other projects and activities in the future, and reduces our interest bills, which frees up more operating funds,” he said.
Mayor Ray Brown said the decision positioned the council as a leader in financial management across Queensland local governments.
“We’re committed to paying down council’s debt and keeping debt at a manageable level – and living within our means is
critically important to our region’s future success,” CrBrown said.
“Council will be able to retire debt, strengthen our financial position and deliver important community infrastructure that improves amenity works that make a real difference to people’s lives.
“For me personally, knowing that council is in such a strong financial position and so well placed to meet any future challenges is a great way to end my tenure as mayor for this great region.”