$3m windfall raises questions

By Jim Mynard
THE City of Casey has refuted a claim that it had spent $3 million over budget.
Araluen Ward councillor Rob Wilson on Tuesday 6 September shocked the council when he asked for a detailed report of overexpenditure on the operating budget.
Casey mayor Neil Lucas immediately said he was concerned about Cr Wilson’s request and said the council was not over budget.
Cr Wilson asked that the report be presented to the next council meeting with reasons why there was a $3 million overexpenditure.
Cr Wilson said the council budgeted to spend $95.1 million, but had spent $98.8 million.
“I am not sure if the councillors approved the overexpenditure, but I am not happy about it.
“I would like to know if it was done by council decision. It is of concern if the council cannot adhere to its budget,” he said.
Cr Lucas: “It concerns me when you come up with these things when the press is present and they only get half the story.”
The mayor said Cr Wilson had time to ask officers about the figures prior to the meeting, but Cr Wilson said he didn’t want to be lectured by the mayor.
Casey acting chief executive Steve Dalton said the council actually had an operating surplus of $3 million and not an overexpenditure.
Cr Wilson: “If there is a reasonable explanation of why the overexpenditure happened I would like to hear it.”
Mr Dalton said Cr Wilson’s request was simply explained. The council had received more income than expected for projects planned for the future and the money was placed in reserve, he said.
“Because it was transferred to a reserve account it showed as an expenditure in the accounts.”
Cr Lucas said the extra $3 million received came mainly from developer contributions.
“This was a receipt, but the accountant put the money into a specific account so it could only be spent in the area that generated the developer fees.
“This then showed up as an expense because of the way accounting is done.
“The money wasn’t spent on anything, it was simply transferred to another account,” he said.
Casey finance manager Veronica Hickin said in a report to the Tuesday 6 September council meeting that the council surplus was $3.09 million.
Ms Hickin said the surplus, although small in a $134 million budget, provided an opportunity for the council to advance required works.
She listed alternatives for the money including financing extra capital works prioritised in the fiveyear plan, reducing debt, decreasing future borrowing, transferring to reserves for future works, or retaining the surplus to “smooth” or reduce future financial pressures.
She recommended that $2 million of the surplus be put in reserve for the proposed Cranbourne aquatic centre and listed other projects on the priority list.
Springfield Ward councillor Ben Clissold suggested that $405,000 of the money that Ms Hickin earmarked for the aquatic centre be used to buy a second mobile youth information centre.
Councillors deferred the item for a briefing and further discussion.
Cr Wilson then raised the overexpenditure issue.