City of Fremantle defends finances despite MyCouncil website finding it has worst financial health of metro local governments

City of Fremantle defends finances despite MyCouncil website finding it has worst financial health of metro local governments

THE City of Fremantle is in the worst financial health of any metropolitan local government, according to the MyCouncil website’s most recent statistics.

The 2015-16 data lists Fremantle’s Financial Health Indicator (FHI) at just 42, a big drop from the 79 recorded in 2014-15 and 12 points lower than the second-worst in the City of Canning, with 54.

To be considered financially sound, a council had to receive an FHI of 70 or more, the score calculated after taking into account information such as debt, assets and revenue.

City of Fremantle city business director and acting chief executive Glen Dougall said it was a one-off poor score because of three factors.

“The first was a change in our accounting methodology to simplify the way we record overhead costs, which artificially inflated our year-on-year operating expenditure,” he said.

“The second was that the debt ratio is measured only against the operating result and doesn’t take into account the City’s freehold assets, which are currently three times the value of our debt.

“The third is the reporting of our asset renewal – again a change in the way we manage our asset data affected the result for last year.

“The City is independently audited every year and has always been found to be in a healthy financial position.

“The MyCouncil ratios, although providing some measure of financial performance, do not provide a comprehensive assessment of councils’ financial viability.”

Fremantle also reported a Full Time Equivalent staff (FTE) count of 390, one of the highest in the metropolitan area, despite having a population of just 31,046.

In comparison, the Town of Cambridge and City of Kwinana, which have the closest comparable population counts with 28,250 and 37,149, have a reported FTE of 197 and 235 respectively.

Only 10 metropolitan councils had more FTE staff, however all but two have populations of more than 100,000 people, with the smallest being Mandurah with just under 84,000 residents.

Mr Dougall said Fremantle’s high staff count was a result of its “second city” status.

“Unlike the vast majority of suburban councils, as Perth’s second city we require staffing levels to maintain the Fremantle city centre, as well as provide services at a regional level,” he said.

“The Fremantle Arts Centre, Legal Centre, The Meeting Place, One Stop Shop and our extensive festival and events program are examples of important services that cater to catchment areas far greater than Fremantle itself.

“The City is running much leaner now in terms of FTE than 15 years ago (when it peaked at 444).”

The 2016/17 information will be released in early 2018.

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