MORE than $2.5 million could be transferred to the City of Melville’s Rates Equalisation Reserve to offset future pain to residents.
Audited financial statements for 2016-17, presented to councillors at an agenda briefing earlier this month, revealed a surplus of $3.03 million.
The figures were included as part of financial services manager Bruce Taylor’s 2017-18 mid-year budget review, to be considered at the City’s March 20 council meeting.
In line with a 2016 council resolution, Mr Taylor recommended the surplus – less $250,000 in opening budgeted funds and $255,000 to balance the 2017-18 mid-year review – be allocated to the Rates Equalisation Reserve “to offset future rate rises”.
An additional $2.52 million would take the reserve, established in 2014-15, to $7.3 million.
Acting chief executive Marten Tieleman said the purpose of the reserve was to retain any surplus funds, reduce the need to increase rates and meet any shortfalls identified during budget reviews.
“The potential saving per ratepayer is dependent on the amount used for any given year,” he said.
“As the 2018-2019 budget is still underway, the amount that might be used for this financial year is not yet known.
“It is known however that future projects planned by the City are yet to have funding identified in the City’s long term financial plan.
“The reserve may be used to fund some of those projects as an alternative to an increase in the level of rates that would otherwise be required.”
If Mr Taylor’s recommendations are supported by the council, $255,000 will be brought back from the reserve to balance the 2017-18 mid-year budget review.
“The $255,000 will cover some shortfalls such as reduced LeisureFit Centre income and rent for commercial tenancies,” Mr Tieleman said.
The reserve has previously been used “to balance out unexpected major variations in income or expenditure” in 2015-2016 ($1.19 million) and 2016-2017 ($1.23 million).