SunRRA - Brim-bank’s Interest Windfall

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Sunshine Residents & Ratepayers Association

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Brim-bank’s Interest Windfall

Tuesday, 22 November 2005

Brimbank’s Financial Cash Cow - Interest Received from Non Expensed Capital Expenditure.
SunRRA has researched the last four years of interest income reported in Brimbank’s Annual Reports (2002 – 2005) and found that Brimbank Council has reported revenue of interest earned in excess of $5.5 Million dollars over this four year period.

SunRRA also found that $3.195M of the $5.5M interest revenue was for “bonus” interest. Click to view table 1 here.

This is interest from community funds set aside for community projects such as Sunshine Pool that have all slipped way behind timelines due to Council’s inability to plan, consult and manage effectively.

The “bonus” interest of $3.195M equates to $66,500 per month for the last 48 months.

These windfalls effectively rebut Council’s recent statements in Press Releases where it has tried to blame community groups (who have appealed to VCAT on planning matters) for the Sunshine Pool redevelopment project’s cost increases of $30,000 per month.

Council is clearly raking in more than enough “bonus” interest to cover the project cost increases. The Council’s reasons for the huge “bonus” interest revenue windfall are quoted in the 2004 & 2005 Annual Reports as follows:

“Good management practices combined with funds not used for capital projects in this financial year (due to projects being carried forward to subsequent years) resulting in additional investment opportunities increasing interest revenue by $1.3 million. “
(2005 Brimbank Council Annual Report).

The Brimbank Council’s appalling track record in management of the time, cost and quality aspects of capital works projects is an issue in itself that needs to be urgently reviewed and fixed. SunRRA will focus on it at a later date.

Brimbank Council’s habit of putting off projects year after year seems to have a great incentive with Council earning millions of dollars on unspent funds. What are the millions of dollars earned on interest being spent on? We could have built the outdoor Sunshine pool with this money.