Heath Henwood has decided to contest the mayoral election in Livingstone Shire. Photo: Chris Ison / The Morning Bulletin
Heath Henwood has decided to contest the mayoral election in Livingstone Shire. Photo: Chris Ison / The Morning Bulletin Chris Ison

Livingstone Mayor rejects rival's claims of debt issues

LIVINGSTONE Mayor Bill Ludwig yesterday rejected claims from a rival candidate that council debt was "spiralling out of control".

Cr Ludwig dismissed the comments made by mayoral race rival Heath Henwood who had asked in a statement, "how much debt is too much?"

Cr Ludwig said "a selective graph circulated by Mr Henwood" only showed the first few years of the council's long-term financial management plan and was "very misleading".

Mr Henwood had said that the council "had no problem sinking the community further into debt" with the projected 2016/17 budget including a debt rising to $84.8m while the 2017/18 budget would further extend Livingstone's debt to $95m.

"I am sure that the council will argue that we borrow for projects, so that the burden is spread across future generations," he said.

"However this is just an excuse to burden our children with a debt for things we cannot pay for now."

He said Livingstone had at least 17000 rate payers equating to a current debt of about $4411 for every ratepayer rising to $5588 in 2017/18.

"I have to express my concern as the debt continues to escalate. Who is going to pay for the debt and the interest bill that is spiralling out of control? "

But Mr Ludwig said Mr Henwood had not included the full details from the council's "10 year financial management strategy" which forecasts debt reducing to $63.7m by 2025 - and council's asset base growing from a current value of approx $918m to $1.38 billion.

He said being able to deliver a positive long-term strategic financial management plan was assisted through Council's success in securing approximately $75m in major infrastructure funding from the State and Federal Governments.

"Anyone who has run a successful business knows borrowing to build major long-term assets is the most effective means of spreading the cost," Cr Ludwig said.

"In Livingstone's case the State and Federal government are funding between 50 to 75 per cent of the cost of projects like the Yeppoon and Emu Park Foreshore Revitalisations, Statue Bay Scenic Highway reconstruction, Panorama Drive, Multi-level carpark, Barmaryee sports complex, Coorooman Creek Boat Ramp upgrades, 'black-spot' road funding and sewerage plant upgrades.

"This funding has allowed council to build critical infrastructure and undertake economic development projects while limiting future debt increases during major construction to a forecast high of $95.2m in 2018 reducing to $63.72m by 2025.

He also countered further claims by Mr Henwood who had attacked the council over a budget report which stated "possible liquidity issues in the 2016-17 financial year".

Mr Henwood had said that "in plain terms, this (warning) places doubt over Livingstone council staying financially viable.

"How many more secrets is the council hiding?"

But Mr Ludwig said the "liquidity issues" line was taken out of context and related to the importance of the council staging its "funding and adjusting cash flow to coincide with State and Federal Government contributions".

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