Why Wollongong council's $10 million loss isn't what it seems
Draft annual report to go to Monday's council meeting
Despite recording its first operating deficit in years, Wollongong City Council increased its cash reserves and delivered nearly $90 million in infrastructure projects.
Wollongong City Council has posted a $10.2 million operating deficit for 2024-25, a stark reversal from the previous year’s $41 million surplus. But the headline figure its not all it seems.
The deficit, as revealed in the draft annual report to be presented at council’s November 17 meeting, is heavily influenced by accounting adjustments rather than operational issues. Three significant non-cash items added $35 million to the reported loss: $16.6 million in prior-year work-in-progress expenses, $12.1 million in depreciation from asset revaluations, and $6.3 million in asset disposal costs linked to renewal timing.
Strip away $45.5 million in capital grants - which fund infrastructure growth but warp operational performance - and the underlying deficit stands at $55.7 million. However, this is an improvement from the previous year’s $59.8 million underlying deficit.
‘Economic challenges’
It’s important to note, council increased its available funds by $5.1 million while delivering an $87.8 million capital program.
“Council’s forward estimates indicate minimal movements in Available Funds over the next 10 years, with council generating sufficient cash to fund its services and deliver on infrastructure renewal requirements,” the draft annual report states.
The result reflects broader pressures facing NSW councils: reduced grant funding, escalating materials and service costs, and growing depreciation expenses as aging infrastructure requires revaluation.
“Council continues to maintain a strong financial position,” GM Greg Doyle wrote in the draft report, “with low debt levels and robust asset management practices. Work is ongoing to refine asset valuation processes and manage long-term infrastructure costs.
“We remain focused on delivering value to the community while navigating economic challenges.”
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