OUTSTANDING rates owed to Indigo Shire Council have more than doubled over the last four years creating occasional budget challenges.
Council’s CEO Trevore Ierino said the figure has crept to around $4 million up by $2.5 million from an earlier tally of $1.5 million four years ago owed from rate payers across the board.
The amount began to accrue when in the middle of COVID-19 the state government requested councils not to chase outstanding debtors for at least two years due to various impacts on people such as job losses.
Mr Ierino said usually a normal process is undertaken including reminders escalating through to debt recovery processes if necessary.
“We work with everyone who has difficulty paying where arrangements can be made for payment,” he said.
Mr Ierino said some ratepayers do not make contact with council with debts continuing to increase.
“Restrictions on payment follow up has been recently lifted and we’re back to normal for debt recovery,” he said.
“We encourage people to get their rates back up to date because of penalty interest on outstanding rates.
“Over time when rates build up its also harder and challenging for some to pay their rates in any given year.
“There are options to pay by instalments or have a repayment plan and people need to contact us to make those arrangements.”
Mr Ierino said council is reluctant to undertake normal collection procedures but people need to get in touch if payment plans are needed.
The chief executive said unpaid rates are not considered bad debts in the long term as legislation requires payment one way or another such as a house can’t be sold until the debt is cleared.
In the short-term failure to pay rates impedes cash flow with shortfalls in an established budget based on expected rate income.
Mr Ierino said council does at times goes into an overdraft situation to cover the shortfall but it doesn't happen too often.
“We usually get back to a situation where there's a small surplus at the end of the year, but sometimes during the year, when the reserves are low, we can go into overdraft.
It’s temporary situation as the instalment notice is staggered on very specific dates - September, November, February and May.
For example, in a heavy capital program during the summer months a lot of money may have been spent while waiting for main instalment money to come in.
“We have been in the position at the end of each year in being back to the positive with a small buffer in the but each year the buffer is getting lower,” Mr Ierino said.
“I don't have concerns that this will necessarily continue to grow.
“We do like to have $3 million to $4 million at the end of the year for a buffer so we're not going into overdraft.
Income is derived from many sources with around $20 million received from rates.
As an example for the last couple of years with debt growth of around $500,000 or $600,000 a year, council has received around $19 million instead of $20 million from rates income.
