Financial blow

FREMANTLE has again been judged to have the worst financial health of all metropolitan councils by the state government.

Recently updated figures on the local government department’s Mycouncil website have seen Freo’s financial rating plunge from 87 to just 44. The metropolitan average is 73, and the nearest low-achiever is Nedlands council which hit a pass mark on 50.

Two years ago Fremantle’s rating did a similar nose-dive, which its director of city business Glen Dougall described as a “one-off” caused by an accounting change.

This time round Mr Dougall says the bad report card wasn’t unexpected.

“Upon the release of the strong FHI score last year the city made the comment that it was anticipated the FHI result this year would be lower.

“The City of Fremantle is going through a period of change and large-scale public investment, and during this period our FHI will fluctuate.”

Mr Dougall says the website notes that it’s only one factor in assessing overall performance.

“Other factors include the range of services offered, efficiency of services delivered and community satisfaction.” He reckons the council ticks off on all those items.

But the website still notes that an anomaly such as Fremantle’s is something the community should take note of.

“A very high or low FHI may be a prompt for questions to be asked by the community about a local government’s revenue, expenses and service delivery,” the website states.

The latest figures paint the council as having absolutely no ability to fund capital projects after meeting its operational costs, or to meet debts based on available cash.

Mr Dougall said in 2017/18, the council paid off $10 million of loans in one hit to ensure that any additional finance needed for the Kings Square development were manageable. He says the website has misread this as a long-term, unsustainable problem.

“It would be if this was an ongoing occurrence as opposed to a one-off,” he said.

A $1.7 deficit last financial year had also made it look as though there was no additional cash for capital projects.

“The city is in a sound financial position. No audit report has ever highlighted significant financial challenges,” Mr Dougall said.


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