Councils across NSW, including Lithgow City Council, are facing financial uncertainty due to an ongoing dispute with the State Government about RFS assets.
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Lithgow City Council has joined councils from across the state in rejecting a determination from the government that NSW Rural Fire Service (RFS) mobile assets are the 'property' of councils.
At the July meeting, Councillors carried a motion to affirm its support to the Local Government NSW (LGNSW) campaign against the 'cost shifting' exercise by writing to the State member, Paul Toole, and other relevant goverment or members of opposition.
A bad deal
Having these RFS assets on the books means that suddenly Council is responsible for the fleet and must weather the depreciation of said assets on their balance sheet.
Lithgow Council General Manager Craig Butler said recognising the red fleet as council assets added $737K to depreciation from the 2021/22 financial year.
"Council will need to constrain its expenditure on critical service delivery by this amount in future years to meet the OLG performance benchmark of a balanced operating result (before capital)," he said.
Lithgow City Council 2021/22 financial statements stated council recognised the RFS Red Fleet assets on June 30 and continues to engage in discussuions about the matter.
'Blatant cost shifting'
"This is the most blatant attempt at cost shifting onto local government ever recorded," said Cr Kevin Beatty, Chair of Central NSW Joint Organisation
"The fact of the matter is that councils play no part in the planning or procuring of red fleet, we have no say in deployment decisions and certainly don't ever get consulted about their disposal. We don't even insure them so it beggars belief that Treasury and the Audit Office expect local councils to account for these assets and take the hit on our financial bottom lines," Cr Beatty said.
"We see this as opening the door to further cost shifting and goodness knows what the liability implications are! This madness has to stop."
Many of the 68 Councils across NSW listed in the Auditor General's 2020/2021 Local Government Report to Parliament for not accounting for the red fleet remain resolute in their objections.
'Ridiculous notion'
LGNSW President Darriea Turley AM said the current NSW Government was overseeing a dramatic increase in the number of councils being hit with qualified audits, after only two were issued in 2021.
And she said the spike in qualified audits comes down to the NSW Government's insistence that council accounts include depreciation costs for Rural Fire Service (RFS) assets.
"It is a ridiculous notion that councils are responsible for RFS assets. In most instances we don't even normally know when a new fire truck arrives in town until we see a photo of the Minister and the local fire service in the media," Cr Turley said.
"But despite this, the NSW Government continues to dig its heels in on the issue and heap more financial uncertainty on the local government sector at a time when councils facing unprecedented natural disasters can least afford it.
"A qualified audit report can have serious financial repercussions for councils, limiting their ability to obtain loans and grants. This comes at a time when many are struggling with rising costs and a repair bill in the millions due to recent extreme weather events.
"The bullying of councils by the NSW Government needs to end. The government needs to do the right thing and take back control of the RFS assets."