BBC queries ESCOSA’s ‘unsustainable’ ranking

BERRI Barmera Council is questioning a recent Essential Services Commission of South Australia (ESCOSA) report that has deemed the district as “unsustainable”.

Berri Barmera councillors at the March general meeting adopted a motion for CEO Tim Pfeiffer to write to ESCOSA to query an ‘unsustainable’ rating that was applied to the district in February, as advice handed down by the regulator also highlighted the council’s new strategic approach “will support the (a) return to a sustainable operating performance and effective asset management” by year eight of the 10-year forecast period.

ESCOSA’s Berri Barmera report found council’s past and current financial performance unsustainable due to operating deficits and poor asset management in the past.

“Its projected financial performance remains unsustainable, due to the forecast average operating deficits and the risks associated with achieving an operating surplus before the end of the forecast period,” it read.

“The return to surplus within the forecast period is dependent upon the council increasing rates significantly above forecast inflation, catching up with outstanding asset renewal, rigorous implementation of its improved financial and asset plans with the refocus on asset renewal and replacement, and its ability to contain growth in expenses to below CPI.”

However, the report also stated if current momentum created since 2023 by the management team and elected members is maintained, the council will be able to “achieve its goals to become financially sustainable and meet the community’s needs”.

“(Berri Barmera Council) has developed a new strategic approach to its financial and asset management that, in the commission’s view, will support the council’s return to a sustainable operating performance and effective asset management,” the report stated.

“The commission commends the work that the council is doing to improve its financial and asset management.”

A report on the matter in council’s March agenda said, as “ESCOSA still labels council’s financial performance over the coming 10 years as ‘unsustainable’… it is reasonable for council to consider questioning (the ranking)”.

“If council is forecast to become sustainable by year eight, and if ESCOSA states that this is credible, then describing the full 10-year period as unsustainable feels inconsistent with their own findings,” the report said.

“This is not a criticism of ESCOSA’s intentions, but rather a factual observation that the language used does not fully match the forecast outcome.

“Nevertheless, the report strongly validates the reforms council has implemented and provides clear guidance for continuing the path toward full sustainability.”

Council ESCOSA reports were given on neighbouring councils, Renmark Paringa and Loxton Waikerie, last year.

The aim of the ESOCSA advice is to provide independent, risk-based advice to assist councils when making long-term financial and investment decisions for the benefit of ratepayers.