As with its State and Federal counterparts, Local Government has also been significantly affected by the Global Credit Crisis.

Guyra Shire Council’s Finance Officer, Mr Keith Lockyer said, “Markets continue to remain volatile across all sectors and credit markets remain depressed. Council continues to work with legal and financial professionals to unwind from many of the securities Council holds”.

To date Council has been successful in unwinding several Floating Rate Notes (FRN’s) and Collateralised Debt Obligations (CDO’s) at near par and, in the case of Federation, received back the full principle which was previously valued at 4 cents in the dollar.

Council’s management is actively working to find the best solutions for moving forward. Council now manages all investments in-house, holding the majority of its investments in Government guaranteed term deposits, in accordance with a Ministerial directive.

“This is a conservative strategy which will result in a reduction in investment income, but will ensure the safety of our investments” Mr Lockyer said. In the long term it will mean that Council will have to look at alternative means of raising the revenue previously sourced from investment returns.

One of Council’s biggest challenges is to meet the increasing costs associated with our ageing infrastructure. Guyra Shire’s General Manager, Mr David Cushway said, “Maintaining a thousand kilometres of roads and meeting increasing community service expectations with a small rate base, is a huge burden for small Councils such as ours. It is exacerbated in our current climate where there is increasing competition for shrinking pools of financial assistance from State and Federal Governments”.

Council still holds significant reserves for future works, but continues to look at efficiency gains that will improve our bottom line. “Some of Council’s strategies include improving efficiency gains through asset management and service delivery improvements from the Strategic Alliance and also investigating the consolidation of Council operations to achieve benefits from economies of scale” Mr Cushway said.