Council report warns fuel price pain
will force service cuts

EXCLUSIVE

By DANIEL CLARKE

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Kangaroo Island Council will be forced to cut services due to rising fuel prices that are expected to burn a $200,000 hole in its budget, Mayor Michael Pengilly has told Island Independent.

 

A report tabled at this week’s Council meeting by Acting Chief Executive Roy Jones warns closer scrutiny of operational expenditure, deferral of non-essential spending and tighter approval processes were needed in the face of world diesel prices skyrocketing because of the war in the Middle East.

 

The report lays out the risks and challenges that the organisation faces “for continued uncertainty and sustained cost pressure” that it said would last up to 12 months, even if global conditions stablise in the short-term. 

 

“It is expected that flow on from these cost pressures will drive replacement costs, valuations, and impact council infrastructure management in the future,” the report says. 

 

“Council must aim to reduce its debt…and consider revisiting service levels and community expectations in the future.”

 

Mayor Pengilly said the extra $200,000 in fuel costs would place heavy pressure on an already strained Council budget and warned it could get worse. 

 

“That extra money is having to be factored into the budget over and above what we normally use so something else is going to have to be put on the backburner to cover that,” Mayor Pengilly said. “There’s a fear that within a couple of weeks the fuel price is going to go completely through the roof as well.

 

“We’re a big user of fuel because we’ve got 1300 kilometres of roads to cover, our graders are going regularly as well as all the trucks and utes. It's just a very high usage industry so that makes it pretty hard. But it's very hard to cut back on it because we can’t have roads that are impassable.

 

“It’s a service industry that we’re in but the community may well have to accept service level cuts to get through – that’s all we can do.”

 

He suggested street sweeping in townships would likely be the first service cut, while a series of remote roads could be closed for local use only.

 

“It’s nice to have pretty and tidy streets but if we can’t afford it that’s something that has got to go. Some dirt roads may have to drop back to one grade a year instead of two or two and a half.”

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​Mr Jones’ report also states that Council works are being grouped geographically to minisise travel and non-critical activities are being rescheduled to reduce plant movement. 

 

“Cross-skilling initiatives are being undertaken to enable staff to work across multiple service areas, improving flexibility and reducing reliance on contractors or overtime,” the report says. 

 

Mayor Pengilly said it was important the community understood the pressure higher fuel prices were having on Council’s operations. 

 

“We’re doing the community’s work but this has to keep going for everybody – there’s no turning around on it. We need to tell them the truth and they understand that the money is not there. As long as they know.”

 

KI is not alone in feeling the impact, with Mount Barker District Council this week saying its fuel-related costs are expected to add between $40,000 and $50,000 each month to its budget which will likely delay infrastructure work. 

 

In the coming weeks Island Independent will be reporting on KI Council’s overall budget position and rate rise predictions for the coming year.