Shire of Coolgardie to cut services, cancel projects and likely raise rates to reduce $6m budget deficit

Services will be cut, projects postponed and cancelled, and rates likely increased in coming years as the Shire of Coolgardie attempts to dig itself out of its more than $6 million budget deficit hole. And shire president Malcolm Cullen says he and his fellow councillors need to take responsibility for the situation and be part of the decision-making process to ensure a sustainable future for the shire. Cr Cullen and his fellow elected members were presented at last week’s meeting with the confronting reality that the shire’s 2024-25 budget closing deficit would not be $627,000 as initially forecast but almost $6.64 million — a blowout of more than $6m. The budget deficit review report presented by acting chief executive Aaron Cook, who assumed the role when the council suspended CEO James Trail last November, also noted the operating deficit was not $1.882m but actually $6.558m — “an unfavourable movement of $4,676,410”. Mr Cook said the shire’s financial situation “is unsustainable and requires urgent review, attention and action”. In statement to the Kalgoorlie Miner, Cr Cullen said services would be cut and projects postponed or cancelled. These included the annual verge waste collection, which had been cancelled, while many minor projects and purchases had needed to be reconsidered and cancelled. “All large-scale projects including some road works have been deferred as they are unable to be funded currently,” he said. “Costs allocated in the budget for maintenance in recreation areas have been put on hold, resulting in cost savings of $716,734, while an allocation of $300,000 for footpath maintenance was used to offset the $487,187 unbudgeted costs for the renewal of footpaths in both Coolgardie and Kambalda.” The operating hours of the Kambalda waste facility had also been reduced to four days a week, Thursday to Sunday. Cr Cullen said the only revenue area the council had direct control over was the raising of rates. “As such, this course of action will need to be seriously considered as part of the plan forward,” he said. “The shire is not currently in a position to comment on what rate increase council will need to consider, as the 2025-26 budget has not been finalised.” A major reason for the budget blowout was the Bluebush Village workers accommodation facility in Kambalda, which the shire built in 2022 with the intention of creating a new source of revenue. The nickel mining industry in the shire has since collapsed — a situation replicated across the State because of low global prices for the commodity — with operator Wyloo putting Kambalda’s nickel mines into care and maintenance last May. Mr Cook’s report said a budget adjustment of $3,004,999 was needed because of reduced rental from lower occupancy levels at the village, while there was also $548,000 in additional management and maintenance costs, and an extra $250,000 for provision of electricity and water — $3.8m in total. Cr Cullen said the difference in actual occupation of the village versus the shire’s expectations was driven by the market conditions and volatility of the mining sector. “The shire also refinanced significant borrowings, altering the cost of running the facility,” he said. “Council will examine the fees and charges currently in place for the camp as part of the plan forward.” Another area of concern Mr Cook identified was overspending on consultants and legal fees — to the tune of $380,000 and $220,000, respectively. Cr Cullen said many consultants had been stood down, with work to cease soon. “As the organisation progresses, the role of consultants in the shire’s operations will be thoroughly considered,” he said. Mr Cook’s report said the shire’s total borrowings at the end of January were $22.043m because of major transactions that had occurred — these being Bluebush Village, the Coolgardie refuse site and the Coolgardie wastewater site. “However, additional debt has been incurred through the facilitation of capital leases for the Bluebush Village and heavy plant for the Coolgardie waste facility to the amount of $2.948m as at the end of January,” he said. Cr Cullen said the shire had loans with Commonwealth Bank and ANZ, but the ANZ loan was being refinanced to the CBA, with a settlement date being April 28. “The refinancing of the CBA loans in January 2025 had a positive impact on the forecast closing position at June 30, 2025,” he said. “The further loan refinancing will increase the cash flow capacity of the shire significantly over the coming budgets. “Council is also coming to the closure of significant capital leases, the finalisation of which will free up additional cash flow for the shire.” Mr Cook’s report said while most local governments had significant cash reserves to cover unforeseen issues, this was not the case for the Shire of Coolgardie as these funds had been used several years ago for other matters and projects. Cr Cullen said the cash reserves had been used for a range of projects and to reduce debt for major asset acquisitions. “The rebuilding of the cash reserves will need to occur over time as council returns to budget surpluses in the future,” he said. Cr Cullen said the shire’s predicament was “unfortunate”. “Myself and the elected members need to take responsibility for this occurrence and be part of the decision-making process to ensure a sustainable future,” he said. “Council has accepted this responsibility and is now actively working with the acting chief executive officer to make significant changes. “Council is ready to make the difficult decisions that need to be made to bring back financial sustainability.”