Explained: why a full-track resurfacing made it into council's draft budget

It's a result of the difficult financial position that the council is in, with the director of Corporate Services and Finance, Aaron Jones, saying it is becoming "increasingly more difficult" to produce a balanced budget.

"This one has been a significant challenge, in response to council's resolution to not proceed with a special rate variation," he said.

"One of the reasons why we went to the community to discuss the special rate variation was to basically respond to the asset maintenance challenges that we are foreseeing.

"To produce a balanced budget in that climate without being able to rely on a special rate variation has introduced new challenges in the sense that we already had gone through the process of reviewing our efficiencies and cost saving measures, and so there was very little left we could make in that space."

Bathurst council's finance department always aims to deliver a budget that's in surplus.

While that has been achieved in the draft budget for 2024-25, which has a surplus of $10,427, Mr Jones said the council's budget is still considered "unsustainable".

"Our costs are still increasing at a rate faster than what our revenue raising capacity is, so there are still ongoing challenges going forward for the council to deliver a balanced budget into the long term," he said.

The biggest contributor to council's current financial predicament is cost shifting, and it's one of several factors that is beyond Bathurst's council's control.

"Cost shifting is probably the most significant, but the other challenge is ... the cost to deliver services is increasing at a rate higher than we have the ability to raise revenue," Mr Jones said.

"With the rate peg being fixed, that prevents us being able to generate additional income through rates, and the council and community have decided they don't want us to increase rates, so we have to look at alternate means or revisit the services we provide."

Bathurst council completed a comprehensive review of the costs to deliver some of its services, including the provision of water, sewerage and waste services.

The review also looked at the ongoing maintenance costs associated with the infrastructure.

A similar review occurs every year as part of the budget process and sees the fees and charges increase to some degree, but the proposed increases for 2024-25 are higher than usual.

The draft budget has been prepared under the assumption of a 15 per cent increase to water rates and charges, a 9.5 per cent increase to sewerage rates and charges, and a 13.5 per cent increase to domestic waste charges.

"That would largely be reflective of the costs of materials that we need to use to not only operate, but maintain the [water and sewerage] networks," Mr Jones said.

"That would be pipes, pumps, access to contractors, such as electricians and the like, to maintain that service."

The water rates and charges increase is significant, and Mr Jones said it is a direct result of the years of drought Bathurst lived through.

The increase is to recoup operating losses incurred during that period, as council's cash reserves for water were severely reduced.

"During the drought period and the period of water restrictions the amount of water consumed was substantially lower and that's a direct reflection of the community responding to the challenges of the time, but that's one of the significant income streams for that water fund," Mr Jones said.

"Whilst we were able to absorb those costs, or that loss of income, at that time, it has had a flow-on effect in relation to the need to maintain our asset infrastructure.

"In the period of drought, we actually cut back a level of preventative maintenance at that time simply because we didn't have the funding.

"Now, obviously, if you don't do preventative maintenance, maintenance comes back to haunt you, and so that's where we've landed at the moment."

Maintenance is the overall theme to the council's budget, with millions of dollars to be allocated to roads in the region.

The list of capital projects also has several seven-figure allocations to Mount Panorama, including $7.65 million for a full track resurfacing.

There's also a $350,000 allocation to replace the tyre wall at turn two, $1.35 million allocated to additional tyre wall renewals, and another $1 million for the Conrod Straight tunnel approaches.

Some in the community might question why the council has these projects on the books for the next financial year, while others, such as upgrades to Centennial Park, are unfunded.

Mr Jones explained that the council will submit grant applications for those four Mount Panorama projects, and the draft budget has been prepared in the hope that money will be forthcoming.

"Those works proceeding are dependent on a grant application," he said.

The last time the Mount Panorama Circuit was completely resurfaced was in 2014, and council received grant funds to carry out the work.

The surface is now showing signs it needs to be replaced.

"The track surface is starting to crack up," Mr Jones said.

"The nature of that surface is that it's supposed to be replaced every 10 years, and we're actually at that time now where the surface is due for its replacement.

"The need for the works associated with the tyre walls, it was identified at our track safety inspections that we need to start giving some attention to those tyre walls.

"Whilst we've been able to retain a track licence, we're wary as to how long that licence would be retained if we didn't do anything."

Council is hopeful of receiving a grant to cover the $10.35 million works, however, if the money is not forthcoming, it will need to find a different revenue stream as those projects are considered a priority.

The draft budget will be up for discussion at a May 1, 2024 extraordinary meeting of the council.

It is expected that the document, among others, will be placed on public exhibition for 28 days, during which time the public can provide feedback.

A report to adopt the final budget will be presented to the June council meeting.