At its meeting of 24 June 2025 Council resolved that Council:
1. Receives and notes the LGiQ Independent Desktop Review as contained in Attachment A to Item 7.2 on the Agenda for the City Finance and Governance Committee, held on Tuesday 24 June 2025.
2. Requests the Administration to:
2.1. Draft the Lord Mayor's foreword for the pamphlet about the 2025/26 Business Plan and Budget that accompanies the rates notice in July, to correct misleading claims about Council's annual budget process and provide ratepayers with factual information to explain how rates are determined, how these processes fit into our long-term financial plan, and how the legislated oversight mechanisms in place provide assurance to Council and the community that our actions are transparent and reasonable, and
2.2. Publish on the City of Adelaide website, as soon as possible, a public notice identifying and correcting misleading claims about Council's annual budget, along with the report prepared by LGiQ as presented to the City Finance and Governance Committee on 24 June 2025
The notice below is in response to the Council request 2.2:
At its 27 May meeting Council resolved to seek an independent review of recent claims made in the public domain that the City of Adelaide faces:
- a financial crisis
- a budget shortfall of $97.1 million
- long term underfunding of Asset Management Plans
- the need for rate revenue to rise by 27.8%.
Financial consulting firm LGiQ was engaged to undertake a review of the claims made, based on Council documents, financial plans, asset management plans, and staff input. The review concluded:
- Financial Crisis Status: CoA is not in a financial crisis. Key financial indicators remain within target ranges, and debt levels are considered prudent and sustainable. However, ongoing financial risks relating to project cost estimates, grant reliance, and debt exposure require continued monitoring and risk management.
- Budget Shortfall: Funding assumptions for two major capital projects: Adelaide Bridge and Torrens Weir include $41.7 million in external funding which currently remains unsecured. These are currently treated as holding positions in the Long-Term Financial Plan (LTFP), not as an immediate budget shortfall. Council has also chosen to change the renewal of the Rundle UPark from the cost of a full replacement of $60 million to an extension of the asset's useful life costing $15 million.
- Asset Management Funding: Historically, CoA underfunded renewals, with an Asset Renewal Funding Ratio (ARFR) averaging 75.8% over 10 years. Revised Asset Management Plans now forecast higher renewal needs, and the current LTFP projects ARFR gradually increasing to 100% by 2031/32. Renewal programs are actively managed based on asset condition and risk.
- Rate Revenue: The adopted 2025/26 Draft Business Plan includes a general rate revenue increase of 6.9% (comprising 5.6% average increase for existing rate payers, 1.3% from rates on new developments), aligning with financial plan projections. Claims of a required 27.8% increase are not substantiated by current budgets or financial policy, which remain focused on maintaining intergenerational equity.
Council received the report through a presentation by LGiQ at the City Finance and Governance Committee on Tuesday 24 June. A copy of the report is available to download.
