Dalby Town Council achieved debt free status four months ahead of target when, on 31 August 1999, Council paid off its last loan.
“A decision was made in 1985 to aim to be debt free by 2000,” said Jeff Brown, Manager of Administration and Finance.
As the result of substantial infrastructure spending in the early 1960s, largely sewerage system installation and improvements to water supply, Council had a considerable debt burden.
“Council had taken out 40 year loans, which converted after 20 years to contemporary interest rates,” Jeff Brown said.
“This meant that, in the early to mid 1980s, Council was facing interest rate increases from the original five percent to 17-19.5 percent.
“That placed a huge financial burden on Council, forcing it put off other major works because it could not afford them.”
Council looked at alternatives for funding general operations.
It had been financing all activities with loans and around 54 percent of rates were going into interest payments.
Council wanted to reduce this ratio.
It decided to fund capital works in a different way. Council resolved to add an additional two percent to rates to spend on capital works.
Over the ensuring years, with general rate increases, this two percent levy contributed more to the funding of capital works.
“Eventually Council stopped borrowing for everything of a works nature,” Jeff Brown said.
“These funds are expected to come from general rates now.”
In the early 1990s Queensland Treasury Corporation took over Council’s loan portfolio and restructured the 300 loans to enable Council to realise debt free status by 2000.
For further information contact Jeff Brown, telephone (07) 4660 6125.
