LODDON Shire Council has approved a plan to eliminate its share of the local government superannuation shortfall by tapping into its $17.3 million of discretionary reserves.
At Monday night’s meeting the council approved the strategy to pay off the $2.22 million of debt, of which $300,000 will come from an unfunded superannuation liability reserve.
The remaining will come from money put aside for future services in areas such as economic development, land and buildings and information technology.
Loddon Shire chief executive officer John McLinden said it was not a decision the council wanted to make.
“The councillors expressed their disappointment and frustration of having to pay the amount we do,” he said.
“They feel a little bit powerless in this situation. But unfortunately it’s a legal obligation and we have to pay it.”
Mr McLinden said the council believed its plan was the best way of funding the shortfall without affecting the cost of service delivery to the community.
“By doing this we’ve minimised the immediate impact,” he said. “But I’m not sugar-coating this; the reality is it’s a $2 million bill. That’s cash out the door.”
The council expects the money to be returned to discretionary reserves by the end of the 2015-16 financial year.
Mr McLinden said the motion also “kept the door open to borrow for capital work if we need to in the future”.