REDLAND City Council’s projected operating deficit has deepened to almost $9 million as rising costs, delayed capital works and growing landfill remediation liabilities continue to weigh on the organisation’s finances.
A new budget review set to go before councillors next week shows council is now forecasting an operating deficit of $8.805 million for the 2025-26 financial year — a worsening of $639,000 from the already revised deficit of $8.167 million adopted in December.
The review comes after nine months of financial performance analysis and project reprioritisation across the organisation.
Council says increased revenue from Queensland Reconstruction Authority funding linked to Ex-Tropical Cyclone Alfred, insurance recoveries, planning and plumbing fees and stronger-than-expected interest earnings helped soften the blow.
However, that additional income was offset by rising expenditure particularly increased costs associated with landfill remediation provisions.
The budget papers reveal council’s materials and services costs have surged by more than $14 million compared to the previous revised budget, while recurrent expenses overall are forecast to hit $442.8 million.
At the same time, council has slashed its capital works delivery program by $25.8 million, largely due to project delays and carryovers now expected to roll into the 2026-27 financial year.
Approximately $23.1 million in projects are expected to be carried forward.
The revised budget also confirms council will no longer draw down on the originally forecast $15.2 million in new borrowings this financial year due to underspending on capital projects.
Under the revised forecasts, total capital expenditure has dropped from $175.6 million to $149.9 million.
Despite the worsening deficit, council says most of its financial sustainability indicators remain within target ranges, with the exception of the Operating Surplus Ratio, which has deteriorated further to negative 2.03 per cent.
Cash reserves remain relatively strong, with unrestricted cash expense cover forecast at 5.64 months — well above council’s minimum target of two months.
The budget review also reveals mixed financial performance across council business units.
City Water is still forecast to record a $15.3 million operating surplus, while City Waste is projected to return a surplus of almost $9.8 million.
Meanwhile, Community and Customer Services is forecast to post a deficit of more than $59 million, while Infrastructure and Operations — including City Water and City Waste — is forecast to operate at a deficit exceeding $106 million once depreciation and internal costs are accounted for.
Council officers say the review reflects ongoing challenges around resources, supply chain constraints and material availability affecting project delivery across the organisation.
Councillors will be asked next week to formally adopt the revised budget as part of council’s second budget review for 2025-26.
