Millions in the bank, but little to spare

Cowra Shire Council may be holding almost $50 million in cash and investments, but its latest financial report reveals just over $1 million is classified as unrestricted funds, highlighting the financial considerations behind managing the shire's services, infrastructure and future projects. The September 2026 Investments and Financial Report, presented at Council's 26 October ordinary meeting, showed the organisation held approximately $48.4 million in combined cash and investments as of 30 September. However, of that amount, $47.354 million was classified as restricted, leaving $1.045 million in unrestricted funds. That means approximately 97.8 per cent of Council's cash and investment holdings were allocated or restricted for particular purposes, with just 2.2 per cent classified as unrestricted. The distinction provides an important insight into Council's financial position, demonstrating that holding substantial reserves does not necessarily mean those funds can be redirected towards any project or operational expense. Restricted funds remain part of Council's financial resources, but their use is subject to particular requirements or allocations, including funding for infrastructure, services and future commitments. The unrestricted balance, meanwhile, represents funds not subject to those restrictions at the reporting date. It is a snapshot of Council's financial position rather than an indication that the organisation has only $1.045 million available to meet all future expenses. According to the report, Council's overall holdings included an investment portfolio valued at $38,270,914, alongside approximately $10.128 million in cash and cash equivalents. While the investment portfolio represents a substantial financial resource, councillors acknowledged that much of the money is already committed to specific purposes. During discussions, Councillor Peter Wright highlighted the importance of Council's investment management, explaining that funds allocated for future expenditure could continue generating returns until they were required. "This money is all allocated, but we don't need it all in one day to be able to pay your bills," Cr Wright said. His comments reflected the role investments play in managing Council's finances, allowing funds to earn interest while awaiting expenditure on their designated purposes. The September report recorded an average interest rate of 5.01 per cent across Council's investment portfolio, with budgeted investment interest income of $1,818,127 for the 2026-27 financial year. The portfolio was also certified as compliant with relevant legislation and Council's investment policy. Cr Wright praised staff for their management of the funds. "I congratulate the staff," he said. However, the report also highlighted the substantial long term financial obligations Council continues to manage alongside its investment holdings. As of 30 September, Council had approximately $15.29 million in remaining loan commitments, including around $10.95 million in outstanding principal and $4.34 million in scheduled future interest. These obligations relate to infrastructure and community facilities, including sewerage, water systems, drainage, roads and waste management. The largest individual loan relates to the sewerage treatment plant, with approximately $8.08 million in remaining principal and interest commitments. Importantly, the $15.29 million does not represent an amount immediately payable, with the report including future interest obligations and repayment schedules extending as far as 2044. Instead, the figures illustrate the ongoing financial commitments associated with maintaining and improving essential infrastructure across the shire. The latest financial snapshot also follows earlier consideration of financial stability within Council's broader risk management arrangements. During the October meeting, councillors also examined the relationship between Council's investment returns and the Reserve Bank of Australia's cash rate. Councillor Erin Watt sought clarification about the narrowing difference between the portfolio's average return and the cash rate, following earlier discussions about investment performance. According to the meeting discussion, that margin had reduced from approximately 1.7 percentage points to around 0.7 percentage points. Council staff explained that movements in the cash rate affected comparisons with investments secured under earlier market conditions. Cr Watt emphasised that questioning the figures was an appropriate part of Council's financial oversight. "It's always reasonable for us to ask and identify why," she said. The discussion reflected the importance of monitoring investment performance and understanding how changing interest rates influence the returns generated from public funds. Alongside its investment and loan commitments, Council's report also recorded outstanding rates. As of September, the rate arrears balance stood at $943,550. While the figure identifies the amount outstanding at that date, it does not establish whether arrears are increasing or whether financial hardship among ratepayers has worsened. During the meeting, Councillor Karren Cave encouraged residents experiencing difficulty with their rates to contact Council staff. "If they ever need help, you know, come forward and see the team," Cr Cave said. Her comments highlighted the importance of communication between Council and residents who may require assistance managing their financial obligations. The September financial report provides a detailed snapshot of the responsibilities involved in managing public money, from maintaining investment returns and meeting loan repayments to ensuring funds remain available for their intended purposes. While Council's investments continue to generate significant income, the figures demonstrate the difference between the total money held across its accounts and the portion classified as available for unrestricted use. With major infrastructure responsibilities and long-term financial commitments continuing, the report highlights the importance of careful financial planning as Cowra Council manages its existing obligations and considers future priorities. For ratepayers, the central distinction is clear: having almost $50 million in cash and investments does not mean Council has almost $50 million available to spend wherever it chooses.