Roads and Maritime Services will not reimburse Upper Lachlan Shire Council for emergency and restoration works, leaving a budget shortfall of $416,000 in 2018/19.
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The council has lodged repeated payment claims for repair works on roads damaged by severe storms and flooding in July 2016, according to the October business papers.
RMS notified the council that a claim for $39,000 for works completed in 2017/18, including labour and internal plant hire, would not be reimbursed. Further, works totalling $416,000 completed between February and May this year would also not be paid.
Correspondence to the council said there were ineligible items included in the payment claim, including plant hire and day labour.
In 2016, the Upper Lachlan Shire was declared a natural disaster-affected area and allocated restoration funding subject to the Natural Disaster Relief and Recovery Arrangements guideline (NDRAA).
The damage of works was $2.02 million for local roads and $71,000 for regional roads. Last financial year, the council carried over an outstanding works total of $1.14 million.
The council stopped all disaster recovery efforts in May believing RMS would not pay any further works. However, the council had already spent about $850,000 on works.
The council is expected to receive part of the payment claim, but has forecast a shortfall of $416,000.
ULSC acting general manager Andrew Croke said the deficit would have no impact on operational works this financial year.
"The non-reimbursable items adversely impacted the 2018/19 operational result," he said.
"The impact of the non-reimbursable items from the natural disaster works will not impact the 2019/20 budget."
It was during that time the council staff realignment commenced, which caused disruption to works being completed prior to the NDRAA deadline of June 30, 2019.
Upper Lachlan Shire Council says it has negotiated to use internal resources during and after any future natural disaster events to safeguard against such a shortfall happening again.