Maitland council has an extra $2.5 million to put towards its budget promises after revelations its investments have outperformed expectations.
Subscribe now for unlimited access.
or signup to continue reading
Interest earned on council's extensive portfolio was expected to be $7.7 million for this financial year, but in a surprising windfall it is now $10.3 million.
The interest earned has continued to rise since July last year and council's finance executive manager Mary O'Leary said the money would come in handy as council balances external pressures.
She said the money would help council deliver its projects as well as top up maintenance funds for roads, buildings, footpaths and bridges.
"Given inflationary pressures, this additional income has provided council with funding to invest in the increasing costs associated with councils' infrastructure network maintenance and assist in the delivery of major projects, for example the redevelopment of Harold Gregson Reserve and ongoing improvements being made to the Maitland Resource Recovery Facility," she said.
Ms O'Leary confirmed any additional funds earned next financial year would also be directed towards the priorities in the budget.
The council has 54 per cent of its investments in term deposits, 36 per cent in floating rate notes, 6 per cent in fixed rate bonds and 4 per cent in on call accounts.
It has investments in 18 different institutions including the Commonwealth Bank. National Australia Bank and Suncorp Bank.
Higher interest rates have led to the council's increased income from its investments.
Council's portfolio had a return 5.44 per cent per annum last month, compared with the bank bill index benchmark - the industry standard benchmark for money market products and conservative investors in Australia - return of 4.50 per cent per annum.
"These higher investment returns go some way to meeting escalating project and service delivery costs that are being driven up in the current high inflationary environment and therefore mitigate the risk of service levels having to be reduced," she said.
"Additionally, much of the additional investment return revenue is quarantined in line with the purpose for which the funds have been collected (e.g. developer contributions) and can only be spent on those programs."