Whyalla, Onkaparinga, Clare and Gilbert Valleys, Robe and Northern Areas councils have been advised their current and projected financial performance is potentially unsustainable.

This advice was given by the Essential Services Commission of SA (ESCOSA) and is part of a mandatory four-year scheme introduced during the Marshall Government’s 2021 local government reforms as a compromise to rate-capping.

The scheme has been rolled out in stages, with 32 of 68 councils receiving their current and future financial sustainability advice last year.

In February, 17 more councils were given their advice, with ESCOSA finding while most councils are financially sustainable, many have risks to their long-term financial health.

One of the key reasons for this is councils are often not spending enough on their asset renewals, which leads to increased costs for future renewals, repairs and maintenance.

Both the City of Whyalla and the City of Onkaparinga are not meeting their asset renewal needs, according to ESCOSA.

The City of Onkaparinga’s value of assets held in 2022-2023 is $2.52 billion, and one of the risks the ESCOSA findings outlined include “maintaining and holding assets which are excess to requirements and do not provide benefit to the broader community”.

City of Onkaparinga CEO Phu Nguyen – who has held the position since July 2023 – said he was hired with “a mandate to achieve tangible improvements in the council’s financial position”.

“As we focus on budget repair, we are aiming to diversify revenue opportunities and look at ways to reduce expenditure while still maintaining essential services to the community,” he said.

Whyalla Regional Airport was upgraded by Katanoo in 2022. Photo: David Sievers

A risk to the City of Whyalla’s sustainability is the airport, which is not recovering costs and has been operating in a deficit of $2.8 million over the last five years.

Whyalla City Council CEO Justin Commons said this should not be a surprise to ratepayers.

“We have been open with the community that we are currently operating in a deficit, as well as highlighting the challenges we face with our airport; existing asset base and need to develop while being reliant on external funding,” he said.

Commons said the “potentially unsustainable” status means they’re still in a position to develop a financially sustainable budget in the coming years.

Both Whyalla and Onkaparinga councils said they will use the ESCOSA report to inform their decision-making in upcoming business plans and budgets.

Geoff Brock after being sworn into Jay Weatherill’s cabinet at Government House in 2014. Photo: Ben Macmahon / AAP

Local Government Minister Geoff Brock said if councils are not managed financially sustainably and the ESCOSA advice is ignored, “ultimately it is ratepayers who suffer through increased rates and reduced services”.

Brock said while it is the council’s responsibility to take on board the advice, he encourages South Australians to get involved to make it clear what services they want from their council and the level of rates they’re prepared to pay for them.