THE controversy surrounding Whitsunday Regional Council's budget black hole centres around the spending of State and Federal Government money on fixing flood damaged roads.
Mayor Jennifer Whitney and CEO Scott Waters called a press conference on Tuesday to discuss the over-spend.
Mr Waters opened the press conference by saying this was about presenting "bare facts".
He said there was no politics involved and that a very complex situation had occurred.
Mr Waters presented figures showing the State Government had approved works to the value of $87.9 million - but the former council had spent $106.7 million.
He said a freeze had been put on all "non-essential expenditure" for the current financial year.
This comes after Cr Whitney announced last week that the former council had over-spent in relation to funds provided under the Natural Disaster Relief and Recovery Arrangements (NDRRA) program administered by the State Government. Mr Waters said the NDRRA program was not meant to be a capital works program - it was meant to just be used to fix flood damaged roads.
He said new kerbs, gutter and channelling were not eligible under the program.
"The program was about common sense and restoration, not full reconstruction or betterment," he said.
"It was not to be utilised as a secondary capital works program."
One example was Doherty Street in Proserpine where more than $490,000 was spent on improvements but the NDRRA funding was only approved for $107,981.
Mr Waters said this was a rural road that needed some work but a full reconstruction was not required and the extra work was not eligible for funding under the NDRRA program.
"What should have been applied was a very simple re-seal," he said.
Mr Waters said Council would now have to pay in cases where over-spends had occurred because of ineligible work being completed.
He said Council was continuing to work with the Queensland Reconstruction Authority and the Queensland Audit Office.
Cr Whitney confirmed again that the over-spend and deficit should not cause an increase in rates in the current financial year and she said she knew ratepayers couldn't afford big increases.
"We need to look at running the organisation more efficiently," she said.
Former mayor Mike Brunker said yesterday Cr Whitney herself had cost council $400,000 by procrastinating over a decision on the main street in Airlie Beach - and come up with the same decision as the former council.
He said councillors were there to make policy decisions and that it was up to the staff to run the jobs.
He said councillors did not get involved in the day to day direction of staff.
"She doesn't understand how it works," he said.
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