General News
19 October, 2022
Councillors vote to change quarry dividend
MOYNE Shire council will look to increase revenue after adopting a new policy on how dividend income will be collected from Mortlake’s Mount Shadwell Quarry.
MOYNE Shire council will look to increase revenue after adopting a new policy on how dividend income will be collected from Mortlake’s Mount Shadwell Quarry.
The previous dividend directed 28.6 per cent of gross sales to council as quarry owner.
The dividend had returned an average of $586,000 per annum to council, and an average return to the quarry reserve of $632,000 per annum over the previous five years.
Councillors unanimously voted at the October Ordinary Council Meeting to instead collect 50 per cent of gross profit after a recent internal audit recommended the change.
The report before council highlighted returns would be similar under the new dividend, but could also provide a larger return when gross profit is higher.
The change was retroactively applied from July 1 from this year.
The item was moved by Cr Jim Doukas, and seconded by Cr Damian Gleeson.
Cr Doukas said the changes were a “long time coming”.
“We’ve heard from a lot of people and I think the general consensus is that it’s a better move than what we’ve got in place at the moment,” he said.
“What I see out of it is when things are really good, both the quarry and the shire share in the profits.
“When things aren’t that good, we both share in a lesser income – whereas before council always had the upper hand.”
Cr Doukas said he, along with Cr Smith as members of the reference committee, would “keep a tight rein on how the quarry operates”.
“We will do our best to increase sales as best we can,” he said.
Cr Gleeson said he was happy to support the position on recommendation.
“Not being an accountant, I like to look at things and ask questions but we keep saying in our finance report what a great position we’re in and what a great job our finance team is doing,” he said.
“To me, it’s just a matter of supporting them.
“They’ve had discussions with the quarry, they tell us it’s the right way to go and I’m very confident in that.”
The report noted the quarry was a successful enterprise, with approximately 225 active clients and external sales of $1 million in the 2020/2021 financial year.
Cr Gleeson sought clarification the quarry would remain in a financial position to support equipment upgrades and maintenance.
Directory of community and corporate services David Rae said the modelling showed “sufficient reserve funds there to ensure the sustainable operations of the quarry”.
“Particularly in regards to reinvestment in plant and equipment,” he said.
“There is a slight material change but at the end of the day it’s council’s policy that can be changed at a future point in time if needed.
“These funds, despite the notion around a dividend and its purpose, do remain funds of council.
“I’m quite confident in the foreseeable future there is no adverse impact.”
Cr Ian Smith said the change would provide “some security moving forward”.
“Projection of costings and plant renewal out to 2031 gives quite a length of security,” he said.
“(If) a plant or crusher and one of the loaders blew up at the same time, there’s still enough security in the reserves.
“It gives the quarry security, and it also gives the council security of dividend income.”
The motion was passed unanimously.