According to council, of those reserves, $36 million is ring fenced for water and sewer services.

The operating results delivered surpluses in council's special purpose water and sewer funds at year end, helping council's consolidated accounts to record a surplus of $2.5 million. However, once capital grants and contributions are excluded, council finished the year with an overall operating deficit of $4.4 million.

Council's General Manager Jackie Kruger explained that many of the contributing causes for the deficit were outside Council's direct control, and were mostly 'non-cash items'.

"A change in accounting has required council to catch up 10 years of landfill remediation provisioning in one year, delivering a non cash hit of $2.6 million to the bottom line," Mrs Kruger said.

Other impacts included increased depreciation expenses following a revaluation of council's transport infrastructure network (up $1 million), historically low interest earnings (down $220,000), low water trading income (down $603,000) and reduced contracted works by Transport for NSW (down $500,000).

According to Mrs Kruger, had these items not changes from the previous year, council would have achieved an overall surplus.

Mayor Paul Maytom said that while the overall result was 'not ideal', it could be explained and came as 'no surprise' to councillors who are briefed about the state of council finances each quarter.

"While we can't bury our heads in the sand about the general fund, we also need to keep some perspective," Councillor Maytom said.

"The general fund may be groaning but we have very strong cash reserves and are the envy of many councils."

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Mrs Kruger said that even though the deficit is the result of a series of one-offs, council could not rest on its laurels.

"The reality is that rates capping means we are constantly battling increased costs with insufficient or unreliable revenue for our general operations, exacerbated by state government cost shifting," Mrs Kruger said.

"This vulnerability has been masked in recent years by excellent water trading and investment earnings, but both of these fell in the last financial year in line with the market.

"The new council is going to have to resurrect some of the hard conversations we started in 2016 about whether to reduce services or increase income if we are to achieve long term financial sustainability."

Councillor Maytom said that he was please to have led a progressive council and to see that the Leeton Shire had 'made the most' of the grant funding that has been available in recent years.

"The Shire is looking better than ever and there is more to come. Whether it's the artwork along the Whitton main street or the new transfer station, the splash park in Yanco, the upgrade of the Leeton Showground Grandstand or the Wade Avenue upgrade and new pool in Leeton," Cr Maytom said.

"I feel extremely proud of what has been achieved for the shire."

The general public will have the opportunity to view Leeton Shire Council's 2021/21 audited financial statements ahead of their presentation at the ordinary council meeting on November 24.

The 2020/21 Leeton Shire Council Audited Financial Statements and Auditor's Reports are available on the Council website.

Hard copies will also be available for viewing by the public at the Leeton Shire Council Administration Office, Leeton Library, Yanco Shop and Whitton Post Offices.

Submissions close at 5pm on Wednesday 1 December 2021.

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