The council operating a South Australian town on the cusp of a hydrogen and green-steel boom is in deficit. 

Whyalla City Council is among five councils in the state recently deemed potentially unsustainable from a recent review by the Essential Services Commission of SA (ESCOSA).

The Onkaparinga Council, Clare and Gilberts Valley Council, the Northern Areas Council, and the District Council of Robe have also made the list.

Every year ESCOSA reviews 17 of the state’s 68 councils, offering advice and assisting them with making long-term financial and investment decisions.

Councils with insufficient future planning, poor asset-management plans, and unrealistic or underestimated forecasts of expense growth contribute to their poor classification.

Light at the end of the tunnel

Whyalla City Council has been in deficit for “quite a number of years”, according to chief executive Justin Commons.

“We’re projecting to get back to an operating surplus position within a couple of years, two years to be precise,” he said.

“While we currently are running at a deficit, we are very confident with all the housing developments and the influx of workers and increased population that will increase our revenue projections going forward.”

Whyalla will be home to the state government’s hydrogen jobs plan, with a hydrogen power plant, electrolyser, and storage facility set to be built by the end of 2025.

Premier Peter Malinauskas has signed a deal to sell hydrogen to GFG Alliance at the Whyalla steelworks.(ABC News: Stephanie Richards)

“We’re potentially looking at something like 1,700 additional workers in our city in the next 12 months,” Mr Commons said.

“We are confident that as part of those projects council will secure some additional revenue in the form of sale or lease of land that the hydrogen jobs plan will be situated on, and also increased revenue from that site and other sites for the years to come.

“So we’re very confident that we will be able to turn things around.”

Leadership changes to blame in Robe

The District Council of Robe’s new chief executive, Nat Traeger, has been in the job for two months and said leadership challenges were partially to blame for the council’s status of being potentially unsustainable.

“We have been in a period of turmoil … there’s been some leadership challenges; I’m actually the sixth CEO in 12 months, so there’s been a series of interim CEOs,” Ms Traeger said.

“That has essentially put the council behind for at least 12 months; when you’re changing leadership and just trying to keep the doors open and providing normal services, the first thing that goes is your strategic plans.”

Robe’s obelisk is a popular tourist spot.(ABC South East SA: Josh Brine)

She said asset-management plans had not been endorsed during the unsteady leadership time and were first on the agenda for turning things around.

Tourist numbers also meant assets were well-used and needed more frequent maintenance, she said.

“Robe also has a unique situation where it has more houses than people,” Ms Traeger said.

“We have 313 people Airbnb-ing their homes in Robe, but we have to provide infrastructure for up to 20,000 people visiting.”

An audit and risk committee meeting last week was one of the ways the council had started to tackle its challenges, as well as looking at potential revenue developments.

“We’ve got stocks of land that we could look at opening for potential housing, we’ve got some industrial locations around Robe,” Ms Traeger said.

“We could look at moving some of those industrial areas out of town into that industrial estate and opening more housing to increase revenue-raising capacity.”

Northern Areas Council not surprised by review

The Northern Areas Council is in the state’s Mid North, and its chief executive, Kelly Westell, said the review picked up on shortfalls the council already knew about.

The Northern Areas Council’s offices are based in Jamestown.(ABC North and West: Isabella Carbone)

“The advice sums it up pretty neatly, which is focusing on asset-management plans, making sure we’ve got the robust information, but it also suggests we need to focus more on renewing our assets rather than taking on major projects for new or upgraded infrastructure,” Ms Westell said.

“I think the advice suggests if we want to do anything bright and shining, we’re really going to have to consider the potential impacts that will have.

“It is a struggle for small regional councils; a low ratepayer base, it’s always going to be a struggle.”

The council takes in 2,200 kilometres of unsealed roads, 10 towns, and 300 square kilometres of land which, like for many regional councils, is a lot to manage.