Lake Macquarie Council's projected cash budget has dipped back into the red due to the impacts of the recent COVID lockdown.
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The September quarterly review of the Operational Plan and Budget 2021-2022 was approved at Monday's council meeting, which included a $400,000 projected cash deficit against a previously balanced budget.
Council's chief financial officer Dwight Graham said in the report the projected operating loss before capital items of $7.25 million was $80,000 unfavourable to the original budget including items carried forward.
"This variance is largely as a result of COVID-19, with reduced revenue and increased costs resulting from lockdowns and reopening requirements," he said.
"Council continues to look for every opportunity to improve the financial result and offset the financial impacts of COVID-19. Without this work, the projected result would have been worse."
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Councillor Jason Pauling asked if significant compromises had to be made to offset the projected loss, to which Mr Graham responded that there had been "belt tightening" right across council.
"The impacts we've felt so far are around $1.2 million," he said. "Some of that's timing, some of that's permanent, until the year pans out we won't know for sure."
"But there's just been little bits [tightened] right across council... still delivering that same level of service but finding a way to take a little bit of that cost out."
Mr Graham also wrote in the report that with COVID restrictions easing, an improvement was expected, but the changing nature of COVID made that difficult to accurately predict.
"If this deficit remains at year end, it will be recommended that the deficit be funded by a reduced transfer to the asset replacement reserve," he said.
"While council can cope in the short-term with this one-off impact, continued short-funding of this reserve will see it unable to fund future asset replacement programs and may restrain future funding of new capital and replacement capital as the asset replacement reserve is replenished."
At the end of the first quarter of the budget, 91 per cent of actions were either on track or achieved, meaning 269 actions were projected to be ticked off this financial year and 27 actions were not.
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