COVID still taking toll on Lake Macquarie and Newcastle council budgets

Lake Macquarie council reported a projecting operating loss of $8.58 million in its December update, which was $1.33 million unfavourable to the current budget. In Newcastle, the council's budget variations had a net unfavorable impact of $1.9 million on its operating position and an annual budget deficit of $13.6 million was forecast for the year ending June 30.

Lake Macquarie council acting chief financial officer Jo Roberts said the position was "largely as a result of COVID-19, with reduced revenue resulting from lockdowns and reopening requirements, as well as increases in precinct maintenance and reducing the backlog of tree maintenance requests".

The Lake projected budget cash position was also a deficit of $0.6 million against a previous deficit of $0.4 million. Ms Roberts said if this deficit remained at the end of the financial year, a recommendation to fund this shortfall would be made in the June review.

The projected capital spend has increased by $11 million to $116.5 million largely due to the acceleration of various projects. At the end of December, 95 per cent of actions in the budget were either on track or achieved.

For Newcastle, a report said council was delivering its Community and Economic Resilience Package 2.0 and boosted works program while receiving revenue $1.4 million lower than anticipated. Adjustments recommended through the review require council to use $4.4 million less funds than previously predicted. "[Council] is now forecasting to use $12.5 million in cash reserves for the full financial year 2021/22 but is forecast to maintain $23.5 million in unrestricted cash reserves at 30 June 2022," the report said.

The 2021/22 works program was reviewed as part of the review and scheduling changes were made to projects, which will result in an increase in the total cost of the works program of $0.4 million to $105.1 million.