A REVIEW of the council's budget has had some changes with the forecasts for the 2019 to 2020 financial year being impacted by COVID-19.
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Tamworth Regional Council (TRC) expects the impact of the pandemic to be two-fold.
First, its income will decline and second the cash flow will be affected.
The budget review predicts the council will raise $69 million in income from rates and charges, but it is expected that the pressures of COVID-19 will make it difficult for many to pay the rate instalments by the due date.
The material changes to the cash flow are extremely obvious and quite high, TRC councillor Glenn Inglis said.
"We know the reasons for that and it's interesting isn't it?" he said.
"I tried to remember the last time I read reports where you're talking about such decreases in cash flows supported by a deferral of capital works.
"You don't see that very often do you?"
Mayor Col Murray agreed, noting that the outbreak of COVID-19 had put the council in "extraordinary circumstances".
To alleviate the situation, the council has cut back on its spending by reducing non-essential recruitment of vacant jobs, focusing on already funded projects or those projects that are being funded by external sources.
It will also delay any spending on asset renewal where possible and has redeployed staff impacted by COVID-19 to other areas and restricted overtime to essential works only.
Just like other businesses, the council has fixed costs like loan repayments, insurance, security and staff levels.
A report to the council on Tuesday argued the council needs to be mindful of where it spends its money.
The general fund is in the red by $2.9 million when the projected deficit for the financial year was only expected to be $1.7 million, so the council will be unable to fully fund asset renewals or commit to increasing its services.
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The biggest hits to the budget had been in areas where council services involve travel, entertainment and recreational activities.
The income in those areas is expected to be reduced by $2.6 million, offset by the reduced operational expenditure of $1 million through staff and and overtime and another $1 million by delaying capital expenditure.
Those capital expenditures will need to be carried out on a future date in most cases, but for now it's providing a temporary cash flow.
Madeline Link
Madeline Link is a journalist at the Newcastle Herald, with a focus on Lake Macquarie City Council. To keep up with my stories, follow my Twitter @madeline_link, for tips email madeline.link@newcastleherald.com.au.
Madeline Link is a journalist at the Newcastle Herald, with a focus on Lake Macquarie City Council. To keep up with my stories, follow my Twitter @madeline_link, for tips email madeline.link@newcastleherald.com.au.
