THE second wave of coronavirus in Victoria will hit the City of Greater Geelong’s financial result for 2020-2021 harder than expected, despite better-than-forecast figures over the previous quarter.
Councillors received a report at their meeting on Tuesday last week with an update for the period covering July 1 to September 30.
It showed the City has so far recorded an operating deficit of $1.4 million, well ahead of the $4.6 million deficit forecast to this stage of the year.
However, an updated forecast for the full 2020-21 financial year predicts the City will now return an operating deficit of $33.4 million – $8.8 million more than the $24.6 million deficit forecast when the budget was adopted by the council in June.
The report notes the change in outlook is largely driven by the council’s extra COVID-19 community and business support packages, as well as revenue lost due to the forced closure of leisure facilities during the second wave.
Geelong mayor Stephanie Asher said the higher deficit figure had not been completely unexpected.
“The pandemic has impacted the entire community, and the council has not been spared.
“Interestingly, when our CEO Martin Cutter and I were first discussing the idea of going into deficit in March, he noted that if the COVID situation continued for six months or more we would likely be looking at an impact in excess of $30 million. So his insight was incredibly accurate.”
The 2020-21 budget has a strategic focus on infrastructure investment and COVID-19 business and community support.
It includes the city’s largest ever capital works program, forecast at $160.1 million, designed to deliver essential community facilities and stimulate local jobs and spending during construction.
The quarterly financial update notes that $25.5 million has so far been spent on capital works.
“The deficit is partly outside of our control given the forced closure of our facilities, however it’s also been a conscious decision to invest heavily in support measures, community facilities and services to help our community recover from the pandemic,” Cr Asher said.
The update also reports that the City has been actively seeking state and federal government grants to assist the Greater Geelong community’s recovery from the COVID-19 pandemic and has secured more than $10 million so far in 2020-21.
The council’s finance portfolio holder, Cr Anthony Aitken, said the government grants were a positive from the report.
“We have secured a combined $10.6 million from the Victorian and Federal Governments to employ nearly 200 new staff, support outdoor dining initiatives and fund road and local infrastructure projects,” he said.
“We thank them for their support.
“However, the COVID-19 pandemic has significantly impacted all tiers of governments and the City of Greater Geelong isn’t immune.
“The Council will continue to monitor the impacts to our financial position.”