An extensive review of the 2020/21 budget by senior management has resulted in a net improvement to Council’s General Fund result of $2.1 million.
A second quarter (Q2) budget review presented at the Council meeting on Wednesday has a consistent theme of robust and disciplined budget management. After accounting for carry forward items from the prior financial year, the quarter one revised 2020/21 budget forecasted a consolidated operating deficit of $22k. The Q2 budget review forecasts an improvement to the consolidated operating result of a $2.1m surplus.
The General Fund which accounts for a large portion of revenue collected by rates and user charges has been the focus of the extensive review. An improvement in the operating result from an $805K operating surplus as at the Q1 budget review to a $2.9m operating surplus is forecast, providing a net improvement to the General Fund operating result of $2.1 million.
A contributing factor to the operating surplus is the recognition of grant funding of $693,609 relating to the Local Roads and Community Infrastructure program (Round 2) and an improved forecast for landfill revenues. Budget savings were identified due to event cancellations because of COVID-19, reduced staff resourcing availability to deliver programmed works, review of subscriptions, review of consultancy work, review of unnecessary ‘adhoc’ expenditure and reviewing operational priorities.
Armidale Regional Council General Manager James Roncon said the Q2 budget review was a step in the right direction.
“The organisation needs continued and sustained discipline and a focus on core services over the next two years to climb out of the financial stress currently being felt by Council.
I would like to thank Council staff for their commitment to financial discipline. There is still a long road ahead but services are continually being reviewed to ensure value for money whilst delivering the best outcomes for the community.”
Reduced revenue has impacted the budget due to the effects of COVID-19 in the areas of airport revenue, a decrease in lease income, changes in staff, a hold on recruitment and the deferred opening of the new landfill due to improve recycling initiatives. The 2020/21 capital works program was $42million. The second quarter budget review decreased this to $39m through a revised forecasted works for the remainder of the Financial Year.