Victoria’s second wave of COVID-19 is set to have a significant impact on the City of Greater Geelong’s 2020-21 financial result.
A report presented to the Council during Tuesday night’s meeting provided an update for the first quarter of the financial year, covering the period 1 July to 30 September 2020.
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.
This is $8.8 million more than the $24.6 million deficit forecast when the budget was adopted by the Council on 30 June.
The report notes that the change in outlook is largely driven by additional COVID-19 community and business support packages agreed by the Council, as well as revenue lost due to the forced closure of leisure facilities during the second wave.
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,” Mayor Asher said.
“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 strong 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,” Mayor 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.
So far in 2020-21, the City has secured:
- $8 million from the Victorian Government under the Working for Victoria fund to employ just under 200 full-time staff;
- $500,000 from the Victorian Government to support outdoor dining initiatives; and
- $2.1 million from the Australian Government to fund shovel ready road and local infrastructure projects.
Projects funded under the latter two grants streams will be delivered throughout the course of the financial year.
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,” Cr Aitken 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.”
The City’s initial 2020-21 forecast deficit was heavily influenced by early COVID-19 impacts plus the receipt of an $11.85 million Commonwealth Government Financial Assistance Grant late in the 2019-20 financial year, instead of the forecast 2020-21 financial year.