The City of Ballarat will face a cash shortfall of more than $15 million compared to its original budget, the latest figures suggest.
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A report for the past financial quarter, which is on the agenda for next week's council meeting, outlines the immediate impact of the COVID-19 crisis, as well as the longer term effect for the entire financial year.
It predicts a reduction of $5.5million in income due to lost fees and charges that would otherwise have been gained through council services. It also forecast the overall economic impact of the pandemic on council this financial year would amount to a $15.111 million slump in cash levels.
It follows a warning from the City of Ballarat CEO Justine Linley that it would take a decade for the council to recover its financial position at the beginning of the year.
The shutdown of services across the council area has included the Ballarat Aquatic and Leisure Centre (BALC), art gallery and libraries. In the normal course of a year, these would recover at least part of their staffing and operational costs through fees.
According to the council's 2019/20 budget, charges from BALC alone were forecast at $5.65million for the financial year.
The agenda report suggests the City of Ballarat is anticipating losing six month of income from its fees and charges.
Parking charges have also been lifted since stricter social distancing measures were introduced in March.
The report to councillors, authored by the Director of Business Services Glenn Kallio, suggests the collection of council rates will also suffer as the economic downturn hits local residents.
It reads:
It is expected that Council's cash flow position will face the additional pressure of the community's ability to pay their rates, with businesses closing and job losses
- City of Ballarat quarterly financial report
Rates and charges account for more than half of the City of Ballarat's total income. According to the budget passed by council last June, $122.78 million was due to be gathered by all types of rates and fees in budget totalling $222.5m.
Depreciation was also predicted to exceed budget by $6.483million as a result of revaluations, although this would have "no impact" on council's financial viability according to the report.
Meanwhile, the state government has pushed the deadline for council budgets covering the next financial year until the end of August, a two-month extension.
Normally draft budgets are released for public feedback in late autumn, then put to a councillor vote before the close of the financial year at the end of June.
The minister for local government Adem Somyurek said it was a "small change" to help councils decide how to adapt their budgets to support communities "in unprecedented times" .
The City of Ballarat was one of the first regional councils to shut down most of its non-essential, customer-facing services, a course of action The Courier understands was taken at such speed due to the small number of ICU beds available in the city.
According to the ABC, Ballarat Health Services has just 13 critical care beds, with the capacity to receive only seven "ICU-equivalent: patients. The same number is also mentioned in recent job descriptions issued by BHS.
The council brought in the service closures a full week before so-called Stage 3 restrictions were imposed by the state government, which limited gatherings to two people and introduced on-the-spot fines for people caught flouting those conditions.
Victoria's declared state of emergency has been extended at least until May 11. The Stage 3 restrictions are not tied to the state of emergency but are expected to remain in place for the time being.
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