A budget finance report presented by Liverpool Council CFO Vishwa Nadan was reviewed at a Council Governance meeting on Tuesday, revealing significant obstacles in the 2024-25 operating budget. Initially, Council had aimed for an operating surplus of $2.6 million, but recent assessments indicate a concerning shift in financial projections.
The September Budget Review has necessitated a revision, with the net cost of service (NCOS) now anticipated to result in an operating deficit of $4.229 million. This change follows the Council’s decision to retract its plan to sell 3 Hoxton Park Road, which is currently utilised by the Liverpool SES. The sale was projected to yield $14 million in cash and $8.4 million in profit, as outlined in the public report.
Ongoing Budget Review and Financial Impacts
The Council is currently addressing several factors that have adversely affected its financial outlook. Key impacts discussed during today’s meeting include:
- Carparking Fees: A shortfall of $145,000 due to reduced utilisation of the Warren Service Way parking facilities.
- Development Application (DA) Fees: A decline of $430,000, attributed to a decrease in lodged applications.
- Underperforming “Crocodile” Mattress Shredding Recycling Program wiping 1.55M from projections
As a result, the Council is forecasting a NCOS deficit of $5.8 million by June 30, 2025, unless corrective measures are implemented.
In response to these financial challenges, the Council has committed to achieving $5 million in operational savings. These savings are expected to be realised through a hiring freeze for vacant positions and a reduction in operational expenditures, rather than through the sale of assets such as the CT Lewis building in Hill Road, Lurnea.
Council management has identified potential savings strategies, including:
- Savings on Staff Costs: A target of $2.5 million, with $1.2 million already realised.
- Savings on Operational Expenditure: A target of $2.5 million, with an impressive $10.5 million already identified.
While the report did not specify how the $10.5 million in operational savings would be achieved, further details are expected to emerge at the first Liverpool Council meeting for 2025, scheduled for Wednesday, February 5, at 6 PM in Civic Place.
The CEO also highlighted significant risks that may hinder the Council’s ability to meet its targets, particularly ongoing arbitration with the United Services Union concerning lost flex time. This situation could lead to an increased cost of untaken leave, potentially escalating to an additional $3 million.
Ratepayers also received a mention in the report owing a substantial $8.9 million in outstanding rates, it is hoped that they will contribute to alleviating this burden by settling their debts. A recovery effort is now underway to address this pressing issue.
Liverpool Council is navigating considerable financial challenges that require immediate and strategic intervention. The anticipated operating deficit underscores the need for prudent budget management. The forthcoming Council meeting will be pivotal in shaping the next steps and fostering transparency in tackling these urgent matters.
A full copy of the Finance report can be found on Liverpool Councils website or by clicking here
