Newcastle council posts deficit as staff costs rise, airport, waste income falls

DEFICIT: Newcastle council says COVID-19 tipped its finances into the red in 2019-20.

NEWCASTLE council says COVID-19 has delivered an almost $10 million hit to the city's bottom line, pushing its finances into the red for the first time in seven years.

City of Newcastle said on Wednesday that it had posted a $3.6 million deficit in 2019-20 after the pandemic delivered a $5 million cut in user charges and a $2.9 million fall in interest revenue.

The council's acting chief executive, Ken Liddell, said COVID-19 had added another $2 million in expenditure, bringing the pandemic's total impact to $9.9 million.

City of Newcastle's annual financial statement, which is now on public exhibition, shows the council raised $13 million more than last year in rates income but its expenses rose $9 million, due in part to an almost $5 million increase in employee costs.

Income from user charges dropped $16 million, from $90 million in 2018-19 to $74 million, mainly due to $4 million revenue falls at Newcastle Airport and Summerhill tip and $3 million at Stockton holiday park. Parking fees were down $1.3 million.

In June, the council passed a 2020-21 budget which includes a $22.7 million deficit and a record $116 million capital works spend aimed at stimulating the economy.

Mr Liddell said the city had $22.6 million in unrestricted reserves and its financial statements demonstrated its capacity to respond to unforeseen events.

"[We] are in a position to deliver a stimulus budget for 2020-21 from existing reserves without borrowing money," he said.

Local Government Minister Shelley Hancock indicated on Wednesday that she would suspend Central Coast Council after it admitted it was broke and received a $6.2 million state bailout.

CCC forecasts an $89 million deficit in 2019-20.

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