Newcastle council has proposed winding back its capital works expenditure to pre-pandemic levels next financial year as it returns its budget to surplus.
The council endorsed a draft $330 million budget and operational plan for 2021/22 at its ordinary meeting on Tuesday night.
The budget, which will be placed on exhibition later this week, includes a 2.0 per cent rates increase and $1.2 million operating surplus.
The return to surplus will follow a huge deficit this year, predicted to be $22 million as a result of increased spending amid the coronavirus, including a $116 million capital works program.
The council recorded a surplus of almost $12 million in 2019/20 and had been in the black for six consecutive years prior to 2020/21.
The council plans to spend $90.4 million on capital works in 2021/22, with $13.7 million for upgrades to local roads, bridges and footpaths; $9.1 million for parks, playgrounds, sporting and aquatic facilities; $8 million for an organics facility to compost food and green waste; $8.1 million for suburban and city centre renewal at Wallsend, New Lambton and Newcastle East; and $7.7 million on stormwater upgrades.
Labor mayor Nuatali Nelmes said the return to surplus was significant given the council ran a "deliberate structural deficit" this year.
"We're in the middle of our largest works program we've ever undertaken," she said.
"We go back to a very moderate operating surplus, which I think is appropriate."
The effects of the pandemic will hit revenue streams with a dividend from Newcastle Airport expected to be half of what was forecast pre-pandemic and investments set to produce lower returns due to declining interest rates aimed to increase consumer spending.
However, total revenue will rise $7 million to $344.5 million, of which $198.6 million will come from rates and annual charges. Rental income will top $8.5 million.
The 2.0 per cent rate increase is the maximum allowable under the Independent Pricing and Regulatory Tribunal.
The base residential rate, which makes up half of the rate notice, will rise to $809 from $795. The average rate will be $1616, an overall increase of $32.
The domestic waste management service charge will rise to $400 from $375.
Employee costs will rise by about $1million to $117 million in the year. Materials and contracts costs will fall by $10 million to $80 million.
Independent councillors John Church and Kath Elliot were both critical of infrastructure investment.
Cr Church said the 2021/22 infrastructure renewal spend was "only half of what it needed to be". He highlighted spending on roads and cycleways. "We need to get back on top with some of these basics," he said.
"Cycleways, only about $1.5 million allocated. We need to be spending four to five million a year to make any headway on the recently approved cycling strategy."
Deputy lord mayor Declan Clausen (ALP) said the $90.4 million capital works program was "a record for the council, aside from this financial year".
The draft budget was tabled a month earlier this year and will be on exhibition for 28 days from March 26.
Other budget spending highlights include:
- $5 million for transport initiatives, including $1.5m on cycleways;
- $5 million for initiatives to mitigate economic and social impacts of climate change;
- $4 million on the Newcastle Ocean Baths upgrade project;
- $3.3 million towards the Newcastle Art Gallery expansion;
- $2.2 million on Bathers Way works;
- $1.5 million on tree planting.
