The Coastal Central Council expects to end this fiscal year, 2020/21, with an operating deficit of $ 103.3 million, which is more than $ 4 million less than expected.
The good news came at the May 25 board meeting, when the third quarter (Q3) review of this year’s budget and operational plan was presented with proposed adjustments.
The adjustments will reduce the adopted budget for the fiscal year from an operating deficit, excluding capital grants and contributions from $ 107.4M, to $ 103.3M and the Q3 operating deficit decreased from $ 60.2M to $ 46.7M.
The operating result to date excluding grants and contributions in capital shows a real surplus of $ 34.3 million compared to a budget deficit of $ 18.5 million, while if we include grants and contributions in capital, it shows a real surplus of $ 71.1 million compared to a budget surplus of $ 11.4 million.
The proposed third quarter capital expenditure budget adjustment is a decrease of $ 7.1M which will result in a revised capital works program for the year 2020/21 of $ 163.2M versus 170 , $ 3M.
The changes highlighted in the third quarter review included an overall reduction of $ 4.2 million in operating revenue budgets.
The Council saw a $ 1 million increase in user fees and charges at recreation centers, swimming pools and vacation parks where usage and occupancy rates continued to exceed budget expectations, but that was offset by other reductions, including in the environmental management bio-certification program. where forecasted revenue will not be received in 2020/21, reduced tipping fee revenue due to reduced tonnages received at waste management facilities and reduced theaters revenue forecast as theaters in the Council have only recently returned to full capacity following the Covid restrictions.
There has been a $ 9.4M increase in capital income budgets.
These included a $ 16.2 million increase in capital grant revenue, largely in infrastructure services for roads, bridges, shared lanes, drainage and traffic development programs. , but these were partially offset by reductions in forecast revenue from non-cash contributions and a $ 3M reduction in developer S64 forecast revenue from contribution.
The Council reduced its operating expenditure budgets by $ 8.3 million.
This included a reallocation of the budget of $ 9.7M for restructuring costs to other income statement lines to mitigate the impact of unplanned and unanticipated impacts such as unfunded costs of storms and storms. floods from February / March 2021, restructuring costs of external loans, reduction of internal cost recovery. such as plant and fleet and failover costs due to the reduction in the capital works program and the non-receipt of bio-certification revenue.
The Board has reduced the costs of materials and contracts and other expenses through continued spending control.
It recorded a $ 1.1M increase in borrowing costs to recognize breakage costs and adjustment of interest budgets due to the prepayment of three sewer loans with a principal value. of $ 15.5 million.
The Board said it continued to focus on reducing expenses, increasing additional income, tracking incoming cash flow, making cash flow forecasts and ensuring more sustainable cash flow preservation. .
“The Board’s business recovery plan is a multifaceted approach to addressing current liquidity issues and introducing structural changes aimed at ensuring the long-term financial sustainability of the Board’s operations,” the report said.
Boards are required to prepare quarterly budget review statements, which provide a summary of the board’s financial position at the end of each quarter.
It is the mechanism by which the community is informed of the Board’s progress against its operational plan and budget, as well as recommended changes and reasons for significant deviations.