Tough decision to curb budget deficit
In response to short term and long term financial pressures The City of Newcastle’s General Manager, PHIL PEARCE, is implementing immediate measures to curb organisational expenses.
The draft financial result for the first quarter of the 2012-13 financial year indicates a deficit of $3 million in the operating budget and the General Manager says he is not going to allow this deficit to continue.
“There are a couple of levers I can pull in the short term which revolve around the employment of new staff and the replacement of staff that have left the organisation; as well as cutting funding for casual employment, labour hire positions and unscheduled overtime.”
The decision was delivered by the General Manager to over 100 Council managers, coordinators and team leaders at Fort Scratchley yesterday and full details of the implementation of this decision will be disseminated across the organisation during the following week.
The General Manager reiterated that in terms of permanent staff, the cuts will only look at the positions of those who have left employment with Council. The cut in funding to the casual labour, labour hire and unscheduled overtime will be determined by individual department managers on a case by case basis.
These changes will come into effect from Monday 22 October 2012. The General Manager doesn’t envisage a major impact on the delivery of Council services and he will continue to monitor the situation and adjust accordingly.
“We will monitor the impact on service levels as we move forward and make adjustments as may be required over time.”
Factors that have contributed to the deficit are lost income as a result of the sale of car parks, reduction in the Financial Assistance Grant, a downturn in Development Approval applications and waste tipping income among other things.
“I consider this is a prudent measure which will be reviewed further in December at the halfway point of the 2012-13 financial year.”
“We are currently undertaking significant work to develop a long term approach to ensure Council’s financial sustainability and overcome future deficit budgets. This requires close examination of all aspects of Council’s financial structure including income, expenditure, assets and debt strategy.”