City of Newcastle (CN)’s annual financial report confirms the city invested more than $100 million into infrastructure projects last year, as part of a stimulus program to buffer the local the economy during the pandemic.
Audited financial statements for the financial year 2021/22 show CN delivered $100.6 million in key infrastructure projects, following on from $102.3 million spent the year before, again as a response to the economic impact of COVID-19.
Newcastle Lord Mayor Nuatali Nelmes said last year’s budget was strategically boosted to address the economic impacts of COVID-19 on the local community, a move made possible by CN's strong financial record.
"There's no doubt COVID-19 placed significant strain on our community and our budget, however as a Council we understand the importance of providing targeted responses and support for those in need," Cr Nelmes said.
"Council unanimously voted in August 2021 to spend an extra $10 million on additional COVID support measures to stimulate the local economy and help create more than 100 new jobs.”
"This decision, which was made in the midst of a pandemic-enforced lockdown that would ultimately last for more than two months, was only possible due to our strong financial position, a legacy of delivering six consecutive operating surpluses prior to the pandemic."
While the capital works boost resulted in CN running a $12.5 million deficit if revenue from capital grants and contributions are excluded, CN still recorded a $20 million turnaround in its financial performance from the year before.
In addition to the impacts of the three-month lockdown of Newcastle from August last year was the Wickham fires, which cost $2.5 million in clean-up costs, and to date remains outstanding by the owners of the two demolished buildings.
The Newcastle Airport, which is 50 per cent owned by CN, also suffered a $2.3 million loss versus a forecast profit of $4.0 million.
However, with the impacts of COVID-19 continuing to reduce, CN is forecasting a budget surplus this year of $1.3 million despite a record $132 million infrastructure spend.
The City remains in a strong financial position with net assets of $1.91 billion and total cash reserves of more than $363 million, including unrestricted reserves of $26.6 million.
Cr Nelmes said CN would continue to deliver high-quality services and projects in a financially responsible way.
Highlights of the capital works program delivered in 2021/22 include:
- $16.6 million on renewal and maintenance of the city’s roads
- $14.1 million on waste management including planning for the organic waste processing facility
- $11.3 million on transport projects
- $10.6 million on city centre and urban centre revitalisation
- $8.8 million on recreation parks, sporting facilities and open spaces including the $1.5 million Wallsend Active Hub
- $7 million on the environment including $3.6 million on coast, estuary and wetlands
- $4.9 million on renewal and maintenance of the stormwater network
- $4.3 million on coastal revitalisation
- $3.7 million on aquatics facilities including the first stage of the Newcastle Ocean Baths upgrade project
- $3.5m on fleet renewal
- $1.8 million on the expansion of the Newcastle Art Gallery
City of Newcastle CEO Jeremy Bath said while COVID-19 had caused obvious financial challenges, prudent economic management had allowed CN to increase its support for the community without risking its track record of financial sustainability.
"Our financial statements have been audited by the NSW Audit Office who issued an unqualified opinion for the 2021/22 financial year, which is an outstanding result. CN also outperformed the benchmarks in all but one of the six financial key performance ratios set by the Office Local Government,” Mr Bath said.
"Prudent financial management again enabled us to cope with the economic impacts of COVID-19 and support our community when they needed it most," Mr Bath said.
"Increasing our works program to $100 million for the second consecutive year helped stimulate the local economy and create new employment opportunities, with every one million dollars we spend generating about 10 new local jobs.
"Importantly, the works were fully funded from the City's cash reserves, which have been built on the back of six years of strong financial management and surpluses.
"While we’ve felt the enormous impacts of the past three COVID-affected financial years, the underlying financial strength of our organisation and hard work of our staff has ensured we are well positioned to support existing services and invest in new and upgraded infrastructure to improve the livelihood and wellbeing of our community."