Adelaide City Council faces economic impact of $30 million in light of COVID-19
It has waived rates for some traders and dropped carparking fees in light of COVID-19, now Adelaide City Council faces a huge economic impact bill.
City
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THE economic impact of COVID-19 on Adelaide City Council could reach $30 million in lost income, its leadership has revealed.
Adelaide chief executive Mark Goldstone and Lord Mayor Sandy Verschoor said income this quarter had been “significantly impacted”, forcing the council cut costs and delay projects this financial year,
A drop in paid parking costs, waiving commercial rates for traders in its properties for three months, no fees from venues like the Aquatic Centre and deferral of rates contributed to loss.
It has since cut costs on consultants, contractors, legal services, temporary labour and has re-prioritised projects like the Market to Riverbank Link Project until later this year.
It comes as a special meeting into the council’s finances was called for tomorrow night.
Ms Verschoor said the council was “not immune” to the impacts of the virus and faced challenging times.
“It’s clear that we must now all share the burden to successfully navigate the biggest social and economic challenge of our time,” Ms Verschoor said.
“The pressure on our income and cashflow is immediate and the effect is anticipated to be long-term.
“Clearly this is not a sustainable position for any organisation and is why we need to act quickly.”
Last month, the council announced a $4 million coronavirus support package for ratepayers, which included waiving rates for three months for businesses in its buildings.
It also dropped all day parking at its U-Parks to $8 per day until the end of May.
However, it is determined to get the Central Market Arcade development off the ground as soon as possible, and 88 O’Connell was still scheduled for 2022.
Mr Goldstone maintained the council’s balance sheet was “still very strong” because it had assets of $1.7 billion and “significant capacity” to borrow.
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“There is no doubt the financial impact of $30 million for three months is massive and that is not to say it will recover after three months, it will be ongoing impacts … it puts us in a position where we simply have to respond and adjust our business,” Mr Goldstone said.
“Yes it is challenging times … yes we have to make strong decisions and big adjustments and are being implemented but yes, we are going to be strong in recovery.”
The council has also come under fire in the South Australian Employment Tribunal for forcing its staff to take leave in light of COVID-19.
Staff are expected to return to work later this week or early next week.
Mr Goldstone said he was bound by confidentiality so could not reveal more about the tribunal case.
More information about the council’s third quarter fiances would be discussed next month.