Melbourne coronavirus: Councils reveal financial impact from pandemic

Homeowners in most councils were slugged with rates increases, while only two known chief execs took a pay cut to their six-figure salaries.

A Leader/Saturday Herald Sun investigation has revealed the financial toll of the coronavirus pandemic.

The toll of the global pandemic on Victorian councils’ bottom line has been revealed, with some plunging millions of dollars into debt and others forced to slash jobs a Leader/Saturday Herald Sun investigation can reveal.

As homeowners and businesses in most municipalities were slugged with rates increases this financial year, only two chief executives of councils who responded took a cut to their six-figure salaries.

Mornington Peninsula chief executive John Baker took a “substantial reduction” to his pay, while Whittlesea’s former acting chief executive Joe Carbone accepted a 20 per cent pay cut between April and October last year.

Morning Peninsula former mayor Sam Hearn also opted to take a 20 per cent cut to his allowance while another councillor went without any allowance from July to November.

Port Phillip councillor Marcus Pearl pledged to donate half of his allowance — about $13,750 — to local community groups, including food banks and sporting clubs.

Monash Council was the only municipality of those who responded to pass on savings to every ratepayer in the city, cutting rates by 10 per cent, a reduction of about $157 per property.

The waived amounts cost the council $12.7 million in revenue.

Several councils, including Stonnington, Maribyrnong, Yarra Ranges, Ballarat and Wodonga, did not increase rates from 2019-20.

Port Phillip Council was forced to restructure its workforce as a result of the financial challenges, axing 62 full time equivalent positions. The job losses saved the council $5.6 million.

The council suffered a $20 million budget shortfall from the COVID-19 crisis and declared an economic emergency in the municipality, but Mayor Louise Crawford said the restructure had helped addressed the revenue loss.

Port Phillip and Monash councils also froze salaries of all senior officers, including the chief executive, for the 2020-21 financial year.

Casey Council plunged into debt of more than $14 million after homeowners facing financial hardship fell behind on their rates repayments.

About 600 ratepayers in Bayside applied to defer their 2020 rates bill and any penalties, with the council tipping it would lose about $8.7 million in revenue as a result of the ongoing health crisis.

Despite this, the council was on track to record a surplus of $15.5 million.

Stonnington Council was expected to finish the financial year with a $14.7 million surplus thanks to a healthy savings stash.

It comes despite the council estimating a $25 million revenue loss as a result of the pandemic.

Brimbank Council had at least 477 applications for rates help in the form of waivers, deferments and payment arrangements approved by the council.

Maribyrnong Council would not say if staff or councillors took a pay cut last year but estimated its revenue loss as a result of service closures to be about $7 million.

Glen Eira Council was forced to temporarily stand down library and leisure centre staff without pay as coronavirus relief packages contributed to a $1.98 million budget deficit.

The pandemic has cost Knox Council about $10 million in lost revenue and interest.

Maroondah Council refused to say what the overall impact to its operating budget was.

Kingston Council corporate services general manager Paul Franklin said no staff had been let go as a result of the pandemic, with all facilities back open subject to health advice.

He did not answer the Leader’s questions relating to staff pay cuts or the impact of the pandemic on the council’s bottom line.

Mr Franklin said that council had not determined if a rate increase would be introduced next financial year, and added that delays on major projects caused by the pandemic were set to be resolved by mid year.

“Council’s focus for 2021 will be continuing to support our community in their recovery from COVID-19 and meeting their expectations around the delivery of important community projects and services,” he said.

Greater Dandenong Council expected to take a $16.5 million hit to its bottom line this financial year and predicted financial impacts were likely to continue in future budgets.

Ratepayers Victoria president Dean Hurlston said he had no sympathy for councils losing millions of dollars in savings due to the pandemic.

“Look at what everyone else has lost, how many have lost their jobs, businesses and livelihoods,” he said.

“Councils have become addicted to discretionary revenue, and its time for councils, like every other business in Australia, to tighten their belts, learn to live within their means, and become more efficient.

“What we’ve seen from councils is smoke and mirrors … they have not taken significant hits from rates income, nor have they provided significant relief to ratepayers.

“They haven’t lost one dollar in rates, and I have no sympathy for councils crying poor over discretionary income.”

Councils across Melbourne have reported delays in several major infrastructure upgrades, but no projects have been scrapped.

Wodonga Council chief executive Mark Dixon did not reveal the financial impact of the pandemic but said the council remained “in a solid fiscal position”.

Ballarat Council said there had been no loss in council revenue but the number of people who had fallen behind in rates payments was up 2.5 per cent on last year.

Mildura Rural City Council general manager corporate Chris Parham said it was too early to say what the final impact to the bottom line would be, but the fallout was expected to be felt in next year’s budget as well.

A Bass Coast Shire Council spokesperson said no services had been cut or reduced due to the pandemic but it had forced delays to some capital works projects.

Frankston and Whitehorse did not respond by deadline.