Fewer parking fines, more unpaid debt hits city council pocket

The Adelaide City Council has estimated it could lose about $700,000 more than first expected due to the ongoing impacts of COVID-19 on debt payments and parking and fines income.

May 28, 2021, updated May 28, 2021
 Photo: Tony Lewis/InDaily

Photo: Tony Lewis/InDaily

It comes after the council in March estimated it would suffer a $28.7 million pandemic hit over the 2019-20 and 2021-22 financial years, but that cost has now grown to $29.4 million.

A report to be presented to councillors on Tuesday night states the new estimate reflects the impact the pandemic has wrought on Town Hall’s income and cash flows, with the council stating its debtors are experiencing “difficulty” in receiving payment for outstanding debts from rates and rental.

According to the report, there are 414 outstanding accounts totalling $3.4 million with collection agencies, 88 accounts totalling $865,000 that experienced financial hardship, 34 customers under payment arrangements for $165,000, and 16 accounts where administrators or liquidators have been called in to recoup $76,000.

The biggest blow to the council’s income has come from a decline in off-street parking, with staff estimating an approximate $7 million loss in parking tickets over the last two financial years.

A decline in expiations has prompted the second-biggest financial blow, totalling just under $7 million.

Other income losses have stemmed from the closure of the Aquatic Centre ($4.8 million), loss of on-street parking ($3 million) and the cancellation of Adelaide Town Hall hire and events (just under $2 million).

Meanwhile, the council has spent over $11 million in assistance packages and campaigns to attract people back to the city, $3.2 million waiving of rental payments, $500,000 freezing rates and charges and just under $300,000 on additional cleaning.

“The impact of COVID-19 on Council’s financial results has stretched further than loss of income,” the report states.

“Hardship subsidies offered to ease rate and rental payments and additional costs of cleansing services to keep our city safe, directly impacted our operating position.

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“In addition to operating impacts, COVID-19 has also impacted the City of Adelaide’s cash flows”.

However, the report notes “higher than anticipated” returns on commercial operations have softened the financial blow.

The reopening of the Aquatic Centre has brought in $2.8 million in income, while council-owned UPark car parks have generated $552,000 in revenue over the past two financial years.

Lord Mayor Sandy Verschoor said the report outlined “forecasts that are a moment in time”.

“I don’t think there’s anything concerning in the report,” she told InDaily this morning.

“In fact, we’ve had some great recoveries in this financial year, so we’re actually travelling quite well.

“That’s all been taken into account in terms of our 2021-22 financial plan.”

The council’s draft long-term financial year states the council would return to an operating surplus next financial year.

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