LYME Regis Town Council is expected to be £339,000 over budget by the end of the financial year – but still has more than £1.4million in reserves.
The council budgeted for an overall expenditure of £1,573,402 for the 2018-19 financial year and an income of £1,478,884.
While takings are expected to be up – forecast at £1,597,905 by the end of March 2019 – the council is expected to spend a total of £1,937,084, which is £339,179 over budget.
Councillors were told at last week’s Strategy & Finance Committee meeting that the biggest overspend would be on “outside works”.
They had included a sum of £362,056 for these works, with the amount being spent to date being £193,257. But a report to councillors by town clerk John Wright indicated a forecasted expenditure of £676,672.
Mr Wright explained that the council’s normal pattern of income and expenditure had been affected by decisions to commit additional expenditure.
For example, a budget of £45,000 was set for the refurbishment of the Marine Parade toilets, but the project actually cost almost twice this amount – coming in at £82,000.
Councillors had planned to spend £15,000 on the replacement of beach huts on Marine Parade, but it was eventually agreed to spend £112,000.
Funding for additional projects during the year that were not anticipated had also affected the budget, including £11,203 for First Bus to operate the park and ride and £15,000 for Hydrock to carry out a traffic survey.
Office administration was budgeted at £108,424 but is forecast to cost a total of £165,787 by the end of the financial year.
The council’s biggest earners are car parking (£682,158), chalets/beach huts/caravans (£350,693), commercial rents (£208,794) and the precept (£120,708).
Mr Wright said that the council could afford the overspend of £339,176 as it currently had £1,419,324 in reserves, but warned councillors that they should be “mindful” of the situation.
“We can afford it and it’s not going to cause problems but we need to know what we are doing and understand the circumstances,” he added.
In his report, the town clerk suggested that the forecasted overspend could be reduced if councillors chose not to go ahead with some of their proposed objectives, including a concert bowl in Lister Gardens (£25,000), outside gym equipment (£25,000) and a boules pit in the gardens (£3,000).
He also suggested that beach huts could be replaced over three years rather than all at once, which would save £97,000 this year.
Councillor Steve Miller said the report showed the “cumulative impact” of the council’s decisions, adding: “We’re fortunate to have reserves to fall back on but we need to be mindful as we go forward.”
Councillor Richard Doney commented: “Most commercial organisations set a budget for the year and that’s it. We’re in the fortunate position that we have cash under the bed.
“Things occur during the year and we have been quite liberal. There’s always going to be unforseen items of expenditure when we have no choice but I’m more interested in the discretionary things.
“This year, we have agreed a lot of unforseen expenditure and that does not show good discipline, even thought we can afford it. We need to consider that.”
Councillor Brian Larcombe added: “We have to have this mindful eye about next year because some projects which we undertake don’t tie up neatly at the end of the financial year, they run over.”
Referring specifically to repairs to the roof above SWIM, the Amusement Arcade and the Antiques & Craft Centre on Marine Parade, which is expected to cost more than originally anticipated, Councillor Larcombe continued: “I don’t think we should just be contained by the year but also by what we know and we know there is money having to be spent next year.
“We have to be very cautious. There’s a lot of ‘nice to have’ things in here that we don’t actually need.”
Councillor Stan Williams said Lyme Regis was in an “extremely dangerous position” with the sea on one side and slipping cliffs on the other and the council had to hold significant reserves in case of a major problem.
Councillor Derek Hallett said he did not think the council should give out any more grants until next year’s financial position was more clear.