We achieved an underlying net surplus of $1.2 million compared to a budgeted break-even. The underlying net surplus / (deficit) is a measure that reflects what Council collects through rates, investments and other income sources such as fees and charges, and what the Council spends on providing services to the city.
Having a small underlying surplus / (deficit) reflects Council’s commitment to intergenerational equity: each generation of ratepayers should pay for the services they consume.
Our headline net surplus is $27.5 million compared to a budgeted $35.7 million, giving rise to an unfavourable variance of $8.2 million.
As reported in the Statement of Comprehensive Financial Performance. The surplus includes grants from central government for capital projects which do not affect rates. The variance is mainly due to the revaluation of investment property – again not impacting on the rates requirement.
We met 12 out of 13 new financial prudence measures.
Central government has introduced new financial “benchmarks” that local bodies need to report against. This shows Council has acted prudently during the year and within the financial parameters set in our Long Term Plan.
We spent $128.0 million during the year on asset renewals and new assets from a budgeted capital expenditure programme of $172.5 million.
This expenditure included roads, swimming pools, social housing, water, wastewater and stormwater networks, parks and open spaces. We spent less than budgeted due to delays in completing swimming pool and social housing improvements and the deferral of earthquake strengthening the town hall. Council is working to improve the alignment of actual to budgeted capital spend.
Council’s debt levels remain low – net debt is $346 million. Offsetting this we have $381 million of non-cash investments.
Council’s net debt has only increased by $2.6 million during the year, $26.6 million less than budget. The difference is mainly due to changes in the timing of capital projects.
The wide range of services the Council provides costs $5.82 per resident per day. This includes basic services such as roading, water, wastewater and stormwater as well as parks, gardens, swimming pools, libraries and the economic development of the city.
|Activity area||Cost per resident per year |
|Cost per resident per day |
|Social and Recreation||500||1.37|
The Council’s biggest source of income is rates revenue, which accounts for 55% of all income. The Council’s funding mechanism is governed by its Revenue & Financing Policy as disclosed in the 2012–22 Long Term Plan.
The Council’s largest operational expenditure is on Environment with 33%, which includes the maintenance of water, wastewater and stormwater networks, followed by Social & Recreation at 24%.
The Council’s revenue over time is influenced by the amount of grants it receives for capital expenditure in any one year. This varies dependant on the annual capital expenditure programme to be funded, as shown by the higher 2012 revenue levels resulting from an increase in housing grants received.
The Council has shifted its operational expenditure by strategy over time from Governance to Economic Development and Urban Development in line with its overall strategy as outlined in the 2009 & 2012 Long Term Plans.