The place of the possible
- The Council achieved an underlying net surplus of $1.8 million compared to a budgeted breakeven. The underlying net surplus / (deficit) is the accounting measure that best reflects what the Council collects through rates, investments and other revenue sources such as fees and charges, and what the Council spends on providing services to the City. Having a small underlying surplus / (deficit) reflects the Council’s commitment to intergenerational equity: each generation of ratepayers should pay for the services they consume.
- The Council's headline net surplus is $35.5 million compared to a budgeted $26.4 million, giving rise to a favourable variance of $9.1 million, as reported in the Statement of Comprehensive Revenue and Expense. 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.
- The Council '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 the Council has acted prudently during the year and within the financial parameters set in our Long-term Plan.
- The Council spent $146.5 million during the year on asset renewals and new assets from a budgeted capital expenditure programme of $166.9 million. This expenditure included roads, swimming pools, water, waste water and storm water 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. The Council is working to improve the alignment of actual to budgeted capital spend.
- The Council has maintained its AA credit rating. This reflects the strong financial state of the Council.
- The Council's debt levels remain low - net debt is $367.8 million. We have investments of $354.0 million.
The Council’s net debt has only increased by $21.3 million during the year, $34.0 million less than budget. The difference is mainly due to changes in the timing of capital projects.
|STRATEGIC AREA||TOTAL COST |
|COST PER RESIDENT PER YEAR |
|COST PER RESIDENT PER DAY |
|Social and Recreation||103.3||517||1.42|
It costs $5.95 per resident per day to pay for the wide range of services that the Council provides, ranging from the provision of basic services such as roading, water, waste water and storm water, through to the maintenance and running of parks, gardens, swimming pools, libraries and the economic development of the city.
The Council’s biggest source of revenue is rates revenue, which accounts for 54% of all revenue. The Council’s funding mechanism is governed by its Revenue and Financing Policy, as disclosed in the 2012 Long-term Plan.
The Council’s largest operational expenditure is on Environment with 33%, which includes the maintenance of water, waste water and storm water networks, followed by Social and 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 and 2012 Long-term Plans.