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Council deficit

Tuesday 4 August 2009, 8:52AM

By Whakatane District Council

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WHAKATANE

Lower than expected revenue, increased depreciation costs, reduced development contributions levies and the general economic downturn are a major factor in Whakatane district council’s $2.5 million budget deficit.

The Council’s Chief Executive Diane Turner says the economic downturn and some subsidies not being received until works are completed saw the Council’s operating income fall $6.8 million below budget.

“The economic downturn and the consequential decline in applications for building and resource consents, a drop in development contributions collected account for a $1.6 million decline in revenue.”

In addition, Ms Turner said delays in completing some roading capital works and construction of the Matata wastewater scheme anticipated in the 2008/09 budget means the Council would not receive nearly $3 million in subsidies.
Ms Turner said while the budget deficit of $2.5 million appears to be large, about $1.9 million is in book depreciation of assets and the remainder of the deficit is the result of the significant decline in revenue, largely as a result of the slowdown in economic activity.