Council in a strong financial position but affordability still the biggest issue

Gisborne District Council staff reported to the finance and monitoring committee on Council’s performance measures in a new look Annual Report.

“Council takes measuring its performance very seriously,” said Finance and Monitoring Chair Craig Bauld. “Every year we set targets and then do our very best to achieve those targets. How well we do is measured in a variety of ways including ticket sales, resident satisfaction surveys, customer feedback and environmental testing. Last year Council met or almost met (within 5%) 78 of its 107 performance targets. Areas we did well in include reducing the amount of waste going to landfill, managing our water supply despite a dry summer and responding to animal complaints, hazardous spills and rural fire calls. We are happy with this result but will strive to improve things like the time taken to resolve service requests, time to process building consents and to improve the return to council from our business units,” Mr Bauld said.

The annual report shows that Council is in a strong financial position but rates affordability continues to be an issue. Net assets have increased slightly to $1.73 billion and debt has reduced to $18 million down from $24 million in 2008. The debt per person has fallen from $540 in 2008 to $408 this year. However debt is forecast to increase to $37.5 million in 2010 as Council builds and pays for the wastewater treatment plant.

Capital expenditure for the year was $33.7M including expenditure on roading of $17 million, water, wastewater and storm water of $4.4 million, a land purchase for the wastewater treatment plant of $2.5 million and other council buildings of $2.2 million. Rates are not the only way Council was funded. Last year. More than half Council’s income came from other sources including grants and subsidies, interest, dividends and vested assets.

“Council should have collected about $1million more in rates last year to cover the wear and tear on council assets,” said chief financial officer Mike Drummond. “However after taking into consideration additional income received Council shows an underlying operating deficit of $544,000.”

The Annual Report also shows a significant accounting surplus of $18.2 million for the year compared with a budgeted accounting surplus of $8.19 million. Unfortunately this surplus can not be used to reduce rates. The main contributors to this increase are:

$11.63 million in grants and subsidies that were received for capital works but can not be used to pay for the day-to-day operation of Council.

The high number of subdivisions completed last year that resulted in $8.44 million worth of assets being transferred to Council ownership. These are recorded as Council income. These assets include roading, water, stormwater and wastewater networks.

The Annual Report is expected to receive an unqualified audit report and be available free from the Councils website www.gdc.govt.nz following adoption by Council on 29th October.