Gisborne District Council ends year in a strong financial position

Gisborne District Council made a moderate surplus last financial year which will be carried forward to fund expenditure in the current year and repay past deficits. The 2009/2010 Annual Report goes to Council on Thursday to be adopted and highlights what was achieved in the last financial year (1 July 2009 – 31 June 2010) and how it was paid for.

The result is particularly pleasing considering the challenging economic times Mayor Meng Foon and chief executive Lindsay McKenzie comment in the introduction to the report. They acknowledge that affordability is a major issue for many in our district but note that Council has a continual focus on containing costs while thinking about the future needs of the district.

Management made a commitment to spend $1M less than was budgeted last year. Thanks to the efforts of staff and some improvements to our processes this has been achieved. We have committed to shave another $500K off our expenditure this financial year."

Operational savings were just one of the factors that contributed to Council’s surplus. Deferring some capital expenditure, additional income from grants and interest costs lower that budgeted all helped.
The Gisborne district has more roads per head of population than any other area. Roading costs continue to be the biggest expenditure item. The cost of the damage to roads and bridges from flooding was around $3M last year. This was partially offset by an increase in funding from New Zealand Transport Agency (NZTA). 

“Finishing the year with a surplus will help ease the burden of what are predicted to be two expensive years ahead” says chief financial officer Mike Drummond. “Our goal always is to collect the right amount of rates to fund the programme of work we consult with communities on each year in March. Residents can be sure that that the money collected is effectively managed with an eye on the future as demonstrated in the Annual Report.”

Council debt has trended downwards from a high of $30M in 2006 to $19M this year. Paying for the construction of the new wastewater treatment plant will push debt back up with $12.2M spent to date. The true effect of this development on debt won’t be seen until the end of the current year. The general reduction in debt levels up to this point is thanks to the foresight of Council six years ago to start saving for this major project. $9M was saved over the last 6 years to pay for this project. This is made up of $7.8M in capital rates and $1.2M in interest earned.

Many households have been assisted by the government’s rate rebate scheme which offers up to $570 off the rates bill to those ratepayers for those that qualify. More than 1800 applications were approved last year saving ratepayers $950K. For others Council offers the Easy Pay direct debit scheme that spreads the payments of rates evenly throughout the year and ensures no penalties are added to the rates. Contact Council’s customer services for more information on both of these initiatives.