For the third year in a row Gisborne District Council has finished the financial year in a strong position. Borrowings are relatively low, $19m less than forecast in the 2009-2019 Ten Year Plan. Council is now in a position where it can look at progressing some of the community facility projects that have been around for a while says chief executive Lindsay McKenzie.
“Our current Ten Year Plan includes upgrades to the HB Williams Memorial Library, the War Memorial Theatre and the Olympic Pool. Developing the Tairāwhiti Navigations project and the inner harbour area are also signalled. Since the global economic crisis began to emerge in 2008, we have deliberately pushed out any non-essential capital investment in community facilities like these.”
We can’t keep pushing out these projects, says acting Mayor Nona Gaskin. “People make judgments about Gisborne being a good place to live, work and do business based on what they see. If we don’t keep investing in the sort of facilities communities expect today, we will fall behind. As we start putting together our next Ten Year Plan for 2012–2022 we will be asking people to consider what projects they want to see underway first and how they should be funded.”
Council will look to funding organisations to contribute to these projects. “Feedback I have received from funders is that they would look more favourably at investing in community facilities if Council’s priorities are clear and there is a greater commitment to ratepayer funding,” Mr McKenzie added.
Currently, only 5 percent of ratepayer funding has been committed to major projects such as the War Memorial Theatre.
Corporate services group manager Mike Drummond agrees that Council has reached a position where it could comfortably fund additional capital works through borrowing. “Putting capital projects off indefinitely carries the risk of deferring too much cost to future generations. Borrowing money is a good way of spreading costs over those who would get the long-term benefits; as long as it is affordable.”
“In the 2009-2019 Ten Year Plan borrowings were projected to peak at $52.7M in 2010/11. Our year-end borrowings are $33.7M. This means we are now forecasting to end the year $18M lower.”
Tight financial controls and improved financial management combined with operational efficiencies have resulted in a predicted forecast surplus of $2.9 million this year — instead of the budgeted $595,000 deficit.
Council has improved the way contracts have been managed and obtained sharper supplier pricing. Less was spent than budgeted on capital including building the new wastewater treatment plant. This has contributed to reduced borrowings and interest payments which has made a significant difference to Council’s bottom line.
Various benchmarking surveys, including BERL and Council League tables, show that Gisborne District Council is performing well above average for financial performance. Contrary to common perception, debt per ratepayer at $1808 is half the $3686 national average, and rates increases here are below the average for rural/provincial councils.
Final results for the 2010/2011 financial year will be published in Council’s annual report due out in September.