Council hit with $23m shortfall
The Whangarei District Council saw a budgeted surplus of $11.6 million at the start of the year to June 30 turn into a similar-sized deficit at the end of the financial year.
Total council income for the year was $123.4 million, which was $8.4 million down on budget. The reduction was attributed to factors such as a downturn in building, a reduction in grants and subsidies due to less capital expenditure and an assets revaluation last year.
Adding to the budget shortfall, total council expenditure was $135 million - $14.7 million more than budget. Much of the overspending was attributed to last year's assets revaluation and a change in financial reporting.
Presenting the 2011-12 annual report to the council on Wednesday, finance and support committee chairman Councillor Warwick Syers said the $23.2 million variance between the surplus at the beginning of the year and deficit at the end was disappointing, but he pointed to spending on transportation ($22.6 million) and wastewater ($7.7 million) as producing major council achievements for the year.
Mayor Morris Cutforth's introduction to the report also focused on successes. He ended his message by saying: "One of the proudest outcomes was that we haven't had a single sewage spill into the Whangarei Harbour this financial year, despite numerous wet weather events."
Property sales brought in $8 million, which was just under $6 million less than budget, and the council borrowed $7.1 million.
Total debt at June 30 was listed at $155 million, compared with $147 million at the same time last year.
A council summary of the report says: "While our end-of-year debt position is higher than planned due to delays in completing our property sales programme, we plan to limit debt increases in the future."
Some councillors were concerned about write-offs, particularly Councillor Merv Williams, who recorded a lone vote against adopting the report because he disapproved of the International Financial Reporting Standards the council was required to use to compile the accounts.
"It's very distressing for me to write off $5.2 million," Mr Williams said. "We're told these write-backs are minor, but they are very significant.
"Also, we're down $23 million on budget. We need to ask ourselves whether our business is sustainable."
Mr Syers said half of the 20 items written off went back to the 1980s.
