The Dunedin City Council's operating surplus was almost $13 million less than expected at the end of the financial year, but timing issues, rather than budgetary problems, are mostly to blame, the council says.
The surplus at the end of June was $4.7 million, compared with an expected $17.5 million.
The gloomy economic environment was behind part of the lower-than-expected surplus though, with unrealised losses and unfavourable interest revenue meaning the value of the Waipori fund was $4.9 million less than expected.
The council's financial result was presented to the finance and strategy committee yesterday.
The council's investment earnings were unfavourable to the tune of $5.5 million, with budgeted dividends not received and interest revenue down, though that was offset by a $5.6 million favourable budget line from sources including favourable overdraft interest.
"The net result is neutral," financial controller Maree Clarke told the meeting.
The Waipori fund shrunk from $72.6 million to $69.5 million earlier this year, with the council in February reporting sharp declines in equity markets and volatile exchange rates.
But positive returns on the bond market because of lower interest rates provided some good news.
The fund was established in 1998 using the proceeds from the sale of the Waipori electricity generation scheme and has been a valuable contributor to the council's finances.
Finance and strategy committee chairman Cr Richard Walls said yesterday the further fall was due to the economic environment, though the cash flow from the fund to the council was not affected.
The Forsyth Barr Stadium project had an effect on the surplus, as $6.8 million expected had not been received from the Community Trust of Otago and private-sector funding.
Ms Clarke said the trust money was coming soon and private-sector funding would arrive later than expected because of changes to the stadium's funding model.
The other major difference to the expected budget was $7 million unfavourable in the transportation operations budget.
Ms Clarke said a major reason was the strategic corridors budget, which relied in part on government funding, had been carried forward, with the government funding yet to be received.
