Capital spending held over

Neil Gillespie
Neil Gillespie
Central Otago District Council spending on capital projects was only half that projected for the last financial year.

But the $14.5million underspend had been carried over to other financial years and would have minimal impact on budgets overall, council finance manager Jotham Kasibante said.

The underspend - capital expenditure for the year ending May 31, 2019 was $15million compared to the projected $29.5million - was caused by delays in some major projects, Mr Kasibante said.

They included delayed spending of about $6.7million for the Lake Dunstan Water Supply Project, which was delayed by one year to enable the Clyde wastewater pipeline to be constructed at the same time as the water pipeline between Clyde and Alexandra; spending of $1.7million on the Omakau water supply which had been delayed while investigations into an alternative water source were done; and a further $1million which would be carried forward for upgrades to the Omakau and Naseby wastewater treatment sites. Work on those sites was about six months behind schedule.

Some councillors were concerned about the underspend when the figures were presented to them by council staff recently.

But deputy mayor Neil Gillespie said it was ''not a bad thing'' to have ''money in the kitty'', and council corporate services executive manager Leanne Macdonald said it was the council's goal to ''catch up'' with major projects.

Mr Kasibante said major capital projects typically spanned several years. Budgets were set at the beginning of a project but the timing of spending could vary ''for a number of reasons''.

However, overall project costs should be close to the original budgets, he said.

''The change to the timing of expenditure occurring will have minimal impact on council from a financial perspective, and is unlikely to impact on depreciation costs. We only commence depreciating an asset once the project is capitalised.''

pam.jones@odt.co.nz

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