While the Waitaki District Council is expecting "a positive financial result", the year-end surplus will not be as high as the anticipated $5.07million surplus indicated in the latest draft report, the council’s chief financial officer says.
Paul Hope presented the council’s period 12, 2015-16 monthly report to the Finance, Audit and Risk Committee in Oamaru this week and in it he noted the indicated $5,070,000 "technical" surplus was "significantly better than budget but consistent with what has been reported over the last few months".
In the council’s pre-election report, issued last month, the council’s statement of comprehensive revenue and expense shows a projected $47,869,000 in revenue and $44,004,000 in expenses, and therefore a surplus of only $3,865,000 — a difference of about $1.2million.
Mr Hope said the difference in the two reported anticipated surpluses was due to "ongoing adjustments to depreciation and other gains and losses, both asset value driven accounts".
"As noted in the report and at the meeting, once the final depreciation adjustments are made we expect to end up somewhere between the two [reported anticipated surpluses]."
He said "not much" of the anticipated surplus was generated from rates or the rate-funded activities.
Revenues were up as Oamaru landfill user charges, $614,000; Alps 2 Ocean funding, $385,000; Whitestone Contracting Ltd’s annual dividend, $442,000; forestry net sales, $364,000; and "other", $335,000, came in higher than expected.
And expenditures were down: personnel costs were lower, largely due to vacancies, by $278,000; depreciation spending was down $646,000; spending on roading contracts was down $679,000; spending on consulting for the district plan had yet to occur and so was down $266,000; and "all other" spending was down $626,000.
The combined positive variance was a "favourable" $4,635,000.
"[The anticipated surplus reported] is an interim result, we’re still working on some of the numbers, it’s still a work in progress," Mr Hope said.
"It is going to be a healthy surplus that we report in the final report, a lot of those items aren’t going to change."
The council issued a statement on Wednesday, which noted the majority of the surplus was not "profit as most people would understand it".
The money had already been allocated in council plans to "develop and grow our district".
Addressing the statement in a telephone interview this week Mr Hope said it was important to note "the difference between a profit as a business understands it and a surplus ... it’s not like sales where we just try to generate sales and minimise costs and a big number at the end is great. A lot of that stuff, it’s either a one-off or it’s been received for a specific purpose and we’ll spend it later."
Council spending planned for the 2015-16 year that been deferred would be discussed at the council’s September meeting.
The council’s final financial position would be reported in October after an external audit.
