Financial results above expectations

The Waitaki District Council is in a strong financial position, recording a healthy before-tax surplus more than $1.5 million better than predicted in July and a major improvement on a budgeted loss.

When the council prepared its 2013-14 budget, it was budgeting for a $290,000 loss. An indicative result towards the end of the financial year was projecting a surplus before tax of $2.046 million.

Now, its draft 2013-14 annual report records a $3.694 million surplus before tax, compared with a surplus of $1.96 million in the previous financial year.

That puts the council in a strong financial position as it starts preparing its long-term plan for 2015 to 2025, but does not mean all can go to cutting rates.

Within that surplus is more than $1 million of ''tagged items'', money collected for specific purposes which can only be used for those purposes.

The draft annual report, which is neither audited nor fully complete, goes to the council's audit and finance committee meeting on Wednesday, but no significant changes are expected.

In it, accounting manager Ian Wells said the council was in a sound position financially. Key asset values were being maintained, there was minimal external debt and the reported cash position was very strong, having increased by about $2 million over the end of the 2012-13 financial year.

There was likely to be some movement between capital and operating costs, but this was not expected to be material.

The statement of comprehensive income showed total revenue at $47 million (compared with $43 million in the 2012-13 financial year), when it was budgeted at $43.864 million. Of that, rates made up $28.25 million, similar to what was budgeted and to the previous financial year.

The biggest gain in income was in government grants and subsidies, at $6.86 million, about $1.1 million better than expected.

Total operating expenditure was $43.320 million (2012-13 $41.118 million in 2012-13), less than the $44.136 million budgeted. Costs were reduced by about $500,000 in personnel costs, partly through vacancies not being filled and staff reorganisation, and savings achieved in insurance and electricity costs.

One issue tackled in the report is what appeared to be a higher turnover of staff during the financial year - the highest in the past five financial years.

The council has 121 fulltime equivalent staff.

During the past year, total employee turnover was 20%, broken down to 18.2% of fulltime staff leaving and 23.8% of part-time staff.

In the 2012-13 financial year, total staff turnover was 9% and in the previous financial year 15.8%.

Analysing the turnover, the annual report said of the 17 fulltime staff who left, seven were for career advancement, three for family reasons, two for restructuring, one each for retirement and fulltime study and three for other reasons.

Part-time employment was historically more volatile with many of those seeking either fulltime work or greater hours.

The report concluded turnover in the last financial year was ''not a signal of any wider concern''.


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