The draft Annual Report, was presented at yesterday's Finance and Performance Committee, reports Council finished the year with a controllable surplus of $4,762,000 (note: this excludes carry forward into the current financial year).
Palmerston North City Council's acting chief executive and chief financial officer Grant Elliott says the variance occurred because of a reduced call for some expenditure, particularly maintenance related with no adverse weather events, the delay of some planned expenditure (for both external and internal reasons), a reduced need for professional service costs, and some grants not being incurred.
An additional $9,113,000 was available for debt reduction on top of the budgeted $3,632,000.
"This is very pleasing," says Mr Elliott. "However, it's important to note that debt levels will increase as those projects, particularly carried forward capital, are incurred."
Capital Expenditure programmes valued at $23.9m were incurred against the overall capital programme budget for the year of $38.6m.
"Unfortunately, Council was not able to carry out or complete all of the projects we had budgeted for in the last financial year."
Projects carried forward include: Papaioea social housing project; supporting infrastructure for the Lido Pool hydro slide project; Wildbase Recovery; seismic strengthening of Council owned buildings; Turitea Valley / Pacific Drive's new water supply; Longburn wastewater connection; Ashhurst wastewater treatment upgrade (possible pond lining); a waste minimisation community facility to assist with diverting waste from landfill; major upgrade of the Main Street Bus Terminal; and the Manawatū River Shared Pathway (Ashhurst to Riverside Drive).
Mr Elliott says it is important to note that when these projects are carried out debt levels will increase as they are intergenerational programmes that are partly funded by debt and paid off over time - rather than being paid for by the current generation of ratepayers.
The last financial year will not only be remembered for the significant reduction in debt. It will also be remembered for the construction and commissioning of the Ashhurst to Palmerston North wastewater pipeline, the local government elections, the opening of the first stage of the Ashhurst - Palmerston North cycleway, the opening of the solar farm and the redevelopments of the Globe Theatre and Peter Black Conservatory.
"As is always the case, many projects occur behind the scenes away from the fanfare and the past financial year is no exception," says Mr Elliott. "Council officers carried out significant work on earthquake building assessments, social housing, improving our water supply, the wastewater treatment plant, Wildbase Recovery, and attracting NZ Post and AgResearch to the city. Work on many of these projects will progress further this financial year."
Mr Elliott says council is focused on creating a vibrant, caring, innovative and sustainable city. I believe we have struck the right balance alongside ensuring we are also financially sustainable.
"We have some financial headroom and we have retained Council's AA long term credit rating from Standard and Poor's."
Copies of the draft Annual Report can be found in the Finance and Performance Committee Agenda at pncc.govt.nz. The adopted draft will now go to the full Council meeting on 29 September, and following ratification the Annual Report will be published next month both online and in print.