News, Events and Culture

Satisfactory start to year continued

Monday February 16 2015

Palmerston North City Council has achieved an operating budget surplus for the first half of the 2014/15 financial year.

The Council has recorded a controllable surplus of $2.1m in the period to 31 December 2014.

Chief executive officer Paddy Clifford says several factors contributed to the variance including a continuing 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 in some areas; and, some grants not being incurred as yet.

"The second quarter has essentially matched budget, with favourable variance from the first quarter maintained," says Mr Clifford. "In the second half of  the financial year I expect some of the budgeted expenditure will be incurred and we will use the reduced call for some expenditure to absorb unplanned expenditure such as the mayoral by-election. We will also monitor the small reduction in revenue that occurred in the second quarter."

Chief financial officer Grant Elliott says it is further consolidation of the good start to the 2014/15 financial year.

"The half year result is evidence of the focus of Council management and officers on expenditure reduction while still delivering the services required by our community."

Financial accountant Keith Allan told Councillors at today's Finance and Performance Committee meeting that Capital Expenditure programmes valued at $7.1m have been incurred against the overall capital programme budget for the year of $44.2m.

Keith Allan says this pattern of expenditure is similar to previous years, reflecting the planning necessary before work can commence. Although he says it is now apparent that due to external factors there will be significant programmes unable to be completed in the current year. These include the redevelopment of Papaioea Place social housing,  seismic strengthening of Council buildings including some Wastewater Plant, development of a new bore for Kelvin Grove water supply, the Turitea Valley Road and Pacific Drive new water supply link and reservoir and Ashhurst replacement water reservoir.

Mr Elliott says "the current level of debt is below that budgeted due to the lower level of capital expenditure than budgeted".

Copies of the Financial Report can be found in the Finance and Performance Committee Agenda - (Internal Link)