Council finances strong
13 August 2014 Waipa District Council is performing well against new national benchmarks put in place to measure the financial health of all councils in New Zealand.
Waipa's 2013-2014 draft annual report shows the council has met most of the new standards as it continues to tightly manage its finances.
Chief financial officer Ken Morris said benchmark measures around rates and debt affordability, debt servicing and debt control had all been comfortably met.
We have had a focus on repaying debt over the last two financial years and at balance date, Waipa's external debt was $13 million compared to $35.8 million that had originally been forecast. Relative to many other councils that debt figure is very low.
Mr Morris said the lower debt level was driven by savings and because council had spent around $20 million less than originally budgeted on major capital items.
When it is well managed, deferring capital spend has a huge impact on debt levels. This has significant benefits for ratepayers as less money is needed from them to service the debt.
The council had saved around $2 million in capital spend by reducing the scope of some works and bringing projects in under budget.
The draft report shows that the council is continuing to invest in the renewal of its infrastructure and that its operating cash flows are also stronger than planned. The council ended the financial year with a provisional general cash surplus of $292,000 (subject to audit confirmation) which will be used to offset next year's rates.
We run a very tight budget given our total turnover is around $79 million.
Waipa District Council ended the year with net assets of nearly $1.2 billion, mainly in land, buildings and major roading and water infrastructure. Cash balances are $8 million but this is likely to reduce substantially in the coming year as the council invests in infrastructure - particularly waters infrastructure - to keep up with the district's growth.
The draft annual report has yet to be audited. A final report will be publicly available by the end of September.
ENDS
Media enquiries: Jeanette Tyrrell 027 5077 599
