Western Bay of Plenty Council ends fiscal year with surplus project


The Western Bay of Plenty District Council has a projected $3.3 million surplus for the 2021 financial year. Photo/Andrew Warner

Western Bay of Plenty District Council ended fiscal 2021 with a projected surplus of $3.3 million.

The unaudited annual financial result was presented to the Performance and Monitoring Committee last Thursday.

Chief Financial Officer David Jensen said the surplus was mainly due to underspending and staff costs.

“We are all aware of the environment we operate in,” Jensen said.

One area of ​​underutilization was council operating projects, he said.

“There have been well-known difficulties in getting money out and performing some of these contracts, and that shows in our surplus.”

Garry Webber, Mayor of Western Bay of Plenty District Council.  Photo/Andrew Warner
Garry Webber, Mayor of Western Bay of Plenty District Council. Photo/Andrew Warner

According to Jensen’s report to the committee, total operating expenses were $104.21 million, or $3.02 million less than the annual budget.

The main variances were the additional level of service projects of $5.66 million, which was $4.069 million below the annual budget of $9.73 million.

Additionally, personnel costs of $26.78 million were $581,000 less than the annual budget of $27.37 million. The report says this was largely due to the timing of vacancies being filled throughout the year.

At the meeting, Mayor Garry Webber said, “As always, improving your record makes everyone happy.”

He cautioned against the need to include the impact of depreciation in the revaluation of assets currently underway.

“When you tell everyone what the valuation brings, you have to tell them about the impact of the depreciation.

“It’s what you have to swallow at the same time, and it takes a bit of the shine away because it’s going to have to be budgeted for in the future.”

Board staff are working with external appraisers to revalue board assets to reflect probable replacement cost as of June 30.

Jensen said: “Normally the Council revalues ​​its assets every three years, but with the movements in building costs and inflation over the last 12 months we have been asked to go out and revalue all of our assets. this year as well.”

He agreed with Webber about depreciation.

Councilor James Denyer wanted to know how capital spending was going now that the closures were over.

Jensen said financial completion of the capital program was just over 70%.

“With advice across the country, the average pass in New Zealand for the last financial year is between 50 and 80 per cent,” he said.

“I think the Council [Western Bay] does very well in terms of other board experiences.

“Obviously what happens in the future will depend on the market for entrepreneurs.

“There are a lot of things that may be out of the Council’s control, but we are working closely with our suppliers to try to do our best.”

Total capital expenditures of $40.38 million were $22.34 million under budget for the full year.

Jensen said financial contributions were “largely in budget” as well, with “very, very little” underperformance.

He said after talking to developers and the planning team, it was unlikely the board would hit the full financial contribution budget for fiscal year 2022.

Developers have expressed “some concern” about banks’ ability to lend money to people buying new properties, Jensen said.

“Some of the developers are feeling a bit shy about launching new sections in the market if banks aren’t lending to consumers.

“So just a certain constraint in the pipeline that we saw coming for this fiscal year in terms of new development.”

Jensen closed his report to the committee by saying the board met all of its key performance indicators for the year.

“We did everything we could, but there were a lot of instances where we weren’t able to spend all the budgets.”

The financial result will now be confronted with auditors, in accordance with the standard procedure, and then approved by the board.

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