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Council action sees $3.3m shortfall slashed

Council action sees $3.3m shortfall slashed

A financial report presented to Rotorua District Council’s Operations & Monitoring Committee this morning [12 February] shows action taken to reduce a recently forecast $3.3 million funding shortfall is proving successful.

The financial performance report for the first six months of the current financial year to 31 December 2013 shows the council’s anticipated deficit at year end [31 June 2014] has been substantially reduced and the shortfall has now been revised down to $572,000.

RDC finance manager Thomas Colle said while there was a single-minded focus by management and staff on reducing costs, substantially cutting the $3.3 million shortfall was a big ask and it did come with risks in terms of achievability. It would require exceptional rigour and discipline he said.

Mr Colle said the previous deficit was the result of a range of factors including over optimistic revenue figures and a number of budget anomalies, including an understatement of salaries.

Operations & Monitoring Committee chair, Councillor Janet Wepa, commended councillors and management for responding swiftly to the earlier forecast shortfall and for making the hard decisions needed to achieve a more acceptable outcome for the year’s finances.

“There have been some tough calls made by elected members to improve our bottom line, including the deferral of a number of non-essential capital projects.

“Management and staff have also stepped up and I thank them for their single-minded determination to reduce costs.

“Decisive action such as not replacing more than 50 staff who have left in recent times, reviewing all budget lines and generally tightening belts across the organisation have all helped achieve this improved forecast.
“The real challenge now will be to ensure that with our much improved financial forecasting capability and new financial management resources in place, we set more realistic and sustainable budgets for the future through our annual planning process.”


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