Prudent financial management in tough year
Prudent financial management in tough
The Council posted a net surplus of $16 million in 2010/11 although this was less than forecast due to an increase in the provision for the leaky homes Financial Assistance Package.
The budgeted surplus for the year had been $49 million but the Council increased its provision for leaky homes claims by $34 million.
The Council’s Governance Portfolio Leader and Chair of the Audit and Risk Management Subcommittee, Councillor Ian McKinnon, hopes Wellingtonians will find the time to read the report as it gives an insight into the governance and management of the city. The report not only covers the financial statements but also the performance of the Council in all its activity areas.
Cr McKinnon says the surplus has been spent on specific capital projects and cannot be used to offset rates. The Local Government Act stipulates that Councils must run balanced budgets.
The Council’s net borrowings increased $31 million during the year but Cr McKinnon says overall debt “remains well within prudent levels”.
During the year the Council also received a credit rating of AA+ from Standard and Poor’s. “This is a tremendous outcome for the Council and will provide greater access to debt markets and improved pricing,” says Cr McKinnon.
“The challenging environment this year has highlighted the importance of strong stewardship of the city’s environment, facilities and finances.
“We also maintained rates at levels that are moderate by national standards despite significant cost pressures.”
The Annual Report shows the Council’s net worth at the end of the year was $6.2 billion - a $263 million increase from the previous year. The Council received total income of $416 million for the year, which included $226 million in rates, and spending totalled $400 million. The biggest spending ticket item was the environment ($126 million) which includes maintaining and protecting parks, botanic gardens, coastlines and open spaces, the city’s water supply, stormwater, and sewerage networks and landfills. The second biggest spending item was social and recreation ($88 million) which includes libraries, swimming pools, recreation centres, spotsfields, playgrounds and housing.