Auckland Council widens FY loss as expenses outpace growth in income
By Hannah Lynch
Aug. 30 (BusinessDesk) - Auckland Council, New Zealand’s biggest local body after its amalgamation of eight of the region's councils into one in November 2010, widened its full-year loss as growth in expanses outpaced income.
The loss widened to $233 million in the 12 months ended June 30, from a loss of $110 million in the eight months of the previous year that the amalgamated was in existence, the council said in a statement. Income rose 37 percent to $2.9 billion, with rates jumping 50 percent to $1.39 billion, and income from services gained 61 percent to $1.4 billion.
The council said the result included a $167 million charge relating to the unrealised cost of contracts to fix interest rates currently at historic lows and $83 million for asset impairment, legacy costs and provisions including weathertightness.
The council's assets increased by $1.5 billion as a result of new acquisitions and revaluations, even as slower economic growth across the city reduced property developer contributions and vested assets.
During the previous eight months, New Zealand's largest council began implementing the Auckland Plan, a 30 year ‘prospectus’ for the region, which includes a plan to identify stable housing, job growth, skills development and the environmental enhancement of South Auckland. A City Centre Masterplan, Waterfront Plan and Economic Development Strategy have also been adopted.
The council signed off of its 2012-2020 long-term plan, a ten-year plan totaling $59 billion for operational and capital expenditure.
"Auckland Council is now focused on transforming our organisation and we have defined how we will continue to improve our delivery," it said. "Successful transformation will free up the resources needed for us to deliver on the Auckland Plan, the strategy to create the world’s most liveable city, and also deliver value for money for ratepayers."
In October, rating agency Standard & Poor's affirmed the council’s AA long-term and A-1+ short-term issuer credit rating, with a ‘stable’ outlook. In April, Moody’s Investors Service gave the council an Aa2 credit rating, its third-highest, with a stable outlook.