Smaller net surplus: council's finances in worse shape than expected

A109 Light Utility Helicopter flight with mayor Gisborne City from the air in November 2023.

Gisborne District Council’s finances are in worse shape than expected, a new report shows.

A draft full-year summary financial report provided to GDC’s finance committee revealed that for the 11 months ending May 31, 2023, GDC had a net surplus of $24.95 million.

That was $9.7m less than expected in the year-to-date Annual Plan, due mainly to timing of capital grant funding, reinstatement emergency works and dividend revenue.

“The receiving of capital grants is dependent on when projects will be completed. Initially several projects were planned to be completed by 30 June 2023 but will now be completed at the beginning of 2023/24,” the report said.

“These projects are mostly roading projects (renewals and East Cape Road), equating to around $4.9m.

“Both the grants and the capital expenditure will transfer to next year, with no adverse financial impacts to council.

“The East Cape Provincial Growth Fund (PGF) project is expected to be completed in 2023/24 after delays caused by the two cyclones at the beginning of 2023. The programme of work is still on track with the overall three to five years PGF-approved programme.

“The funding assistance rate from Waka Kotahi ranges from 67-87 percent, where the remaining local share is left to council to fund. This equates to an unbudgeted shortfall of $2.6m.

“The remaining lower-than-expected net surplus is due to dividend revenue. The declared GHL dividend in September 2022, is unable to be paid to council ($1.9m less than expected against the year-to-date Annual Plan).”

Overall, total GDC revenue was $186m, $43m above the year-to-date Annual Plan.

“The higher-than-expected revenue is mostly due to Waka Kotahi operational grants for emergency works on roads,” the report said.

Total expenditure was $161.5m, $52.8m above the year-to-date Annual Plan — mostly due to roading emergency works.