The council collected $96.9 million from ratepayers last year. Photo / Getty Images
The council collected $96.9 million from ratepayers last year. Photo / Getty Images
Rotorua Lakes Council collected $96.9 million from ratepayers last year, finishing with a lower than hoped for surplus and total debt of $228.2m.
Many congratulations were offered at the council meeting on Thursday as Rotorua Lakes Council adopted its Annual Report for 2019/20.
In a report prepared for the meeting, council business performance manager Pete Kearney said the council had "again shown consistent financial management" in the 2019/20 financial year.
The council had retained its AA- credit rating and achieved a net surplus of $4.8m, having budgeted for a $20.1m surplus.
Kearney's report acknowledged the economic and operational challenges of Covid-19.
"[The] council continued to deliver business as usual ensuring essential services were maintained with minimal to no impact to levels of service."
The council had also faced challenges in the areas of wastewater, sewerage, water, loss of event-driven fees, inner-city security, legacy electricity costs, depreciation and reduced parking revenues, his report said.
However, those pressures were mitigated by higher rates revenue due to growth in the district and other cost-saving measures, Kearney said in the report.
Annual reports were typically presented around October each year, in line with legislation requiring the adoption of annual reports within four months of the end of the financial year.
The council took advantage of Parliament passing legislation in August to allow a deadline extension for organisations that had a June 30, 2020 balance date.
In the meeting, chief financial officer Thomas Colle said the year had been "incredibly difficult".
"We faced Covid … our communities, as a whole, ground to a halt and yet we continued on through that, and as a result we did face pressures to some of our revenues."
Rotorua Lakes Council chief financial officer Thomas Colle. Photo / File
Capital expenditure was also impacted, in part because of the disruption lockdown caused to construction, he said.
Some capital subsidies had not yet been received due to those delays, and the council had received $20m from the Provincial Growth Fund in late June that had been received from an accounting perspective in 2019/20, but would be "recognised" in the 2020/21 financial year.
"It's just a technical aspect of it," Colle said.
Council debt had decreased by $3.3m which was "a fantastic outcome".
The budgeted change was expected to be a $42.8m increase.
Colle said the council's debt limit was 225 per cent of its revenue, but the council's position was 144 per cent, which put it "well within the limits".
The cost of interest was capped at 20 per cent, and the council was at 5 per cent. Liquidity - the availability of cash on hand - was required to be at a minimum of 110 per cent, and the council's was at 136 per cent.
"We are leveraging our borrowings well, we have plenty of headroom to respond to our community's needs and we have the liquid assets available."
The council's financial 'headroom'. Photo / Screenshot / Rotorua Lakes Council
Colle said it was "overall a very pleasing result".
Councillor Reynold Macpherson said there was "no doubt" it was a positive operating result and said he appreciated council officers' efforts.
He asked if the increased revenue was due to rates rises, but Colle said those did not impact the result for the 2019/20 financial year, but would impact 2020/21, and the growth was due to a rise in the underlying capital value of properties.
Macpherson was also concerned that a written clearance of the Annual Report's audit had not yet been received, but Colle said a verbal clearance had been received and it was "normal practice" for the written audit clearance to be received after the Annual Report had been adopted by the council.
"You can still reserve your right to vote with enthusiasm, Councillor Macpherson, this is the usual process," mayor Steve Chadwick, chairing the meeting, said.
Macpherson said he would "try to contain his enthusiasm".
Chadwick said the Annual Report was an "outstanding result" and knowing there was "headroom" in the council's books was "very reassuring".
She congratulated Colle.
Deputy mayor Dave Donaldson said it was "excellent" and congratulated the executive leadership team, noting the "headroom may shrink" in the coming years, due to future challenges.
The report was adopted with all in favour, except Macpherson, who noted his abstention was "with enthusiasm".
• The Rotorua Lakes Council 2019/20 Annual Report can be accessed at the council website.
ROTORUA LAKES COUNCIL - ANNUAL REPORT 2019/20 - by the numbers
$136.8m - total income $96.9m - income from rates $40m - income from other sources $4.8m - net surplus $20.1m - budgeted surplus $228.2m - total debt $21.7m - debt increase $21.5m - amount borrowed $11.5m - cash on hand $3.3m - net debt decrease - borrowings less total cash
