Annual Report 2007

The Queenstown Lakes District Council is entering a period of strong delivery with a number of key projects delivered, rolling out or set to do so, QLDC chief executive Duncan Field said in his commentary for the 2007 Annual Report.


The council will be asked to adopt the report at the last full council meeting prior to Saturday’s election. The council’s independent auditors were expected to give the report the necessary sign off on Friday.


“The 2006/07 year has been a big year,” Mr Field said.


Highlights included the Queenstown Aquatic Centre, the purchase and establishment of a community trust to manage the ownership of the Arrowtown Buckingham Street cottages, progress of the Lakeview project, Wakatipu kerbside recycling, high density residential plan changes and completion of the District Plan, the purchase of CivicCorp and Alpine contracts to create transparent, Council Controlled Organisations, adoption of a procurement strategy to deliver infrastructure projects and a marked increase in the delivery of community capital works, including toilets, tracks, trees, walkways and bridges and implementation of the disposal of wastewater to land at Wanaka, Project Pure.


Once again the council and its subsidiaries - the Queenstown Airport Corporation, the Queenstown Events Centre Trust and Lakes Environmental Limited - recorded a satisfactory financial result for the year ended 30 June, 2007, QLDC finance general manager Stewart Burns said.


“The council recorded an operating surplus of $17.7m against a budget of $33.1m. As planned, this surplus will pay for part of the capital works programme and repay debt,” Mr Burns said.


Revenue was below estimate by $10.4m for the year ended 30 June, 2007. The following major items contributed to this variance:


Grants and subsidies were $2.02m below budget for the year due to lower than expected subsidisable capital expenditure in the roading activity.
Property sales were $2.14m above budget due mainly to the timing of section sales at Scurr Heights in Wanaka.
Development contribution income was below budget by $6.15m for the year principally because of the timing of revenue recognition in this area.
The actual gain on revaluation of investment property was $1.43m as opposed to the estimate of $5.08m.
The key operating income represented by user charges and rates was slightly ahead of budget by $0.1m for the year.


Operating expenditure was above estimate by $5m for the year ended 30 June 2007. The following major items contributed to this variance:


The main component of the variance relates to $2.4m of roading project expenditure which was classified as capital expenditure within the budget but which has been charged as an operating expense for the year. This is not an over-spend as there is budget provided to cover it. There is also $0.4m of similar variance within parks and reserves operating expenditure for the year.
Property operating expenditure includes a charge of $0.85m relating to the cost of development property sold during the year. This is not additional cost but rather a change in accounting treatment with the compulsory introduction of international financial reporting standards (IFRS) for the first time this year.
Maintenance costs for reserves and roading were above budget by $0.6m due to higher than expected cost escalation movements for the maintenance contracts for the year.
There was $0.5m of unexpected legal costs incurred during the year in relation to the due diligence required for the acquisition of CivicCorp Limited and the resolution of the contractual dispute with Alpine Infrastructure Management Limited.
Depreciation expense for the year was $0.2m above budget.


“Most of the cash portion of this variance has been offset by higher than expected user fees, lease and sundry income which were $0.4m above budget for the year,” Mr Burns said.


It was evident that the pace and challenges of growth would continue, Mr Field said.


“As we now approach completion of some long standing community expectations like kerbside recycling, we are preparing to embark on others such as public transport, walking and cycling strategies, Wakatipu wastewater disposal to land, the Wanaka Aquatic centre and community centres for both Queenstown and Wanaka,” Mr Field said.


That was in addition to an investment programme in infrastructure which was larger than ever before