Prudent approach at Council results in $6.7 million budget surplus

A prudent approach to fiscal management has resulted in a budget surplus of $6.7 million, earning the Far North District Council praise from Audit New Zealand.

The council’s operational expenditure during the 2010-11 financial year was $103.145 million against income of $109.911 million, giving it a net operating surplus of $6.765 million.

Chief executive David Edmunds said that, whilst the surplus was very pleasing, it was less than the budgeted $14.5 million due to a number of factors including:
- accounting standards which required the council to record a reduction in land values as an expense of $6.6 million
- the transfer of assets from Far North Holdings as income of $5.2 million, even though no cash was received
- increased provision for bad and doubtful debts at a cost of $3.8 million.

Auditor John Scott told councillors last month that the council had adapted to tough economic conditions during the year by cutting its cloth according to its budget.
“I think the council has been conservative which is good,” Mr Scott said.

Mayor Wayne Brown was pleased that the council had reduced debt from $112.4 million to $109.3 million at a time when the Government had borrowings in the billions.

He said the council could take pride in getting two major capital projects off the drawing board during the year.

Construction of the Te Ahu Centre in Kaitaia finally got underway in late 2010 after years of planning.
He was pleased to note that 50 contractors had worked on the project and been paid $8.4 million at the end of June.

“This represents a massive boost to the economy at a time when jobs are scarce.”
Kaikohe people also had plenty to celebrate with the first section of the Pou Herenga Tai Twin Coast Cycle Trail opening in May.

“This project has already created jobs for dozens of young, unemployed people, but the real economic benefits for the district are still ahead of us.”

Mr Brown thanked staff for preparing the report which councillors adopted on October 27.

“A lot of work has gone into this and we should note that. Well done.”

An electronic copy of the report has been posted on the council’s web site. Copies are also available to the public in compact disc format.

The council has chosen to save money and reduce its impact on natural resources by not printing the full Annual Report.