Rotorua council ends financial year in strong position

Rotorua Lakes Council has ended the financial year in a strong position with increased cash on hand and debt reducing.

Chief Financial Officer Thomas Collé says the financials have yet to be finalised but the organisation had ended the 2015/16 financial year in a solid position and well-placed for the next year.

Council’s operating result was better than budgeted for the financial year with both capital expenditure and debt below budget, he says.

Strong growth in revenue from fees and charges – particularly in consenting and from museum trading – have contributed to a sustained strong performance across council.

2015/16 highlights:

• $3.3 million increase in cash on hand

• $1.8 million in debt retired

• Debt total $165.6 million at year-end

• $12 million improvement on the Long-term Plan

• No borrowing forecast for next year

Mr Collé provided a verbal update about the year-end financial position to councillors at today’s Operations and Monitoring Committee meeting, additional to the agenda report which outlined the financial position as at the end of May.

Mayor Steve Chadwick says the strong end-of-year position reflects prudent financial management which has reversed previous trends marked by council debt doubling in the six years to 2013.

“We’re now able to pay off debt for the second consecutive year, which is fantastic, and overall this is a very positive result which should give both Council and the community great confidence as we head into the next financial year.”

A new framework was introduced in December 2013 to move the council to a stronger financial position. A review of finances prior to that had concluded that while debt remained within acceptable limits, it had been on the increase and was higher than it should be.

“We needed to take decisive action to turn the situation around,” Mayor Chadwick says. “As well as unsustainable increasing debt levels, there had been a pattern of unsustainably low rates increases, costs continued to increase in despite constrained revenue and council was borrowing to fund operational costs,” the mayor says.

“Independent reviews assessed the situation and set us on track towards a new financial framework which has resulted in re-setting rates rises to realistic levels, reduced spending and operating costs and improved financial reporting.

“Along with some key decisions regarding the likes of the airport and projects which are no longer needed, it has seen us turn things around to ensure we’re operating sustainably. And that was part of this Council’s commitment to residents – ensuring we had an efficient and effective organisation that could deliver on the community’s aspirations and expectations,” Mayor Chadwick says.

ENDS

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