QLDC reports significant surplus

Queenstown Lakes District Council is reporting a surplus of $68 million for the 2016/17 financial year, according to its 2017 Annual Report.

This is significantly higher than the budgeted surplus of $21.5m and up from last year’s surplus of $39.5m.

QLDC General Manager Finance and Regulatory Stewart Burns explains that while it may seem like a large number, the surplus reported is not a profit of any kind. “The law relating to local government finances requires all councils to aim to cover their operating costs with operating revenue. This operating revenue is made up of various user charges, lease income, infringement fees and rates etc. QLDC achieved this for the 2016/17 year with an operating surplus of $3.1m.”

The reported surplus is largely due to two factors that were unanticipated in last year’s annual plan.

Over the course of the year some QLDC assets increased in value by $35.5m. The bulk of this increase relates to unrealised gains relating to the annual revaluation of Council owned investment property. In particular, the increase in value for the Lakeview site as a result of zoning changes.

QLDC also received $29.3m of capital revenue; this is revenue required to fund QLDC capital expenditure (construction of infrastructure) rather than operating expenditure. It includes development contributions, vested assets and capital grants and subsidies.

Together these two factors contribute $64.7m or 95% of the reported surplus for 2016/17.

ENDS

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