Favourable result reported at Finance Committee meeting

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Thursday 6 July 2017

Hamilton City Council’s financial performance is showing a favourable result against its 10-Year Plan Balancing the Books measure after the first 11 months of the 2016/17 financial year.

The Council’s Finance Committee met this week and received a monitoring report to 31 May 2017 which reported an operating surplus of $44.5M for the period, a $34.1M increase in the year to date budget. While the result was pleasing, committee members noted the surplus needs to be considered in context, with a number of factors contributing to the result.

Finance Committee chair Garry Mallett says the report summarised the Council’s financial performance against a range of measures.

“The report showed we are managing our finances well, but it doesn’t mean we suddenly have a pot of money,” Councillor Mallett says.

“Against the Council’s  ‘Balancing the Books’ measure we are showing a surplus of $15.6M, an improvement against budget of $13M, largely due to additional revenue from capital projects ($6.6M), higher development contribution revenue ($4.5M), and lower finance costs ($2.8M),” he says.

“This is the key measure which Council has reported against since 2012.

“Against the Local Government Balanced Budget measure, (which does not include development contributions as revenue), we are showing a small deficit at 31 May 2017 of around $41,000.

“As at 31 May we have also spent around $12M less than budgeted for the period on capital expenditure, an underspend which has had a favourable impact on our debt to revenue ratio and our finance costs,” he says.

“In simple terms, the Council is tracking well against budget at this point in time, but we must be aware of emerging costs signaled in the report which are not yet included in this result, such as repairs to facilities or weather-related subsidence issues,” Cr Mallett says.

As at 31 May 2017 the Council was fully compliant with all Treasury Management policy measures and had a debt to revenue ratio of 164 per cent against an annual target of 198 per cent. Current debt was reported at $348.8M against an annual budget of $404.1M.

The full monitoring report is available on the Council’s website.

Page reviewed: 18 Aug 2017 2:13pm