9 February 2016

Rotorua council finances tracking favourably

Rotorua Lakes Council is tracking favourably against budget half way through the year with some significant changes in finance costs contributing to the positive position, chief financial officer Thomas Collé told councillors last week at the Operations and Monitoring committee meeting.

In his presentation Mr Collé said the council was operating within the funding set in the Long Term Plan and was forecasting to borrow $2 million less than planned by financial year end (30 June).

“We had said we would borrow $7 million for capital expenditure. We think that will more likely be $5 million.”

Since the council restructured some of its short term borrowings last year, it had achieved savings of about $1200 a day in interest costs.

The council’s cash surplus from operations at the end of December was $4.9 million – about $600,000 ahead of budget.

This was on the back of good revenue growth in fees and charges at Rotorua Museum and for consenting and open spaces, he said.

Chair Janet Wepa said while she was pleased with the finances, she wanted to see no borrowing at all and challenged Mr Collé and his staff to work on that and report back to the committee’s March meeting.

“There are certainly some areas we can improve on,” she said.

Cr Charles Sturt agreed.

“I think we’re on track due to the reduction of the capital spend but it’s time we signalled to you that between now and the end of the financial year, there should not be any fresh borrowing.” he said.

Mayor Steve Chadwick asked whether staff would be looking to retire more debt given the favourable position.

“After the (summer) construction period is complete, we will know whether we can achieve zero borrowing or debt retirement as this will be based on how much of our capital works programme is completed,” said Mr Collé.

• Read the agenda
• See the YouTube summary from Janet Wepa
• View the full meeting

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