Council Monthly Summary Financial Report. September 2017

Transcription

1 Council Monthly Summary Financial Report September 2017 Index Page Statement of Financial Performance 4 Reconciliation of the Accounting performance to the underlying Operational performance Notes on Statement of Financial Performance 5 Statement of Financial Position 6 Financial Ratios 6 Commentary on Statement of Financial Position 7 Capital Expenditure by Activity 8 Statement of Financial Performance by Activity 9 Commentary on Activity balances 10 Internal Loan and Reserve Account Balances

2 Statement of Comprehensive Revenue and Expenses For the Period Ended September 2018 YTD YTD Full Year Full Year Note Actual Budget Budget Forecast $000s $000s $000s $000s REVENUE FROM NON-EXCHANGE TRANSACTIONS Grants and Subsidies - Operational 01 3,460 2,307 9,227 10,987 Grants, Donations, Subsidies and Contributions - Capital 02 1,868 4,489 17,954 12,590 Other Non Exchange Revenue ,650 1,808 General Rates And Uniform Annual General Charge 04 4,197 4,116 16,465 16,622 Targeted Rates 9,482 9,482 37,927 37,927 REVENUE FROM EXCHANGE TRANSACTIONS Development and Financial Contributions Other Revenue 06 2,473 2,403 6,945 7,733 Targeted Water Rates ,646 2,469 Dividends ,833 1,227 Interest Received Other Gains/(Losses) - Profit on Sale of Assets Total Revenue 22,896 25,023 95,371 91,957 EXPENSES Employee Benefit Expenses 09 4,686 4,422 17,687 18,313 Expenditure on Operating Activities 10 11,505 11,281 45,353 46,368 Depreciation and Amortisation 11 5,123 5,275 21,098 20,899 Financing Costs ,199 2,136 Total Expenses 21,707 21,527 86,337 87,717 Net Surplus/(Deficit) before Taxation 1,189 3,496 9,034 4,240 Gains/(Losses) on Property Revaluation TOTAL COMPREHENSIVE REVENUE AND EXPENSES 1,189 3,594 9,425 4,501 Reconciliation of Accounting Financial Performance to Underlying Financial Performance For the Period Ended September 2018 YTD YTD Full Year Full Year Actual Budget Budget Forecast $000s $000s $000s $000s INCOME Total Accounting Income 22,896 25,023 95,371 89,957 Less Adjustments Capital Rates Revenue from Capital Grants & Subsidies 1,868 4,489 17,954 12,590 Other Capital Receipts Income from Assets transferred to Lease Revenue from Development Contributions Operations Funded from Reserves 0 (146) (584) (390) Total Adjusted Operating Income 20,824 20,362 76,723 76,605 EXPENDITURE Total Accounting Expenditure 21,860 21,527 86,337 87,717 Less Adjustments Finance Costs - Interest Rate Swap Revaluation Computer Expenditure Transferred to Lease Unfunded Depreciation (1,545) (1,966) (7,865) (7,303) Total Adjusted Operating Expenditure 23,379 23,493 94,202 94,994 Underlying Operating (Surplus)/Deficit 2,555 3,132 17,479 18,389

3 Notes to the Statement of Comprehensive Revenue and Expenses 01 Grants and Subsidies - Operational 92% of this revenue comes from the NZTA Subsidy. We recover 62% of costs on annual plan roading maintenance excluding emergency work. We recover up to 82% of costs on NZTA approved emergency work. The variance from annual plan is mainly due to higher expenditure related to roading emergency repair work due to flooding occurred in 2016/17 financial year which increases the NZTA subsidy amount. This also includes new funding received from NZTA for stock control. 02 Grants, Donations, Subsidies and Contributions - Capital This variance from annual plan is mainly due to the timing of recognizing grant funding for the HB Williams Memorial Library and Tairawhiti Navigations Projects. The forecast is significantly low compared to full year annual plan due to less uncertainity around grant funding for Olympic pool redevelopment project ($4m) and Lawson field theatre project ($1.7m). 03 Other Non-Exchange Revenue (Includes penalties, infringement fees, court enforcement fees, and other fees) The variance from annual plan is mainly due to decrease in court enforced fees and infringement fees received. 04 General Rates and Uniform Annual General Charge The variance from annual plan is due to collecting more rates than budgeted for as a result of increase in capital value and UAGC. 05 Development and Financial Contributions - Capital (Part of Capital Grants) The variance from annual plan is due to the number of development projects undertaken being less than expected at the time of setting the annual plan. 06 Other Revenue (Rent income, lease income, and all other fees and charges) The favourable variance from annual plan is mainly due to budget phasing for trade waste charges and waste levy income. 07 Metered Water Rates The variance from annual plan is due to seasonal fluctuation of water usage. 08 Dividends Under variance from annual plan relates to dividend receivable from GHL, as subsequently it was decided that a subvention payment will be paid by GHL in june The subvention payment will be presented in a different line on the statement of comprehensive revenue and expenses due to its nature which resulted in this under annual plan variance. 09 Employee Benefit Expenses This is higher mainly due to combination of higher than annual plan employee benefit expense and employee salaries related to capital projects that were not capitalized. 10 Expenditure on Operating Activities Roading maintenance and emergency work is over annual plan by $1.3m of which $1.2m relates to emergency work; $0.4m of network & asset management; $0.4m of environmental & traffic service maintenance that have been partially offset by savings across a large number of activities. YTD roading emergency work is $1.7m against a full year budget of $2m. This is due to emergency repair work done in early this financial year due to flooding which occurred in previous financial year. Total expenditure on operating activities is higher than planned mainly due to above and it is partially offset by number of reduced year to date expenditure, three waters and solid waste activities. 11 Depreciation and Amortisation The favourable variance from annual plan is due to actual depreciation being less than estim 12 Financing Costs Interest cost is lower than the annual plan due to lower than annual plan market interest

4 Statement of Financial Position As at Period Ended September 2018 YTD YTD Full Year Notes Actual Budget Forecast $000s $000s $000s CURRENT ASSETS Cash & Bank Non Exchange Trade and Other Receivables 02 3,406 4,401 17,070 Exchange Trade and Other Receivables 03 6,096 8,089 7,558 Inventories Investments Non Current Assets Held for Resale Total Current Assets 9,772 12,777 24,920 CURRENT LIABILITIES Deposits Held Trade and Other Payables 07 10,426 17,803 12,093 Employee Benefits and Suspense 08 2,562 2,054 1,859 Borrowings ,679 0 Provisions for Other Liabilities 09 5,618 5,618 5,618 Derivative Financial Instruments Total Current Liabilities 19,832 39,375 20,800 Total Net Working Capital (10,060) (26,597) 4,120 NON CURRENT ASSETS Property Plant and Equipment 11 1,969,131 1,968,889 1,981,722 Intangible Assets 12 3,648 3,904 3,562 Biological Assets 13 4,349 4,349 4,349 Investments 14 32,798 32,733 32,798 Total Non Current Assets 2,009,926 2,009,875 2,022,431 NON CURRENT LIABILITIES Borrowings 15 40,224 27,945 53,035 Employee Benefit Liabilities Provisions for Other Liabilities 16 2,339 2,339 2,338 Derivative Financial Instruments 10 1,819 1,793 1,820 Total Non Current Liabilities 44,609 32,304 57,419 Total Net Funds Employed 1,955,257 1,950,974 1,969,132 EQUITY Accumulated Surplus 401, , ,013 Special Funds 17 38,109 36,666 35,569 Revaluation Reserves 18 1,509,543 1,509,641 1,509,804 Total Equity 1,949,412 1,945,087 2,037,150 Financial Ratios As at Period Ended September 2018 Ratios Benchmark Ratio YTD Actual Net Debt as a % of Income <70% 47% Net Interest as a % of Income <10% 2% Total debt per capita (Population is based on 2013 census) <$1,700 $ 1,008 Net Interest as a % of rates Income <15% 1%

5 Notes to the Statement of Financial Position 01 Cash and Bank Westpac current account balance. 02 Non Exchange Trade and Other Receivables Includes rates receivable and other current receivables such as NZTA receivables. 03 Exchange Trade and Other Receivables Includes sundry debtors, prepayments and GST where receivable. 04 Investments Includes term deposits and there is no term deposit as at 30 September Non-Current Assets Held for Resale Includes assets held for resale. 06 Deposits Held Includes footpath deposits, bond deposits and theatre ticket sale deposit. 07 Trade and Other Payables Includes accounts payable, sundry creditors, audit fee accruals, GST where payable & other IRD payables, Waerenga o Kuri Liability. 08 Employee Benefits Liabilities and Suspense Includes holiday pay and other current and non current employee benefit liabilities. 09 Provisions for Other Liabilities Includes provision for various legal matters and other liabilities. 10 Derivative Financial Instruments Interest rate swaps. 11 Property Plant and Equipment Council's fixed assets. 12 Intangible Assets Includes computer software. 13 Biological Assets Includes the value of livestock and forestry. 14 Non-Current Investments Includes investments in GHL and CCTO. 15 Borrowings Includes borrowings from LGFA and other banks. Non-current portion has increased and current portion has decreased compared to annual plan due to adjustment to split the current and non-current portion is not done yet. 16 Provisions for Other Liabilities Includes non-current provisions such as Paokahu landfill and Waiapu landfill aftercare 17 Special Funds Includes various reserves such as depreciation reserves. 18 Revaluation Reserves Gain on assets revaluation.

6 Gisborne District Council Capital expenditure for the period ended September Sep Sep June June 2018 % Spent Activity Period 3 Period 3 Period 12 Period 12 By Sep 17 of Actuals YTD Budget YTD Full year reforecast Full year Budget Full year Budget $000s $000s $000s $000s Excluding Major Projects Community Lifelines 2,550 4,081 14,070 16,323 16% 51 Wastewater % 52 Stormwater ,404 1% 53 Water Supply ,134 3% 60 Roading 2,469 3,285 11,695 13,142 19% 63 Rivers Asset Management % Environmental Services & Protection % 42 Environmental Monitoring & Hyd % Internal Partnerships ,435 1,821 8% 05 Information Services ,435 1,821 8% Liveable Communities 356 1,731 2,611 6,923 5% 54 Solid Waste % 71 Facilities & Plant Management % 73 Community Housing % 75 Conveniences % 76 Reserves ,605 1,865 11% 77 Cemeteries % 79 Community Property Mgmt 26 1, ,066 1% 88 Arts & Public Places % 90 Pool Operations % 91 District Library Operations % Transformation & Relationships % 38 Civil Defence % Grand Total (Excluding Major Projects) 3,061 6,348 18,343 25,393 Comments Major Projects 30-Sep Sep June June 2018 % Spent Period 3 Period 3 Period 12 Period 12 By Sep 17 of Actuals YTD Budget YTD Full year reforecast Full year Budget Full year Budget Library Expansion ,704 3,704 25% The project is going to be completed by the end of June 2017/18. Lawson Field theatre ,000 1% The construction will start in March 2018 and most of the expenses will occur at that stage. Navigations ,374 2,375 20% Bulk of work will start later this financial year. Walkways and Cycleways ,273 1,870 0% The majority of work will take place later in this financial year. Titirangi Restoration % The majority of work will take place later in this financial year. Drainwise ,465 3,549 1% Majority of expenditure likely to incur from February April Wastewater Management Options % Waipaoa Flood Control ,742 1,658 32% Majority of expenditure likely to incur from February April Major Projects Total 2,071 4,158 13,019 16,633 Grand Total 5,132 10,506 31,362 42,026 Comments

7 Gisborne District Council Statement of financial performance by Activity YTD Actual YTD Budget Net Surplus/(Deficit) Revenue Expenditure Revenue Expenditure Actual Budget Support services 2,058,880 4,801,438 2,489,823 4,309,217 (2,742,558) (1,819,394) E&W Management - 7, ,012 (7,687) 6,012 Projects & Development 58, , , ,226 (136,819) 52,392 Urban Services Admin 1,109 66,028 4,173 88,284 (64,919) (84,111) Wastewater 1,947,590 1,469,255 1,791,715 1,714, ,334 77,026 Stormwater 733, , , , ,745 24,248 Water Supply 1,187,769 1,045,169 1,255,986 1,317, ,600 (61,220) Roading 6,809,667 7,445,817 7,221,368 6,149,135 (636,150) 1,072,233 Rivers & Flood control 669, , , , , ,949 Environmental services 405, , , ,967 (69,327) (130,179) Monitoring and Enforcement 3,250 89, ,397 (86,396) (87,551) Resource Consents 443, , , , , ,975 Construction Control 459, , , , , ,708 Environmental Health 420, , , , , ,897 Animal Control 848, , , , , ,528 Parking 132,555-30, , , ,251 98,303 Land and Soil Resources 386, , , ,769 92, ,816 Biosecurity 366, , , , , ,248 Water and Coastal Resources 530, , , , , ,588 Environmental Monitoring & Hyd - 194, ,394 (194,653) (219,394) Property 407, ,283 1,320, , , ,395 Parks & Community Pty Mgmt ,727-65,757 (145,510) (65,757) Solid Waste 1,362, ,855 1,314, , , ,583 Facilities & Plant Management 1, ,919 3,000-7,224 (103,086) 10,224 Theatres 797, , , , , ,380 Community Housing 315, , , ,417 93,355 45,034 Conveniences 265, , , ,356 76, ,932 Reserves 1,161, ,519 1,345, , , ,645 Cemeteries 108,911 62, ,998 58,888 46,729 42,110 Arts & Public Places 1, ,590 40,290 1, ,300 Pool 322, , , ,202 38,268 14,210 District Library Operations 510, , , , , ,759 Commercial 41, ,450 31, ,431 (68,920) (103,764) Civil Defence 135, , , ,907 16,435 33,121 22,895,781 21,707,231 25,023,387 21,527,141 1,188,550 3,496,246

8 Commentary on Statement of Financial Performance by Activity Support Services Finance is the entity that contributes mostly to this higher than annual plan deficit. Income is less than annual plan due to budget phasing for GHL Returns. Expense is higher than annual plan due to phasing of interest recovery on internal loans. Projects and Development Income is less than annual plan due to less number of capital projects undertaken compared to what was estimated in annual plan. Salary cost is also higher than annual plan. Wastewater Income is higher than annual plan mainly due to budget phasing for trade waste charges. Expenditure is less than annual plan mainly due to phasing of interest on internal loans. Stormwater Expense is less than annual plan across number of expenses; repair & maintenance by $140k, Investigation by $53k, interest on loan by $92k due to phasing of interest on internal loans and salary contra is higher than annual plan by $33k which reduces the actual expenditure. Roading Income is less than annual plan mainly due to less Capital income received from NZTA. This income correlates with the spending on capital projects. Expense is over annual plan by $1.3m due to emergency repair work done as a result of the flooding event occurred in last financial year. Environmental Services Expense is less than annual plan by $50k due to decrease in salary for environmental services & planning. Animal Control Income is higher than annual plan due to stock control income receved from NZTA which does not have a budget. Facilities & Plant Management Plant recovery charges which reduce the expense were not accounted by end of september. That is the reason for this over annual plan variance in expenditure. This is a timing issue. This was done in October 2017 to reflect the true picture. Reserves Income is less than annual plan due to delay in capital grants for Junior Cycle park project. Main reasons for the less than annual plan expenditure being repair and maintenance is down by $100k and interest on loan is down by $100k due to phasing of interest on internal loans.

9 Internal Loan and Reserve Account Balances as at 30 September 2017 Internal Loans 1. The current level of internal loans is $71m. This represents those activities that have capital projects that are funded by internal loans. The practice of using internal loans to fund capital projects and use an internal central treasury function began in The basis of the decision was to reduce interest costs to Council, by minimising external debt levels. Prior to this practice Council had a very rigid approach to cash flow management with specific pots of cash on deposit to reflect actual special fund reserves and Council borrowing funds for capital projects. 3. Council refers mainly to the level of external loans or public debt. The external loans reflect the amount of money Council currently owes externally i.e. to banks, or other funding agencies. 4. Principal repayment has decreased the internal loan balance as at 30 June 2017 by $273k with little capital expenditure being loan funded as at period ended 30 September Sep Jun-17 Movements $000s $000s $000s Finance 14,114 14,115-1 Information Services 3,631 3, Civic Construction Control Rural Fires Wastewater 19,861 20, Stormwater 5,318 5, Water Supply 1,333 1, Solid Waste 5,339 5, Roading 5,043 4, Rivers Asset Management 3,132 3,132 0 Flood Control Schemes 1,468 1, Wainui Foredune Protection Rivers Control & Land Drainage Property Management Facilities & Plant Management Theatres Leased Mgd &Strategic Invt Pty Conveniences Reserves 4,450 4, Cemeteries Community Property Mgmt 4,683 4, Arts & Public Places Pool Operations District Library Operations Airport Churchill Park ,557 70,

10 Special Funds Reserves 5. Special funds reserves are a component of public equity and represent a particular use to which that part of equity has been assigned. Special fund reserves may be legally restricted or only used for the purpose created by Council. 6. Reserves do not represent cash that is available to Council. The decision to use the funds in a reserve account results in additional external borrowing. Correspondingly cash received and transferred to a reserve account results in a reduction in external borrowing. 7. The special reserves relate mainly to specific projects, for example the Library Extension Fund was the result of specific bequests of Mr J Green ($1,200k), Hannah Dunlop ($140k) and Jessie Iris Jefferies ($12k). Development Contribution Reserves and Quarry Rehabilitation can only be used for their stated purposes. 8. Interest on reserve balances is set quarterly at the 90 day Bank Bill rate. No adjustment is included for treasury related operational costs. 9. The interest rate charged on deficit balances is set at the weighted average cost of external borrowing (including credit margin and other related costs). 10. Council may determine not to pay interest on specific reserve balances or to pay interest at a reduced rate. 11. Interest may be notionally received and allocated to the specific reserve account providing the funds or through the related activity income/expenditure accounts. Special Funds 30-Sep Jun-17 Movements $000s $000s $000s Capital Development Fund 2,437 2,437 0 Rates Postpmt Fidelity Reserve GHL Forestry Reserve -2,781-2, Civic Environmental Policy Planning Civil Defence Wastewater Stormwater Water Supply Roading Rivers Asset Management Property Management 1,489 1,489 0 Reserves Pool Operations District Library Operations 1,570 1, ,941 3, Depreciation Reserves 12. There are a number of depreciation reserves. Each category has been established to reflect the asset category, depreciation and capital funding. 13. The Asset Management System Implementation Project being undertaken at Council aims to improve Council s asset management information. This may impact on Council s depreciation expense and subsequently our depreciation reserves.

11 Depreciation and Revaluation Reserve 30-Sep Jun-17 Movements $000s $000s $000s Asset Revaluation Reserve 1,509,543 1,509,543 0 Support Services 3,258 3,261-4 Stormwater Water Supply 21,780 21, Wastewater , Solid Waste 2,010 1, Tairawhiti Roads 1,960 1, Flood Control Community Housing 3,448 3, Property Pool Operations 1,156 1, Library Museum ,375 33,729 1,646