Borrowing for another year

Council is planning to borrow $152,815,085 for the coming financial year, comprising $59,149,985 of new debt for projects contained in the annual plan, and $90m for refinancing maturing external debt.

Council's Finance and Risk Committee also approved borrowing $3.565m for capital projects continuing from the last financial year, $100,000, overdraft for the council's day to day cash management during its meeting on Monday.

Tauranga City Council.

The borrowing is secured against the rates revenue of the Council. Details and timing of the borrowing is delegated to the CEO Garry Poole and chief financial officer Paul Davidson.

The city's overall net debt is forecast at $397.4m at June 30, 2015, as per the annual plan – an increase of $30m from the debt at June 30 2014 of $367.4m.

The draft annual plan adopted by the Finance and Risk committee shows an unaudited rates surplus of $1.8 million, which chief financial officer Paul Davidson says is in line with forecasts.

The asset development revenue is $4.8m above budget and $7.6m above that of the 2013. This includes development contributions and other contributions to capital funding.

A sign of a reviving construction industry is development contributions to council are $14.7m compared to the expected $13.9m, and last year's total of $9.2m.

Net debt is $365m compared with $377m last year.

Paul says the reduced debt is mainly a result of higher development revenue and lower than planned capital delivery, like holding back on further southern pipeline construction.

The city's operating revenue for the just completed financial year is $171 million against a budget of $168m.

The $3.5m difference is driven by above budget results from water, rates, interest revenue, and other revenue across the council organisation – consistent with reports to the finance and risk committee during the year.

Spending was also over budget, by $6.4m at $174m. While personnel and finance costs are below budget, depreciation is slightly above budget and other expenses exceed budget by $7m.

Key changes in other expenses are asset adjustments, write offs, impairment and gain loss on sales totalling $5.9m which are not budgeted.

Their impact resulted in an operational deficit of $2.4m, compared with a $2m deficit in 2013.

After asset development and other movements the operating surplus is $28.3m which compares with $28.1m in 2013.

Paul says the audited annual report is expected to be adopted by council on August 28. Most changes to the draft are expected to be in the form of notes on the plan rather than changes to figures.

You may also like....

25 comments

Overit

Posted on 30-07-2014 17:42 | By overit

OMG.


What

Posted on 30-07-2014 19:56 | By Capt_Kaveman

part does this new council not understand about Managing dept, so in their 1st 6 months they want to rack up more, well this lot are no good time to kick them all out next time


Budget

Posted on 30-07-2014 21:42 | By DAD

I thought the newly elected Council was going to do big cutbacks and reduce the Debt!


wow

Posted on 31-07-2014 01:14 | By jed

this is major debt!!! maybe council thinks the ratepayers are rich suddenly?


Confusing isn't it?

Posted on 31-07-2014 08:43 | By The author of this comment has been removed.

A quote "Oh what a tangled web we weave, when it is our mission to deceive" Just tell us the truth, plainly and simply Paul.


.

Posted on 31-07-2014 08:59 | By Sambo Returns

just another day in a "glass tower", so we have an unaudited rates surplus of 1.8m, and rates still go up 6.5%, just goes to show all is well in the halls of power.


Over 1 million a week on..

Posted on 31-07-2014 09:39 | By Bronzewing

Rotorua has stopped all capital works for 5 years to cut their debt. Only essential works and renewals. This bunch are spending over a million dollars a week of borrowed money on new work and nearly 2 million on refinancing debt. When will sanity prevail??? The lunatics are definitely running the asylum. When are the public going to realise that the elected members have no say in how the madness is managed?


Wasteful spending?

Posted on 31-07-2014 12:43 | By jimmyant

I see that half the fence along the foot path on Devonport Road that adjoins Memorial park has been replaced with some very expensive galvanised barriers. The old fence didn't look too bad - maybe some new wire mesh would have been the best option instead of the almost outrageously expensive looking replacement - particularly when the council are borrowing money to do these things!!


CRAZY

Posted on 01-08-2014 08:08 | By marcus

This is seriously madness you are suppose to stop borrowing and reverse it. Seriously do the citizens a favor and leave a nice taste reigning it in not blowing it out to beyond bearable for the future to pay interest on. BUDGET and pay debt off people!


Knowledge of the facts is king

Posted on 01-08-2014 12:10 | By ROCCO

Must be plenty more comments on this horrible financial revelation please post them up for public edification.


What is the debt relly?

Posted on 02-08-2014 18:47 | By YOGI BEAR

Last year it was said to be $450m so add the increases of $63m above and we get a cool $500m+ just like that. I know we are in a different year to the election, but perhaps the memory fades quickly until a few months before next election I guess. Business as usual by the looks.


Outrageous Spending on Consultants

Posted on 03-08-2014 09:41 | By Aime

What about the outrageous spending that is happening on IT consultants. Getting rid of in-house expertise at a huge cost to contracting in of consultants at huge hourly rates. This has been tried before in Council's only to be deemed a failure and then the rehiring back of in-house staff. How about spending $1000.00 on desks, latest Ipads,cellphones and other IT equipment that supposedly the "councilor's need". Maybe this area of spending needs a long hard look at.


Auckland fate

Posted on 04-08-2014 02:04 | By Crash test dummies

Not enough money left on the "Merry go round" just a little more debt per ratepayer than us ... But oh so quickly you catch up. Usual plan is: employ more bureaucratic officials on ever increasing salaries, crazy projects, huge costs but don't want to increase rates. Only option left, borrow more every year. But sooner or later that to must end when debt gets to high, Auckland is there now.


Missed opportunities

Posted on 04-08-2014 21:36 | By Mike Lehan

It was nearly in your grasp but you chose not to take advantage. I question this councils desire to meet rate payers expectations. I would swear that the promises that they won the election on was around reducing debt and the burden on rates, looks like the opposites happened, another missed opportunity.....


Mike Lehan

Posted on 06-08-2014 12:46 | By YOGI BEAR

You rightly question Councilors motivation and the answer is glaringly obvious, they have no stomach to do what they must, what is needed and now. Debt reduction is an absolute necessity to reverse the effects of past misbehavior in the treasury department.


Net Debt

Posted on 07-08-2014 08:43 | By Paul Melhuish

Has anyone writing here bothered to notice that net debt has reduced by 12 million or are you all so blinded by your cynical views to notice it? The debt is being worked on…give it a bit of time and you may have to eat your words. Some positivity and less whinging would be helpful.


Lets celebrate...

Posted on 08-08-2014 00:54 | By GreertonBoy

The debt has reduced by $12 million.... yay, yippee... that's all right then, sure, go ahead, now you can borrow $150 million more... Pfft... the rich get richer and the poor just keep paying.... always some getting rich from us mere mortals toil!


Net debt

Posted on 09-08-2014 01:32 | By Crash test dummies

that is a false hood, the net debt goes up and down by $50 million twice a year. That is because in Feb and August escheat the rates come in. The real debt is going up by some $63m in the next twelve months. That's what has been reported already. you need to rethink the numbers here.


The debt hole is big...

Posted on 09-08-2014 13:15 | By Paul Melhuish

and goes back much further than this current council. It will take time to show real reduction signs The city does not simply stop and allow us to wind the debt down. It is growing rapidly and requires infrastructure amongst other things to be part of this...this all costs. Give it time. If it still looks as grim in another 18 months, by all means open fire with criticism.


what it means

Posted on 09-08-2014 20:53 | By Crash test dummies

Standard and poors say the Councils numbers don't add up. They are running out of cash, running out of debt to borrow to shore up the bank account to keep the facade that all is fine and dandy. However in Auckland we have managed to get ahead of Tauranga, the cash crises is here already. Look out in Tauranga, our fate is coming hour say .... More rates, more debt the future,


Paul M

Posted on 09-08-2014 22:51 | By Crash test dummies

It is obvious that the current councilors did not create the current huge debt mountain. But they decided that they would do something positive about reducing it. We have yet to see any meaningful change yet from councilors of TCC itself even. Result debt is still increasing, rates will follow like night follows day ......


Wow

Posted on 15-08-2014 04:55 | By Crash test dummies

Another $63 million in new debt, obviously the spending is just continuing relentlessly, never ending even after a change of the guard.


Not again!

Posted on 23-08-2014 08:58 | By Baystyle

Report card to new councillors: FAIL!


Been n gone

Posted on 23-08-2014 15:20 | By Crash test dummies

Last week borrowed $63 million, this week told that Route K debt of $62 million to be repaid, so that means spent before got it, typical, just a shift of a $$ and spent it.


Overit

Posted on 27-08-2014 15:51 | By overit

Paid my rates today. They have gone up $50. Where will this end?? If the ex-Accountant female Councillor reads this, I voted for you because you said you were prudent with numbers. Dont think much so far.


Leave a Comment


You must be logged in to make a comment.