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Annual Report adopted

AnnualReport 1 copy

Wairoa District Council elected members adopted the 2021/22 Annual Report at an extraordinary Council meeting last Monday.

The Annual Report 2021/22 provides information on Council’s financial and non-financial performance against budgets and targets determined in both the Long-Term Plan (LTP) 2021-2031 and the Annual Plan 2022.

The draft annual report had previously been presented to the Finance Audit and Risk Committee on 27 September 2022. The Committee examined the draft annual report in detail and, acknowledging that the audit of the report was in progress, recommended its adoption by Council subject to any audit and editorial adjustments.

The Annual Report showed Council is in a strong financial position, with low debt.  

A total of 36% of Council’s income was derived from rates, compared to 41% in 2019. External subsidies and grants amounted to 57% of Council’s income, compared to 47% in 2019.

The subsidies and grants attracted by Council make up a greater proportion of income when compared to previous years and indicates that, although there can be a need for Council to co-contribute to projects, ratepayers are receiving more bang for their buck. Examples are the Provincial Growth Fund funding for the Te Wairoa e Whanake project, which contributes 76 cents of external funding for every $1 of cost in the construction phase. Department of Internal Affairs (DIA) funding covered 100% of designated Three Waters project costs, including paying the overhead costs for the project management staff and their work vehicles/IT equipment etc. In addition, Waka Kotahi NZ Transport Agency generally pays 75 cents for every dollar of road repairs, which alleviates the pressure on ratepayer funds. After a challenging time for the district, with weather events causing roading issues, from potholes to slips and dropouts, Wairoa District Council has maintained this high funding ratio, whereas other Councils throughout the country have had the funded percentage of spend reduced.

Over the year, the Council spent $32,522 million on running the district, which includes delivery of parks and reserves, clean drinking water, sewerage and stormwater, regulatory functions, waste services and community services such as the i-Site, Gaiety Theatre, library and digital hub. 

The net surplus (excluding revaluation gains) was $10,347 million. This includes millions of dollars in subsidies and grants that were predominantly used to construct new assets. These new assets are not an operational expense, but form part of the non-current assets in the Statement of Financial Position.

The Funding Impact Statements (FIS) show the relationships between subsidy revenue and expenditure. The whole of Council FIS shows the total operational surplus, from ‘day-to-day’ operational funding less operational expenses of $4.8 million was spent on assets. It also shows that of the total subsidies and grants received, $14.5 million were for capital projects. The operational surplus excludes the non-cash expense of depreciation, which contributes to reserves set aside for asset renewals. These reserves are a component of equity. The rates set each year cover a component of this depreciation (asset renewal) cost. The operational surplus in the statement of financial performance includes depreciation.

The individual activity FIS show how water grants (from the DIA stimulus package) were spent on water supply and wastewater projects, including Ōpoutama Wastewater Upgrade, the Toby Replacement/Smart Meter Programme, the Wairoa Wastewater System and Treatment Plant Upgrade, Achilles Street Water Main Replacement, Māhanga Water Supply Improvements and a number of bespoke regional projects. The $11 million DIA programme was extended to 31 December 2022, however, Wairoa District Council has completed the majority of the Three Waters projects funded by this significant grant.

Elected members also noted the impact of the March weather events on Council’s operations, with the transport network asset value reduced by the estimated $24,843 million cost to repair. However due to increasing costs of both labour and materials, a revaluation of the total asset network resulted in a $9.9 million revaluation gain. This non-cash revenue forms part of the $20,261 million total surplus.

As the next Annual Plan is prepared, Council officers are challenged to look at cost saving initiatives to improve efficiencies against rising costs, while maintaining levels of service as per the LTP.

Elected members commended staff for the high quality of reporting and for bringing the report in on time. Wairoa Mayor Craig Little acknowledged the capability of the finance team in completing the extensive report within the reporting timeframe.

The Annual Report is available here and the Summary Annual Report is available at this link.

9 November 2022

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