Council heads for $2m rates surplus

Personnel costs were $1.2 million below budget.

The Tauranga City Council is heading towards a rates surplus of $1.5 million-$2 million by the end of this month.

Its financial position at the end of May showed that day-to-day operating budgets were expected to return a surplus of nearly $6 million by the end of the financial year in five days.

The favourable outcome was outlined to councillors yesterday by chief financial officer Paul Davidson, who said operating revenue was running at 4 per cent above budget forecasts while operating costs were down by nearly half a per cent.

Revenue was ahead of previous years when the recession led to big drops in fees collected from developers and builders. The market has substantially recovered in the past 12 months.

Mr Davidson's financial summary to the end of last month also highlighted the impact of the new council wielding the knife on capital projects.

He said capital spending remained below budget, with only 51 per cent of planned works spent by May 31. The figure for the same time last year was 58 per cent.

The capital works that went were overspent by $1.8 million, of which $1.3 million was on information and communications technology upgrades.

Councillor Clayton Mitchell said the council was heading the right way, with the debt to revenue ratio down 28 per cent. His concern was the $104 million Southern Pipeline wastewater project and where it would leave the council in future.

The council's financial performance to May 31 showed development fees were running $550,000 ahead of budget - up 4 per cent to nearly $13.3 million.

Personnel costs were $1.2 million below budget at $31.8 million for the 11 months. The savings were from delays in filling positions, with most vacancies covered by contractors and consultants.

Baycourt and city libraries revenue was likely to be $300,000 below budget.