Tauranga development spike nets extra cash

Tauranga's growth surge has lifted development fees collected by the city council to $14.7 million - up 60 per cent on the previous year.

The big spike in contributions from builders and developers to help pay for city infrastructure was disclosed to the council yesterday.

Chief financial officer Paul Davidson, summarising the council's draft annual report to June 30, said development contributions increased by $5.5 million on the previous year and were $800,000 ahead of what the council expected to collect for 2013-14. Council debt at June 30 totalled $365 million - down $12 million or 3 per cent. The reduction in debt was attributed to an overall $5 million increase in development revenue compared with budget, and lower spending on capital works.

Mr Davidson said the council achieved savings of $3 million on capital works. However, most of the reduction in capital spending was from work carried forward into 2014-15, with the Southern Pipeline heading the list of postponed projects.

The trend of previous years for the council to collect more rates than it spent has continued for 2013-14. Mr Davidson announced a rates surplus of $1.8 million.

Because $500,000 of any surplus must be used to reduce debt, it potentially left the council with $1.3 million to play with when it set its budgets next year. Last year's surplus was $4.2 million.

This year's surplus could have been $3.1 million except for the secret decision to spend $1.3 million on an urgent computer system upgrade just five days before nearly all the council was kicked out by voters last year.

The decision was made in the dying days of the last council, before the election that swept seven of the 10 councillors from power. It did not go through public budget processes for 2013-14, but was linked to the arrival of the council's new management team after restructuring cleaned out most of the old guard.

The annual report also showed that earnings from council operations, such as water rates and interest on investments was up $3 million against budget. This was more than offset by operational spending being $6.4 million more than expected. Most of this was from unbudgeted "asset adjustments".

Tauranga City's Capital Projects 2013-14

• Original budget: $76m
• Spent $52m
• Less land sales $8m
• Net capital spending: $44m
• Work carried forward into 2014-15: $19m