Westland District Council almost $1 million in red after projecting $1.3 million surplus

The closure of the Hokitika Museum caused a $47,000 decrease in income for the year and an NZTA subsidy was $744,000 less than budgeted, in part due to the weather. Photo / Jocelyn Kinghorn, Flickr

By Janna Sherman

The Westland District Council looks set to finish the financial year almost $1 million in the red - a complete reversal of the $1.3 million surplus it had projected.

Draft end of year results to June 30 were tabled at the finance, audit and risk committee meeting on Thursday and received in silence.

A deficit of $866,952 was forecast in the report.

However, finance manager Dayle McMillan said more information had come to light only the day before in regard to a Westroads subvention payment that would increase the projected deficit by $130,000 to total $996,953 for the year.

The previous council had previously forecast a surplus of $1.3m for the year.

Unbudgeted spending to the tune of $1m, a $415,000 increase in depreciation and reduced income of almost $800,000 have contributed to the variance of $2.2m.

Despite the large deficit, councillors were mute on the financials, which McMillan noted were interim and were subject to change.

Mayor Bruce Smith questioned the forecast overall debt position of $16.7m, which was $2.4m less than the $19.1m projected.

McMillan said that was mainly due to timing with a number of projects such as the Lake Kaniere Rd sealing being carried over into the new financial year.

The closure of the Hokitika Museum caused a $47,000 decrease in income for the year and a New Zealand Transport Agency subsidy was $744,000 less than budgeted, in part due to the weather.

Expenditure included in the unbudgeted operating costs were: damaged culvert pipes due to overweight vehicles ($264,000), remedial works at the Franz Josef Glacier oxidation ponds ($123,000), wastewater 'proceedings' at the Franz Alpine Retreat subdivision ($106,000), repairs to the Hokitika sewerage outfall pipe ($43,000), an unforeseen pump breakdown in Fitzherbert St ($25,000) and the earthquake assessment for the Centennial Swimming Pool ($11,000).

Unbudgeted spending later approved by the council included the Hokitika Spit erosion control ($192,000), pH correction at the Blue Spur water treatment plant ($50,000) and management of the Carnegie Building ($13,000), which reopened in March.

The fresh year forecast has budgeted for a $2.5m surplus at June 30 next year.

The final audited financials will be released with the annual report by October 31.

- Hokitika Guardian