Council ends financial year in 'solid position'

FILE

Rotorua Lakes Council has ended the financial year with increased cash on hand and debt reducing.

In a statement issued by the council today, chief financial officer Thomas Colle said the financials had yet to be finalised but the organisation had ended the 2015/16 financial year in a "solid position and well-placed for the next year".

Mr Colle said the council's operating result was better than budgeted for the financial year with both capital expenditure and debt below budget.

Strong growth in revenue from fees and charges - particularly in consenting and from museum trading - had contributed to a sustained strong performance across the council, the statement said.

Mr Colle provided a verbal update about the year-end financial position to councillors at today's Operations and Monitoring Committee meeting additional to the agenda report which outlined the financial position as at the end of May.

Mayor Steve Chadwick said the strong end-of-year position reflected prudent financial management which had reversed previous trends marked by council debt doubling in the six years to 2013.

"We're now able to pay off debt for the second consecutive year, which is fantastic, and overall this is a very positive result which should give both council and the community great confidence as we head into the next financial year," she said.

A new framework was introduced in December 2013 to move the council to a stronger financial position. A review of finances prior to that had concluded that while debt remained within acceptable limits it had been on the increase and was higher than it should be.

"We needed to take decisive action to turn the situation around," said Mrs Chadwick.

"As well as unsustainable increasing debt levels, there had been a pattern of unsustainably low rates increases, costs continued to increase in despite constrained revenue and council was borrowing to fund operational costs.

"Independent reviews assessed the situation and set us on track towards a new financial framework which has resulted in re-setting rates rises to realistic levels, reduced spending and operating costs and improved financial reporting.

"Along with some key decisions regarding the likes of the airport and projects which are no longer needed, it has seen us turn things around to ensure we're operating sustainably. And that was part of this council's commitment to residents - ensuring we had an efficient and effective organisation that could deliver on the community's aspirations and expectations."