The council reported its last year-to-date operating surplus in August 2021, which was $600,000. At thesame time last year, the council reported an operating deficit of $7.3m.
It comes ahead of the council's Operations and Monitoring Committee meeting tomorrow , as part of a report for the meeting.
While a surplus, the result was more than $17m under a budgeted surplus of $25m for the period. The annual plan accounts for a more than $37m surplus by year-end.
Expenditure was about $119m to a budgeted $117m and revenue was almost $127m against a budgeted $142m.
The report said the organisation was still facing "financial pressures", citing the impacts of Covid-19 and the "economic environment" as reasons.
It said revenue streams remained "subdued" at a time when there was increased pressure on costs, but the council had been able to "mitigate most of these challenges while still delivering all services to our community".
The $17m variance to budget related to the "timing" of capital subsidies – about $15m – as well as capital projects, and "ongoing pressure" on operating expenditure and revenue from fees and charges.
The report forecast a year-end result within $1.3m of the budget.
At last month's committee meeting, council organisational enablement deputy chief executive Thomas Colle said he expected the result to be within $2m of the budget.
Rotorua Lakes Council organisational enablement deputy chief executive. Photo / Andrew Warner
The report said continued mitigation of the financial pressures would be achieved through "prudent cost management", with no reduction in levels of service.
The council had spent $63.9m on its capital works programme in the financial year to date, and the report said inflation and logistics challenges were starting to impact the capital works delivery.
However, it anticipated a "high rate" of completion on asset renewals and forecast $85m of investment in infrastructure and "community amenities" by year end.
Rates revenue was ahead of budget, and the report said it was because of seasonal water billing and fewer than anticipated rates remissions.
Subsidies and grants were unfavourable to the budget by $14.2m because of the deferral of capital works impacting revenue received, it said.
Expenditure was also unfavourable by $7.9m, which was impacted by the council's $1m QE Health grant, consultant and contractor costs, legal fees from the landfill case against the Bay of Plenty Regional Council, and increased security initiatives in the inner city.
Staff vacancies saved $479,000, but utilities expenses were $180,000 over budget.
The council had, so far this financial year, spent $13m on the Sir Howard Morrison Centre, $9.5m on the lakefront, $1.2m on the aquatic centre, $7.6m on stormwater improvements, $8.8m on transport improvements and $4m on "IT solutions".
The council also spent $2.9m on water supplies and $10.1m on sewerage.
On April 30, debt was $277m and cash on hand was $5.5m.
The committee meeting tomorrow will also review updates from the three council-controlled organisations – RotoruaNZ (formerly Rotorua Economic Development/Destination Rotorua), Rotorua Airport and Infracore, as well as an organisational update from the chief executive and the seven deputy chief executives on their respective areas.
The meeting will be held in the council chamber at 9.30am tomorrow and is also viewable via livestream on the council website or its YouTube page.
Local Democracy Reporting is public interest journalism funded by NZ On Air.
