Annual Report 2010 - Christchurch City Council

p122. Annual Report
Christchurch Otautahi
2010
Financial statements
Financial highlights
Financial statements
Financial highlights
Financial result
This year’s Annual Report shows that the Council remain in a
strong financial position, with an accounting surplus of $107.9
million. This is $16.8 million below plan. The Council budgets for
an accounting surplus because under accounting standards we are
required to show all revenue, including capital revenue as income
received for the year. Capital revenues include development
contributions, some of which are used to fund future development;
New Zealand Transport Agency (NZTA) subsidies, and vested
assets, (footpaths, water and drainage infrastructure and reserves
land), which are vested to Council by developers. The surplus also
includes interest received on funds that are held in the balance
sheet for special purposes.
The $16.8 million shortfall is a result of the following variances:
• an under-recovery in vested assets of $9.2 million
• higher than planned depreciation, amortisation and
impairment costs of $4.3 million due to higher impairment of
assets $9.8 million, offset by lower than planned depreciation
and amortisation of $5.5 million. The impaired assets are the
loan to Tuam Limited and several minor investments, the lower
depreciation and amortisation is largely the result of the shortfall
in the previous year’s capital programme.
• higher than planned personnel costs, $2.8 million
• hedging impairment costs of $3.2 million which were not
planned
• higher than planned income tax expense of $1.9 million
• these were offset by lower than planned finance costs of $3.8
million due to timing of the capital programme and lower
interest rates.
After adjusting for non-cash items we have made a cash operating
surplus for the year of $10.3 million of which $4.1 million was
retained to meet operational costs of projects which will be
completed in 2010/11. Council allocated a further $1.7 million of
the surplus to specific projects. The remaining $4.5 million will be
moved into a reserve and used to fund capital expenditure, thereby
reducing future borrowing costs.
Sources of operating income
Total income for the year ended 30 June 2010 is $567 million. It was
received from the following sources:
Actual Plan
$m $m
Rates revenue 257.4 256.1
Sale of goods / services 43.9 33.9
Rental revenue 26.9 29.4
Interest revenue 22.7 23.4
Dividends 115.1 117.6
Development contributions 12.8 18.7
NZ Transport Agency subsidies 27.4 26.4
Other revenue 53.7 55.3
Vested assets 7.1 16.2