2011-2012 Annual Report - Full Version - PDF - Palmerston North ...

The following table details how we applied rates compared to how these were set in the 2011/12 AnnualPlan.FOR THE Year Ended 30 June 2012Rates are set to ensuresufficient fundingto meet objectivesfor operatingrequirements,maintain capabilityand loan repaymentsOther revenues areset to cover operatingrequirements as inapproved policiesActuals Budget Variance$000 $000 $000Rates received:General rates 55,110 54,746 364Targeted rates 13,764 13,620 144TOTal raTES 68,874 68,366 508We then received other revenues:Fees 23,025 24,276 (1,251)Other revenue 3,720 3,275 445Interest and dividends 1,138 1,448 (310)TOTal REVENuE 96,757 97,365 (608)Overview Financial OverviewOperating expensesare the amountswe incur to deliverservices and promotecommunity activitiesRenewal capitalexpenditure maintainsthe standard andquality of assets toenable delivery ofservicesTo enable planneddebt repaymenton new capitalexpenditure forgrowthWe then paid out:Grants for community support (7,504) (7,490) (14)Other expenses (62,873) (63,317) 444Interest to fund assets (10,022) (11,121) 1,099We paid out to maintain capability (14,097) (16,224) 2,127We received external revenues to fundservices or maintain capability 1,551 1,654 (103)Borrowing effect of renewal 3 year averaging 825 825 -We received net proceeds from sale of assets 732 - 732We received proceeds fromsale of investment forest 280 513 (233)Which leaves for debt reductionaND WORkING caPITaL 5,649 2,205 3,444This excludes accounting valuation adjustments as these are non-cash or rate funded in future years.Capital expenditure to maintain capability includes amounts actually incurred during the year only. Therewill also be a small amount of the total funded by rates yet to be incurred in the next period.Debt movements above also exclude other net borrowing requirements for movements in working capitaland for the effect of the rolling average used for capital renewal funding.In addition we intended to acquire new assets for growth or to add capacity, partly funded by grants orsubsidies.Amount of newcapital expenditurefor new assets and toincrease capabilitiesNew capital expenditure (9,603) (32,915) 23,312Less non-operating revenue cash received 2,098 4,057 (1,959)FuNDED BY NET DEBT (7,505) (28,858) 21,353The table above includes that we will generate cashto enable debt reduction of $5,649k compared tothe budget amount of $2,205k, including forestryloan repayment of $280k. Proceeds from the saleof assets have boosted this amount although partof this difference is required to fund movements inworking capital that occur each year.Part of both the renewal and new capitalexpenditure budgeted and not incurred will beincurred in the future. This has been allowed for inthe 2012/13 long term plan and will increase debtwhen incurred.8Palmerston North City Council Annual Report 2011/12