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

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Note 2Summary cost of services and explanation of major variancesagainst budgeTExplanations for major variations from PNCC’s budget figures in the 2011/2012 Annual Plan are as follows:Actual Budget Variance Variance Actual2012 2012 2012 2012 2011$000 $000 $000 % $000ExplanationActivity StatementFinancial Statements Note 2ACTIVITY REVENUELeadership 50 113 (63) (56%) 141 1.Community Support 2,307 1,832 475 26% 2,064 2.Economic Development 972 1,018 (46) (5%) 831 3.Leisure 2,879 2,491 388 16% 2,833 4.Environmental Sustainabilityand Health 15,274 16,569 (1,295) (8%) 14,919 5.Support Services 6,401 6,976 (575) (8%) 7,614 6.Total Activity Revenue 27,883 28,999 (1,116) (4%) 28,402External general rates 54,520 54,346 174 - 51,277Targeted rates 13,764 13,620 144 1% 13,836Rates penalties 590 400 190 48% 577 7.Total Operating Revenue 96,757 97,365 (608) (1%) 94,092ACTIVITY EXPENDITURELeadership 6,718 7,282 564 8% 6,005 8.Community Support 5,701 5,673 (28) - 5,419 9.Economic Development 4,608 4,704 96 2% 4,207 10.Leisure 30,437 31,470 1,033 3% 29,391 11.Environmental Sustainabilityand Health 51,897 52,942 1,045 2% 52,567 12.Support Services 5,536 5,690 154 3% 5,630 13.Total Activity Expenditure 104,897 107,761 2,864 3% 103,219Operating Surplus / (Deficit) (8,140) (10,396) 2,256 22% (9,127)Derivative financialinstrument valuation (5,453) - (5,453) - (467) 14.Long term investment fund valuation (604) - (604) - 472 15.Asset valuation andfair value adjustments (348) - (348) - 13 16.Gain/(loss) on disposal of fixed assets (88) - (88) - (1,399) 17.Investment forest harvest revenue 54 - 54 - 281 18.Development contributions 1,094 1,300 (206) (16%) 910 19.NZ Transport Agency capex subsidies 2,049 4,221 (2,172) (51%) 2,191 20.Revenue for capital expenditure 506 190 316 166% 2,429 21.Vested assets 15 6,000 (5,985) (100%) 1,757 22.Taxation losses received 166 - 166 - 139 23.Net Result - Surplus / (Deficit) (10,749) 1,315 (12,064) (917%) (2,801)146Palmerston North City Council Annual Report 2011/12
Comprehensive detail of both financial and nonfinancialperformance of each activity is providedin the ‘What the Council Does’ section of this annualreport.Key VariancesOverall services provided by PNCC have tracked closeto budget. Some variances have occurred during theyear and the significant variances are detailed below.Significant Variances within the Operating Result:Significant operating revenue variances:1. Leadership - lower revenues from reducednumber of private plan change requests.2. Community Support - higher rental revenuesfrom community housing were received,revenue received for contract management(offset by same amount of expenses) andunbudgeted rental for Community House.3. Economic Development - recovery of RugbyWorld Cup costs offset by lower revenuesachieved by the Convention Centre withoffsetting lower expenses.4. Leisure - Library lower revenues. ArenaManawatu higher revenues, including recoveryof Rugby World Cup costs and unbudgetedrevenue from harvest of Arapuke Forest.5. Environmental Sustainability and Health- Regulatory had lower building consentrevenue offset by higher animal licenserevenues. Roading and Parking lower revenueswere received than budget for NZTA roadingsubsidies and lower parking revenue offsetby gain on sale of land. For Water and Wasteactivities , lower water by meter revenue,lower electricity generation, carbon creditrevenue from reduced landfill gas availabilityand recycling revenues with higher collectionrevenues, unbudgeted revenue from sale ofaccess rights.6. Support Services - lower investment propertyrentals received, lower external servicerevenues (with decrease in expenses to offset),lower investment fund earnings followingwithdrawals from investment fund, offset byhigher public rental housing revenues.7. Rates penalties - more penalties were chargedthan was budgeted with total outstandingsimilar to previous year.Significant operating expenditure variances:8. Leadership - reduced costs incurred forprofessional services and operating costs(partly related to the lower revenue).9. Community Support - expenses incurredagainst contract management revenue, offsetby lower grants paid, lower net personnel costsand reduced maintenance required.10. Economic Development - lower levels ofexpenses incurred by the Convention Centre,consistent with the lower revenues.11. Leisure - Library lower operating costs offsetby higher depreciation. Parks and Recreationlower operating costs, interest, depreciationoffset by charge for programme budgeted ascapital charged to operating.12. Environmental Sustainability and Health - forRegulatory lower net personnel and operatingcosts in line with lower revenue offset byhigher legal litigation costs. For Roading andParking lower maintenance (with lower NZTAsubsidy revenue), depreciation, interest. ForWater and Waste activities higher operatingcosts, higher chemical use, other operatingcosts, depreciation offset by lower financecost.13. Support Services - lower expenses withthe lower external services revenue above,depreciation offset by higher net personnelcosts.Significant variances within the net result:14. Derivative financial instruments - fordownward revaluations of derivatives. Thisis a non-cash write down of the fair value ofthe derivatives and during the period of thecontracts will be offset by cash transactionsfrom delivery of settlements being included ininterest expense.15. Long term investment fund valuation - fordownward revaluations of the investment fund.This is a non-cash write down of the fair valueof the investment fund.16. Asset valuation and fair value adjustments- annual revaluation of operating investmentassets. These are non-cash.17. Gain/(loss) on disposal of fixed assets - thisis the net difference on disposal of assets frombook value largely not charged as depreciation.For prior year the majority related todecommissioning of infrastrusture assets asupgraded as part of essential capital work.18. Investment forest harvest revenue - for theharvest of part of Gordon Kear Forest duringthe year. Proceeds used to repay part of theforestry loan and therefore unbudgeted as noimpact on rates.19. Development contributions - this year-endvariance reflects the development slowdownand is an inter-period timing issue as it cantake upward of eight years for PNCC to collectcontributions from developers and thereforecan be inherently difficult to budget.20. NZ Transport Agency capex subsidies -reduction due to programmes planned notbeing approved by NZTA and not beingcompleted or deferred.21. Revenue for capital expenditure - this isinherently difficult to budget and includesamounts received as contributions towardscapital projects undertaken. Includesadditional amounts received in relation to2010/11 projects.22. Vested assets - for infrastructure assets vestedto Council during the year. As for developmentcontributions this reflects the developmentslowdown and can be inherently difficult tobudget.23. Taxation losses received - PNCC was ableto convert to cash, (through a transactioninvolving PNCC, Palmerston North Airport Ltdand the Inland Revenue Department), $166kof previously unrecognised tax loss creditsowed to PNCC by the IRD. This non-operatingrevenue is recognised after the net result.Financial Statements Note 2Palmerston North City Council Annual Report 2011/12147
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Palmerston North City CouncilAnnual
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Contents1. OVERVIEWCouncil’s Visi
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OverviewPalmerston North City Counc
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Year in ReviewAgainst the backdrop
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Overview Year in ReviewLocal Govern
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The following table details how we
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Funding Source Proportions for Oper
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Asset Base1,3601,3401,3201,300$ Mil
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Borrowing Ratios20%Policy Maximum16
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Overview What's Happening in the Ci
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Overview What's Happening in the Ci
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Overview How Do We Operate?Election
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Role of Management and EmployeesOve
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ActualAmount Paid2011/12$Annual Pla
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Overview Funding Support to Externa
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What the Council DoesPalmerston Nor
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Tying these pillars together at the
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What the Council DoesLeadershipLead
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Activity - Councillor Leadership an
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Financial ResultsActivity Operation
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The District PlanThe Council has co
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Page 47 and 48:
What the Council DoesCommunitySuppo
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Activity - CemeteriesWhat the Counc
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How did we performLevels of Service
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Activity - Community DevelopmentWha
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The Youth Library, located within t
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The Papaioea Place project will pro
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EconomicDevelopmentEconomic Develop
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Activity - Economic DevelopmentWhat
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How did we performPerformance Measu
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LeisureGroup DescriptionThe Leisure
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Activity - Arts and CultureWhat the
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Activity - City LibraryWhat the Cou
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Significant Activity Capital Projec
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What happened in the yearSportsfiel
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How did we performLevels of Service
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Levels of ServicePerformance Measur
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j. Programme not completed due to s
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Environmental Sustainability and He
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Activity - RegulatoryWhat the Counc
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District Licensing Agency staff hav
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Levels of ServicePerformance Measur
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Activity - Roading and ParkingWhat
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Major issues relating to Roading an
Page 103 and 104: Levels of ServicePerformance Measur
Page 105 and 106: Significant Activity Capital Projec
Page 107 and 108: Activity - Rubbish and RecyclingWha
Page 109 and 110: How did we performPerformance Measu
Page 113 and 114: How did we performLevels of Service
Page 115 and 116: Activity - WastewaterWhat the Counc
Page 117 and 118: How did we performPerformance Measu
Page 121 and 122: Several projects were put on hold t
Page 123 and 124: Financial ResultsActivity Operation
Page 125 and 126: Support ServicesGroup DescriptionTh
Page 127 and 128: Activity - Commercial or Strategic
Page 131 and 132: Activity - Corporate SupportWhat th
Page 135 and 136: How did we performLevels of Service
Page 137 and 138: Financial StatementsFinancial State
Page 139 and 140: Independent Auditor’s ReportTo th
Page 141 and 142: Statement of Compliance and Respons
Page 143 and 144: Statement of Financial PositionAS A
Page 145 and 146: Statement of Cash Flowsfor the year
Page 147 and 148: PNCC measures the cost of a busines
Page 149 and 150: PNCC’s investments in its subsidi
Page 151 and 152: Carpark leasesAcquired carpark leas
Page 153: Critical accounting estimates and a
Page 157 and 158: Note 3Rates RevenueCouncilActual Ac
Page 159 and 160: Note 6Other gains/(losses)CouncilGr
Page 161 and 162: Note 10Cash and cash equivalentsCou
Page 163 and 164: ◊As of 30 June 2012 and 2011, all
Page 165 and 166: Accounting policies require that lo
Page 167 and 168: Current Reversal of Current year Cu
Page 169 and 170: Current Reversal of Current year Cu
Page 171 and 172: ◊reality is that infrastructure l
Page 173 and 174: Note 17Forestry assets Council Grou
Page 175 and 176: Note 21Provisions Council GroupActu
Page 177 and 178: Note 23BorrowingsCouncilGroupActual
Page 179 and 180: Note 24Equity Council GroupActual A
Page 181 and 182: Note 26Capital commitments and oper
Page 183 and 184: Carbon Credits◊◊PNCC has an agr
Page 185 and 186: Transactions with Councillors and K
Page 187 and 188: SalaryWith the enactment of the Loc
Page 189 and 190: Note 33Fair value hierarchy disclos
Page 191 and 192: PNCC’s maximum credit exposure fo
Page 193 and 194: The table below analyses PNCC’s f
Page 195 and 196: 2012 2011$000 $000 $000 $000 $000 $
Page 197 and 198: Council Controlled OrganisationsCou
Page 199 and 200: Council Controlled OrganisationsThe
Page 201 and 202: Globe Theatre Trust BoardObjectives
Page 203 and 204: Te Manawa Museums Trust BoardObject
Page 205 and 206:
Palmerston North Airport LtdObjecti
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AppendicesAppendicesPalmerston Nort
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How to Find usPostal AddressPrivate
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www.pncc.govt.nz
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