Complete agenda for October 2009 Council Meeting (pdf, 1610KB)

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Northland Regional Council - 21 October 2009 Page 95 Item 14Financial Report – 30 September 2009File 350.4Report from Financial Accountant Kim Harvey dated 6 October 2009.The Summary Council Cost of Services Statement and Cost of ServiceStatements by Activity for the three months ended 30 September 2009 arepresented for Councillors' information.OVERVIEWDuring the first few months of the financial year a significant amount of variability isexpected as budget phasing is refined and revenue and expenditure come onstream.The Finance Department has been working with staff to ensure the budgets arephased in line with anticipated timing of expenditure and revenue streams. This hasresulted in more meaningful financial results to the period ended 30 September 2009.A detailed review of quarter one operating results will be provided to the Audit andFinance Committee later this month. This review will identify and explain anymaterial variances.OPERATING RESULTSThe Summary Cost of Services Statement for the three months to 30 September2009 shows a net operating surplus before extraordinary items of $471K against abudgeted net surplus of $27K. This results in a favourable variance of $444K. Thefavourable variance is due to expenditure tracking behind budget by $611K, which ispartially offset by revenue also tracking behind budget by $(167)K.The operating surplus after extraordinary items is $275K compared to a budgeteddeficit of $(226)K. Removing extraordinary items from the operating results gives aclearer picture on the operating activities of Council. For reporting purposes we haveclassified the Recreational Facilities rate and all Regional Event Centre relatedpayments as extraordinary items. Expenditure contributed by Council towards theEvent Centre will be funded from reserves in the first instance and repaid from theRecreational Facilities rate over an approximate 15 year period. Extraordinary itemsalso include vested assets and may also include other items as they come onstream.Budget variances evident to date are not expected to be permanent or indicative ofany full year variances.REVENUEThe year to date revenue at $6.17M is tracking 3% behind the budget of $6.33M.Grants and subsidies continue to show an unfavourable variance. The variancesprimarily relate to transport administration subsidies. The variances are due tobudget phasing rather than long term differences. Investment interest income istracking behind budget as a result of interest rates achieved to date being lower thanbudgeted. Investments are being actively monitored by staff.
Northland Regional Council - 21 October 2009 Page 96 Item 14EXPENDITUREYear to date expenditure is $5.69M compared to a budget of $6.31M, giving afavourable variance at the end of the first quarter of 10% $611K. Areas of note are asfollows:− Regional Information and Engagement is below budget for both the month ofSeptember and the year to date due publicity/education promotions expenditurenot coming on stream as profiled. Historically, the publicity/education budget isexpended over the summer months on events such as the Field Days, vehicleson beaches and harbour safety programmes.− Transport costs year to date are $97K below budget due to a number ofcontracted works not yet having come on stream, and minor variances againstbudget across a number of areas. It should be noted there is a correspondingdecrease in transport subsidy revenue.− Resource Management Planning is slightly over budget for the month due toconsultants costs in relation to the Aquaculture project, which is 50% funded byMinistry for the Environment, coming on stream. Year to date costs in this areaare under budget due to current staff vacancies in the department. Therecruitment process to fill the Resource Management Planning vacancies iscurrently underway with a view to having staff in position by the end ofDecember 2009.− Maritime is marginally over budget for the month as a result of a bulk fuelpurchase and overhaul work required on plant and equipment, however the yearto date position due to a large number of minor variances against budget.CAPITAL EXPENDITUREAt the end of the first quarter $256K has been spent on capital items out of anannual budget of $4.0M. Key items that make up this expenditure are the IRISproject ($82K), vehicle replacements ($70K), Maritime navigation aids ($39K) andthe upgrade to the roof of the Woolworths building ($27K). The budget for Capitalexpenditure is not phased.EXTRAORDINARY ITEMSExtraordinary items have been removed from operating results. The results afterremoving these items are a truer reflection of the operating results. The itemsclassified as extraordinary are:− the Recreational Facilities rate collected to fund the Regional Events Centretotalling $284K to date;− the costs contributed towards the Regional Events Centre which nowtotal $521K; and− notional revenue of $42K arising from navigation aids vested to the Council byNorthport Limited.
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Page 133 and 134: 18-Sep-09 1951001 Fluhler P W: FDE
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CLIMATECHANGELOCAL GOVERNMENTLEADER
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