Hamilton's growth underpinned by a  stronger financial result

Continued strong development growth in Hamilton has underpinned an improvement in Hamilton City Council’s financial results against budget for the 2017/18 year.

The results have been described as positive, but the Council is not yet covering its day to day operating expenses and is still borrowing to meet the shortfall.

At yesterday’s Finance Committee meeting the Council reported its financial performance against three measures; the Balancing the Books measure set by the Council in 2015, a Local Government Balancing the Books measure set by central government, and a standard accounting measure.

Under the Government measure, the Council returned a deficit of $3.9M for the financial year, an improvement of $7.2M against the budgeted $11.1M deficit. The Council’s 2015 Balancing the Books measure returned a $20.4M surplus, against a break-even budget. Against the accounting measure, which includes capital and operating revenues, the Council returned a $61.3M surplus, an improvement against budget of $52.8M.

The Council’s General Manager Corporate, David Bryant says, of these three measures, the Local Government measure comes the closest to aligning with the actual costs of running the city.

Hamilton growth underpins stronger financial result
Hamilton growth underpins stronger financial result
“The Local Government measure removes ‘income’ from development contributions, subsidies and vested assets as these cannot be used for operating expenses. This gives a much clearer picture of our true financial position and shows we still had to borrow to pay for everyday costs last year. The 2015 Council measure doesn’t do this – the ‘surplus’ it refers to is already committed – and it effectively over-inflates our actual financial performance,” Mr Bryant says.

“Following a detailed report from international accounting firm PwC, the Council has recognised this and has voted to implement a new measure from this year to take this into account and clearly show how our operating costs and operating revenues compare,” Mr Bryant says.

Higher revenues and $32M of deferred projects also contributed to a lower debt position than forecast. The lower debt figure contributed to the overall financial position with $1.84M less interest paid than forecast.

From Scoop