Council report shows strong finances
Prudent financial management has seen Waipa District Council end its financial year with a robust balance sheet, an operating surplus of $34 million and an AA- credit rating.
Council has formally adopted its 2018-2019 Annual Report which is available here. A small number of printed copies will be available by end of this weekEW.
Chief financial officer Ken Morris said growth continued to have a huge impact on Council activities, driving a “step change” in the annual capital works programme.
“Waipā had a 1.9 per cent increase in population, growth in business units of 1.4 per cent and economic growth of 4.7 per cent,” Morris said.
“In response we delivered $55.1 million of capital works and services, mainly in core infrastructure like water, wastewater, stormwater and roads. But there is no doubt the capital programme was challenging and capital projects will continue to be testing in the coming year given the very tight contracting market.”
Market conditions forced a delay in some projects, meaning Waipā ended the year with $15 million in external debt, $34 million less than budget. Over the next decade debt levels are still forecast to rise steadily as investment into core infrastructure continues along with the development of community facilities like Te Ara Wai in Te Awamutu, community playgrounds and the Cambridge pool.
Morris noted rates continued to form less than 50 per cent of Council’s total revenue, well within Waipā’s self-imposed limit of 65 per cent.
“That means we have diverse income streams and are not wholly reliant on ratepayers to meet the costs of running the district which is good. We will also continue to uplift contributions from developers to ensure they pay their fair share of growth-related costs.”
In June this year, international credit agency, Fitch, assigned the Council a AA- credit rating, endorsing Waipā’s financial strength, stability and financial management. The only New Zealand council to have a higher Fitch rating is Invercargill City Council.
The rating means Waipā will receive a 15 basis point (0.15 per cent) discount on any new long-term borrowings from the Local Government Funding Agency. This will save ratepayers tens of thousands of dollars in interest costs over coming years.
The Annual Report showed Council ended the year with more than $1.7 billion in assets and total liabilities of $38.3 million. There was a cash surplus of $970,000 after allowing for a small number of carry forward and other items.
The cash surplus provides a buffer for unanticipated items in the 2019-2020 year. But it can also be used to benefit ratepayers in the form of reduced rates in the 2020-2021 year which is the next time the Council will set its rates.