Surplus up anddebts down for TDC

Tasman District Council ended the 2016-17 financial year with $44 million less debt than budgeted and an underlying operating surplus of $12.9m.

The council’s net external debt at the end of the year was $122m, compared with a forecast $166m while the operating surplus was $12m ahead of budget. Key factors in the huge variance include additional income and an underspent capital works programme. Finance manager Russell Holden said the capital underspend totalled about $25m.

Just over $15m from the capital budgets is to be carried over to the 2017-18 financial year.

The operating surplus of $12.9m was larger than the $10.4m total tipped in May after the March 2017 quarterly financial update. It follows a similar surplus in 2015-16 of $13.2m and prompted Cr Kit Maling to ask if the council was collecting too much in rates.

‘‘This is the second year in a row of a similar surplus and does that mean that the rates we’re setting are too high because our ratepayers have paid that and then we’ve got this extra money that we’re using to pay off debt,’’ Maling said at council meeting to adopt the Annual Report 2017. ‘‘Are we being too ambitious in what we propose to do on our Annual Plan?’’

Maling also asked if the activities creating the surplus were likely to be repeated in the future.

‘‘I would hate to be in this position next year because it means we’re collecting too much money,’’ he said.

Mayor Richard Kempthorne said the council’s capital spend needed to be much closer to what was estimated.

‘‘We as a council are expecting to be closer to the mark,’’ he said.

Holden said some of the savings were one-off and some would be ongoing. There was lower depreciation and finance charges were less than budgeted. In addition, there was a saving in the general operating expenses of about $600,000 and roading main- tenance was down.

On the flip side, forestry income was up.

‘‘You’ll be aware that we’ve ... brought forward some of the forestry harvesting to take advantage of the market,’’ Holden said. ‘‘That was about $4.5m extra revenue coming through.’’

In a report, senior management accountant Matthew McGlinchey says the forestry activity had a surplus of $5.89m. It had a record year of about 42,000 tonnes harvested from the Moturoa/Rabbit Island and Borlase forests.

‘‘The return to council is $2.36m before internal dividends and transfers,’’ McGlinchey says.

Councillors approved recommended uses for surpluses in the operating activity balances that have been accumulated over time. McGlinchey says the balances as at June 2017 totalled $16.061m. The surpluses will be used: To repay internal debt, $1.253m; transfers between activities, $0.026m;

to fund carryover $1.699m;

to remain $13.083m. After the meeting, Kempthorne said it was a good result that would benefit Tasman residents.

‘‘There are some major infrastructure works needed because of the high growth our area is experiencing and will continue to experience,’’ he said.

‘‘Having a strong balance sheet makes it easier to carry out that work.’’

Careful control of spending, low interest rates, higher dividends from Port Nelson and Nelson Airport and increased forestry revenue had all contributed, the mayor said. in the projects, activity