Bitumen not sticking to budget
An increase in bitumen costs has blown out South Waikato District Council’s roading budget by $225,609.
The figures came to light recently when it was found the approved budget of $ 5,119,961 had climbed to $5,345,570.
South Waikato District Council group assets manager Roger Fisher said the increase was out of the council’s control.
‘‘Expenditure exceeded (the) budget last financial year ( 2011- 2012) due to a large increase in bitumen price.
The extra cost was largely due to fluctuations for the reseal programme, of which bitumen made up between 60 per cent and 70 per cent of the total cost. ‘‘The bitumen price can change daily depending on oil prices, so council can only ever estimate these costs,’’ Mr Fisher said.
To ensure there was no additional cost to ratepayers, the council would transfer the additional expenditure to the current year (2012-2013) and the roading programme would be amended to contain costs to funding levels.
Bitumen cost $ 1050 per tonne at the start of the contract, but increased to $1275.
The budget each year covered the estimated reseal programme costs, and extra costs from the previous year.
‘‘The programme reduces to fit the budget,’’ Mr Fisher said.