Forecast deficit delays projects

The Southland District Council is putting off projects after predictions show it is facing a $4.5 million deficit this year.

Almost $3.5m in projects have been deferred to the 2019/20 annual plan in an effort to spread the financial load on the council coffers. Operating expenses have increased from the budget set in the 2018/19 annual plan by $1.2m.

The latest financial forecast report, written by council management accountant Joanie Nel, indicates the council deficit is set to increase by $140,000 to $4.5m for the year ending June 30, 2019. The report will be presented to the Finance and Audit Committee tomorrow, and then the council on December 18.

Major changes from the budget included approval for consultant fees of $250,000 for the business case and assessment for a new council office, Nel said.

Harvesting costs for forestry operations at the Dipton, Gowan Hills, Ohai and Waikaia had increased by $775,690.

The Stewart Island Electrical Supply Authority (SIESA) had an increase in operating costs of $249,905.

‘‘The SIESA management fee had increased by $249,905 as part of the contract renewal process,’’ Nel said.

Work was under way to assess the sustainability of the contract and also to identify cost-saving mechanisms for the service, Nel said.

Revenue had increased on what was forecast in the 2018/19 plan by $1.1m to $69.1m.

Nel said in the report that this was because of increased tonnage and sale price of forestry harvesting at Waikaia.

Capital expenditure had decreased by $602,000.

Some council projects were being put off in an effort to reduce the financial impact.