Waipa slashes $11 million from debt

Development contributions from Waipa’s building boom have sent debt levels in the latest council annual report tumbling.

Waipa District Council forecast a $24 million debt in its latest 10-year plan, but reported a $13m debt at the end of the 2014-2015 financial year.

Council chief financial officer Ken Morris said higher than forecast development contributions accounted for nearly half the $11m bonus.

‘‘We had budgeted $2.9 million in development fees, but received $5.8 million, mainly because of the higher than expected growth in Cambridge north,’’ Morris said.

‘‘There was also a jump in revenue from fees and charges, largely driven by the increase in building con- sents issued to new-home builders.’’

Council issued 1065 building consents in the 2014/15 financial year – 171 for new houses. Of those, 102 were in Cambridge, 38 in Te Awamutu and Kihikihi and 21 in Pirongia and Ngahinapouri, all from January to June 2015.

In the previous year, council issued 1087 consents, the most in the past five years.

Despite the extra flow of cash, Morris said it was an issue of timing rather than a windfall.

‘‘Development fees help pay for infrastructure like roads and water systems, which are needed for developments to proceed and so are linked directly to projects,’’ he said.

Council also managed to save $500,000 on staff costs. The lower debt has also seen interest payments fall.

‘‘By managing money carefully and reducing debt, we saved $250,000 in interest payments and earned an additional $260,000 from interest income.

‘‘Overall, our council has ended the year in a strong financial position that many councils might envy.’’

Total revenue was $80.4m and council ended the financial year with assets of nearly $1.3 billion, including land, buildings and major road and water infrastructure.

General funds saw a cash surplus of $448,000, which would be held in reserve for the next financial year. If the money goes unused, residents could see a reduction in rates next year.

‘‘Our cash balances are $11.5 million, so we go into the first year of our 10-year plan in very good shape.’’ Benchmarks, which are set by the Government to monitor the health of all councils and which measure prudent operation, were ‘‘comfortably met’’, Morris said.