Deficit reported for 2016/17
Gisborne District Council ends the 2016/17 financial year with a $5.1m deficit. Expenditure was up $10m compared to budget.
Contributing factors were an increase in roading related expenditure of $6.3m and additional operational expenses of $3.7m. This deficit follows the $2.9m deficit in the 2015/16 financial year.
“A lot of this expenditure is mainly due to roading maintenance. Council made changes to the roading service and contracts in 2015. While the initial business case was a move to provide financial savings the actual expenditure has continued to be over budget,” says Ms Thatcher Swann.
The deficit presents a challenge to a new Council who were sworn in a year ago and the Chief Executive and her new management team.
Ms Thatcher Swann says this was not a result anyone was wanting and we don’t want this happening going forward.
“We have been working hard to understand how and why the deficit transpired and what we need to do to set the Council back on track.
“Work planned in the 17/18 Annual Plan will continue, however we will be ceasing non-essential work.
“Our future focus is on ensuring that the Council minimises the impact of the deficit for the 2017/18 year end and resetting the budgets and service at the right levels through the Long Term Plan process.
“This includes revising our bid to the NZ Transport Agency, reviewing our operational expenditure, focussing on priority projects and changing how we fund our work.”
Mayor Meng Foon says the community will need to carefully consider the balance between income and expenditure as they develop the next Long Term Plan.
“The Council continues to have relatively low debt levels compared to other Councils at $38m. However these levels are not likely to stay the same given the investment required to maintain the districts infrastructure.
“As we head into priority setting to 2028, the community is being invited to provide feedback on the significant challenges that lie ahead – as well as to let us know what things really matter to them across our district.
“Rates will not be an average of 2% in the new LTP. The final increase is going to be determined by councillors after careful consideration of your wants and needs and the ability to pay.
“Our future projected growth and further pressure on our infrastructure means we will need to increase our rates,” says Mayor Foon.