Council debt lower, but spending is down

JANINE RANKIN
Last updated 12:00 19/08/2014

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Palmerston North City Council has ended the financial year in good shape, with lower debt than expected, but not everyone is pleased money has been taken from ratepayers and not spent.

The council reached June 30 with a surplus of $4.76m, of which $520,000 has been carried forward to be spent this year.

Money had been saved because there were no storm events to clean up after, because of delays in spending, and a drop in the need to buy in professional services.

As a result of lower spending, an extra $9.11m was available to pay off debt, on top of the $3.63m already budgeted to reduce borrowing.

It was the second year in a row that the council had paid off more debt than it raised, reducing its net debt to a total $106.5m.

Council chief executive Paddy Clifford said that the result was pleasing, but increases in borrowing had been largely delayed rather than avoided.

Some of the spending that was running behind budget forecasts included the Wildbase Recovery centre, seismic strengthening of council-owned buildings, continuation of the Ashhurst to Palmerston North shared pathway, a bus terminal upgrade and improvements to the Ferguson St recycling centre.

Finance and administration chairwoman Susan Baty said the result was a good one overall, but she was concerned the council had only spent three-quarters of the amount it had budgeted for renewing capital assets, which could be a problem in future.

Cr Lew Findlay was worried about people paying more in rates during the past year than what the council actually spent.

He also believed they should have felt the benefit of lower interest charges because of lower debt levels, and he voted against receiving the report.

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- Manawatu Standard

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