City council in good shape

Last updated 12:00 19/02/2013

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Despite having to find an extra $1.25 million to improve the Totara Rd sewage treatment plant this financial year, the Palmerston North City Council ended the first six months in good shape.

It clocked up an operating surplus of $1m, and has paid off more debt than planned.

It collected $5.1m in development contributions where it had budgeted to receive just $500,000, and has not had to raise as much in new borrowing as expected.

Approval for a major subdivision late last year generated most of the large fluctuation in contributions, City Enterprises general manager Ray McIndoe said.

Chief financial officer Grant Elliott said even the weather had played its part in the first six months - there were no floods or storms that needed money spent on a cleanup.

Chief executive Paddy Clifford said the results were welcome, but significant challenges lay ahead, such as finding another $232,000 in savings to pay for the wastewater action plan.

One of the key costs in that plan was extra alum dosing to stop the discharge of phosphorus into the Manawatu River.

The need for action was confirmed by last summer's joint investigations with Horizons Regional Council which showed the city's wastewater discharge was hurting aquatic life downstream.

"Continued pressures on services and uncertain revenue mean we remain focused on making savings wherever possible," Mr Clifford said.

The second half of the financial year was likely to be dominated by subdued growth, which would reduce council revenue.

It was also likely to see a start made on more capital projects, such as The Globe Theatre makeover and the wastewater pipeline from Ashhurst.

So far only $7.2m in capital spending had been incurred, well below a budget of $12m. The overall capital programme budget for the year of $32m was unlikely to be achieved. The council's total gross debt stands at just under $130m.

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- Manawatu Standard

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