Council posts surplus - or does it?

Hamilton City Council has turned a $10m deficit into a $7.7m surplus in under a week, but the annual report numbers aren’t all what they seem.

In a media release late yesterday the council trumpeted an ‘‘excellent’’ financial result for the year to June, of a $7.69m operating surplus.

That followed the release of the city’s draft annual report six days ago, which confirmed the council had spent $10m more than its $219.8m income.

The council’s goal is for ‘‘balanced books’’ -  an operating surplus - by 2017, and chief financial officer Richard Briggs said yesterday’s claimed surplus was the result of two measures: accepted accounting and council’s own.

When setting the operating-surplus-by-2017 goal council had decided to measure that with a number of exclusions - such as external subsidies.

But it was also required to post results meeting accepted accounting practise.

So despite it claiming an operating surplus, the council was still on target to reach that goal, by its own definition of a surplus, by 2017, he said.

The final annual report is due for adoption on Thursday, with a highlight the revised civic debt of  $385.4m, which is $60m less than forecast.

Mayor Julie Hardaker said she was pleased with the progress the council had made in addressing the financial issues identified in the last year. 

‘‘It’s been tough year but council has made a number of improvements that have made a difference to the overall management of the city’s finances.”

The annual report also includes a revaluation, reported by the Waikato Times last week, showing a $362.2m writedown in the city’s assets.

Waikato Times