Significant increase to value of roading assets, Annual Report adopted

Councillors have adopted the Annual Report for Hurunui District Council (HDC) for the 2021/22 year.

Despite there being severe shortages of resources to undertake the auditing process for the Annual Report, the Council was fortunate to be able to retain its spot in the queue and be able to adopt the Report a full month ahead of the statutory deadline.

The report is dominated by the requirement for Council to undertake a full revaluation of its Roading Network as of 30 June 2022.

Chief Financial Officer Jason Beck said there was the expectation that the network’s values would increase, given the new roading contract resulted in a 30% increase which necessitated the 10.5% in rates when the Annual Plan was adopted in June.

“The increase to the value of the roading assets was 58%, pushing the value of the roading assets from $267 million to $421 million,” Beck said.

From an operational point of view, in last year’s Annual Report the Council was able to record an exceptional result for the balance books for the Hanmer Springs Thermal Pools & Spa (HSTP&S). Unfortunately, due to the period of lockdown in August 2021 and the extended period of restrictions, the HSTP&S recorded a surplus of only $700,000.

“Yet indications for the 2022/23 are promising with the results to the end of October exceeding budgets.”

Overall, the operating surplus recorded for the year was $5.5 million. Council’s revenue for the year was $61 million, some $7.7 million above the budgeted level for the year, with Development Contributions and Vested Assets being ahead of level anticipated which reflected the increasing level of growth experienced in the Amberley area.

“The floods we experienced in the District meant Council was entitle to additional roading subsidies from Waka Kotahi/NZ Transport Agency, to help cover damages to our roading network.”

Total expenditure for the year was $56 million, some $6.7 million ahead of the budget, with additional costs incurred in the roading area plus an additional level of depreciation for the year, a result of increased valuation of assets.

The overall surplus was enhanced by the increase in value of the roading network as outlined above, which equated to a Total Comprehensive Revenue and Expense of $160 million.

The total expenditure on assets amounted to $22.7 million, only $700,000 short of the budget set for the 12-month period.

Beck said Council had significantly completed its capital programme it set out to achieve at the start of the year.

“As well as continuing work in the area of three waters, the Council also completed the construction of MainPower Amberley Pool in April of this year.

Despite achieving the significant capital programme, the Council’s debt remained at $38 million over the year, which was lower than the $41.5 million that was anticipated in the budget.

Council plans to advance several projects relating to drinking water standard compliance in the 2022/2023 year, which Beck said will mean taking on more debt.

“As a Council we continually strive to deliver the highest quality of road network and water services, and unfortunately this all comes at a cost, which is not predicted to lower anytime soon.”