The full council meeting was held on 24 September 2015 (immediately after the conclusion of the engineering meeting). All councillors were present.
The agenda comprised two items: (1) the annual report, and (2) the navigation safety bylaw.
At the conclusion of this meeting 2 workshops were held. The first on the reinstatement of Richmond’s central business district after storm water initiatives have been completed. The second reviewing grass cutting and tree removal across the district.
The 2015 annual report (together with a number of amendments tabled at the meeting) was received and adopted by council. I briefly touched on the main highlights in my earlier audit subcommittee post (see www.greeningtasman.wordpress.com/2015/09/21/audit-subcommittee-meeting-16-september/).
The annual report provides an annual snapshot of the financial (ann non-financial) performance of council for the period 1 July 2014 to 30 June 2015. This is the normal financial period for government organisations (including council).
Council has again received an unmodified audit opinion and has maintained its AA- credit rating. In my opinion, both are good indicators of good management and governance. Many of the issues identified in the previous audit report have been addressed, and the auditor specifically made mention of the improved management of the audit process.
What is an unmodified audit opinion you might ask?
Generally, auditors are charged with the task of verifying the effectiveness of a business’s internal controls and must report any incidences they find that suggest mis-management, waste, or fraud. After the audit, the auditor must express a formal opinion on the records they have reviewed in their report, which may be either a modified or unmodified audit opinion.
When the financial statements “give a true and fair view” and the organisation under audit has complied with all the statutory and prescribed requirements, the auditor will issue an un-modified audit opinion. A modified audit opinion is issued when there are identified issues. For example, there is a possibility of a material mis-statement (or actual material mis-statement) in the financial records, or there is a material deviation from the financial reporting standards. Material mis-statements are differences or omissions of amounts and disclosures that are considered likely to influence a reader’s understanding of the financial statements.
Overall, the annual report shows that the council is in a very healthy position and the long term outlook looks good.
Financial highlights include:
- debt was $145 million ($27 million less than the forecasted $172 million).
- total income was $121.7 million, comprising general and targeted rates income of $65.1 million and other income (charges, fees, development contributions, revaluations, dividends) of $56.6 million.
- expenditure was $100.3 million.
- operational surplus was $21.4 million ($12.3 million above a forecasted surplus of $9.1 million), or $5.8 million (when capital and non-cash items are removed).
- assets were worth $1.43 billion (this was an adjustment from the figures in the draft report presented to the audit subcommittee).
General rates income grew $310,000. However, net rates growth was around $146,000 when remissions (of $170,000) are taken into account.
The operating surplus of $5.8 million (cash) might initially be seen as council over-rating. However, the surplus can in part be attributed to council’s drive towards reducing operational costs during the year. Remembering that rates are set in the preceding year based on planned spending budgets. Other factors include: increased income from development contributions (as higher levels of development activity occurred), lower interest rate costs (as a result of improved treasury management), and increased income from commercial activity (port and forestry dividends).
The test for council going forward will be how it invests this surplus. I would hope that it is used to reduce debt (and interest repayments), bring forward investment in addressing Richmond’s residential storm water concerns (to reduce the risk for Richmond residents), and provide an increased buffer in the emergency fund should their be another natural disaster (while we address the storm water concerns of Richmond’s central business district).
Navigation safety bylaw
As discussed in an earlier post (see www.greeningtasman.wordpress.com/2015/09/20/full-council-meeting-10-september/) the navigation safety bylaw was expected to come into effect on 14 September 2015, after public notification on 11 September 2015. However, public notification did not occur.
Because adoption of a public bylaw requires public notification the notified dates require modification. Accordingly, council resolved that the navigation safety bylaw would not come into effect from 28 September 2015. Staff confirmed that this was sufficient time for public notification, as the public notice had already been drafted and was now waiting to be released.
Mistakes happen, but its the putting right that counts!
Agenda and minutes
The agenda and minutes are located at www.tasman.govt.nz/council/council-meetings/standing-committees-meetings/full-council-meetings/?path=/EDMS/Public/Meetings/FullCouncil/2015/2015-09-24.