The Council has recorded a net surplus of $28.187 million for the year. This is $9.239 million less than the budgeted net surplus of $37.426 million.
Total comprehensive income of $42.067 million includes fair value movements of some of our assets including plant and equipment and cash flow hedges.
The majority of the budgeted net surplus is due to funding received from the Crown to fund capital expenditure projects. External funding for capital expenditure is recorded in financial statements as income in the Statement of Comprehensive Income but the capital expenditure is not. In the 2012/13 year the external funding for capital expenditure was budgeted to be $44.889 million and the actual external funding received was $39.603 million.
|Budgeted Net Surplus||37,426|
|Value of assets vested to Council||10,519|
|These are assets transferred between the Council and an external party and are recognised as revenue or expense accordingly. The majority are infrastructural assets that have been constructed by developers and transferred to the Council on completion.|
|Net fair value gain/(loss)||5,683|
|These amounts reflect changes in the fair value of our investment properties, loans to related parties and interest rate swaps. These movements are non-cash in nature.|
|Net surplus/(deficit) from Wellington Waterfront and Venues Projects and joint ventures||(6,764)|
|The financial performance (deficit) of these entities is not included in the budget and is subtracted. (Excludes fair value movements and gains or losses on the disposal of assets which are shown separately)|
|Changes to External Funding for Capital Expenditure||(6,675)|
|This income is received for specific capital projects and cannot be used to fund operating expenditure.|
|Net gain/(loss) on disposal of fixed assets||(1,127)|
|Council does not budget for gains or losses on the disposal of assets|
|Certain depreciation charges are not funded through rates as they are either fully or partly funded by external parties|
|Surpluses and deficits from our housing and waste activities are ringfenced. Deficits are not rates funded.|
|Underlying funding surplus/(deficit)||(13,295)|
|Further breakdown follows|
|Actual Net Surplus||28,187|
Underlying net surplus/deficit is the portion of the overall net surplus/(deficit) that has arisen from changes to operating income operational expenditure as compared to budget. The underlying funding surplus/(deficit) is an important measure of the overall financial performance of the Council during the year.
The Council has recorded an underlying funding deficit in the current year of $13.295 million. This has arisen because the Council recorded expenditure relating to a reassessment of the provision for weathertight homes which has been partially offset by net savings in operational expenditure.
|Unbudgeted net revenue/(expenditure)|
|Restatement of weathertight homes provision||(14,965)|
|Provision for storm costs||(855)|
|Insurance costs (net of recoveries) funded through self insurance reserve||(451)|
|Significant changes in net revenue/(expenditure)|
|Dividends in excess of budget |
(including Wellington Intl Airport Ltd)
|Decrease in income from activities||(3,276)|
|Decrease in depreciation||2,820|
|Decrease in rates revenue||(2,228)|
|Decrease in net interest expense||1,997|
|Other net variances||2,039|
|Total underlying funding deficit||(13,295)|
The movement in the weathertight homes provision is separately funded through a combination of rates and borrowings so is added back to calculate the underlying surplus available for use. The Council has already agreed to use $3 million of the 2012/13 surplus to fund the Wellington Economic Initiatives Development Fund and therefore has an underlying funding surplus to carry forward of $10.513 million.
|Opening underlying funding surplus from previous years||1,940|
|Items separately rates funded in prior year|
|Movement in weathertight Homes Provision||9,903|
|Underlying surplus carried forward from previous years||11,843|
|Movement in underlying funding deficit from this years result||(13,295)|
|Items separately rates funded|
|Movement in weathertight Homes Provision||14,965|
|Adjusted available underlying surplus||13,513|
|Transfer to reserves|
|Funding Wellington Economic Initiatives Development Fund||(3,000)|
|Remaining underlying funding surplus to carry forward||10,513|
See note 33: Major Budget Variations for more information.