The state of Hamilton City Council’s books prior to the impact of COVID-19 were laid out at yesterday’s (April 28) Finance Committee meeting.
Progress updates on the capital portfolio monitoring, annual monitoring, and financial strategy monitoring reports were presented for the eight months to the end of February 2020.
Financial Controller Tracey Musty says that while the Council’s financial position will have changed considerably since the reports were written given the onset of COVID-19, it was important the Committee had an opportunity to analyse the financial performance of the period.
“Obviously a lot of things have changed since these numbers were calculated,” says Miss Musty. “What the reports do show is the financial position the Council was in immediately before the fallout of COVID-19, to inform Elected Members about the next steps the Council can take to help our city recover from the impact of the lockdown.”
Outside of today’s meeting, Elected Members are being updated frequently on how COVID-19 has impacted the Council’s finances. The Council’s financial strategy in light of COVID-19 will be discussed at a briefing on 13 May 2020.
Capital portfolio monitoring report
The capital portfolio monitoring report focuses on both the financial performance and the physical output of eight capital programmes (City-Wide Community, City-Wide Waters, Peacocke, Rotokauri, Rototuna, Ruakura, Transport Improvement, and Renewal and Compliance).
Today’s report showed $122.7 million was spent to deliver the projects in the 2018-28 10-Year plan between July 2019 and February 2020, compared with $78.5 million in the same eight months in 2018/19. This included completing the Surrealist Garden at Hamilton Gardens, the eel exhibit and aviary projects at Hamilton Zoo, the Borman Road West connection to Kay Road in Rototuna, safety upgrades to the intersection of Bryce St and Anglesea St and much more.
The report also outlined the status of more than 30 projects that have been impacted by the Alert Level 4 lockdown resulting in funding being deferred to other financial years.
Annual monitoring report
The annual monitoring report tracks Council’s financial performance against what’s in the 2019/20 Annual Plan
As at 29 February, the Council had an accounting result surplus of $63.7 million, which is $11.4 million more than anticipated. From a balancing the books perspective, the Council was tracking $7.8 million higher than forecast at the end of February.
Financial strategy monitoring report
The financial strategy monitoring report informs the Committee of the status of the financial measures set out in the 2018-28 10-Year Plan – debt to revenue, net debt, and balancing the books forecasts.
As of February, the debt-to-revenue ratio forecast in 2019/20 was 139%, against a budget of 191%. The net debt forecast was reduced to $400 million compared with the $588 million budgeted for 2019/20 in the 10-Year Plan. The 2019/20 budget saw the Council achieve its balancing the books measure, however, the forecast is now for an $8.3 million unfavourable result.
Non-financial service performance report
The Committee also received a report on the Council’s non-financial service performance measures for the October to December 2019 quarter.
The report looked at 50 KPIs (Key Performance Indicators) covering the range of Council activities, such as visitor numbers to facilities, customer satisfaction scores, community perception, and the safety of the transport network.
The majority of the measures were achieved in the quarter. Two of the measures will not be achieved in 2019/20, relating to GDP growth and a wastewater discharge into the Waikato River, and another two are forecast not to be met – customer service survey results and the supply of industrial land.
Results well above the targets were recorded for customer satisfaction with community facilities, the time to respond to water and wastewater issues, and the percentage of household waste recovered for recycling.