Late Reports Agenda of Council meeting - Wednesday, 27 November 2024

27 November 2024

7 Reports

24.13.27 Adoption of the Audited 2023/24 Annual Report

Doc ID: 1981177

Report Author:	Donna McKewen, Systems and Corporate Accountant
Reviewed and authorised by:	Saskia Righarts, Group Manager - Business Support

1. Purpose of Report

To consider the adoption of the audited 2023-2024 Annual Report.

Recommendations

That the Council

A. Receives the report and accepts the level of significance.

B. Recommends to adopt the 2023-24 Annual Report subject to Audit New Zealand issuing an audit opinion, and subject to any further amendments requested by Audit New Zealand.

2. Background

Under s98 of the Local Government Act 2002, Council must prepare a report assessing its performance against the activities and intended levels of performance, indicative costs, and sources of funds as set out in the 2021-31 Long-term Plan, 2023/24 (LTP Yr 3) and the 2023-24 Annual Plan. This report contains specific financial statements as well as the auditor’s report on those statements and on the performance targets by which performance has been judged. Council adopts this report as part of the normal annual calendar of events. The statutory timeframe for the adoption of the Annual report is the 31 October 2024. Due to issues encountered within the audit Council is adopting the Annual Report 2023-24 outside of the statutory deadline.

The draft annual report was presented to Audit and Risk committee on 3 October 2024. Since then, there have been no changes to the face of the accounts for the 2023-2024 Annual Report. Although there have been a few amendments to the notes, this has not changed the integrity of the Annual Report.

At the date of writing this report, verbal clearance from Audit New Zealand is anticipated forthwith. Staff continue to work with Audit New Zealand on the basis that verbal clearance will be received before the Council meeting on the 27 November 2024. The latest copy of the 2023-24 Annual Report is attached to this agenda for review. Once clearance has been received a final copy will be made available for review.

3. Discussion

The Annual Report will be made available to the public within one month after adoption and a Summary Annual Report will also be prepared subject to Audit New Zealand’s timeline.

4. Financial Considerations

Variances to the Annual Plan

The end of year result has a surplus of $8.756M, compared to the reported budget of $6.030M in the 2023/24 annual plan year three. The most significant variances in income were subsidies and grants and development and financial contributions. The most significant variances in expenses are depreciation and amortisation and personnel costs.

Details of all unaudited variances can be found below:

VARIANCE REPORT for the year ended 30 June 2024	2023/24 Actual $000		2023/24 Annual Plan $000	Variance Favourable / (Unfavourable) $000
REVENUE
Rates		43,992	43,754		238
Subsidies and Grants		9,692	7,493		2,199
Development and financial contributions		3,892	1,717		2,175
Fees and charges		5,737	5,787		(50)
Interest revenue		633	500		133
Other income		15,007	14,665		342
TOTAL REVENUE		78,953	73,916		5,037
EXPENSES
Personnel costs		15,154	14,599		(555)
Depreciation and amortisation		19,495	17,528		(1,967)
Finance costs		1,565	1,456		(109)
Other expenses		33,983	34,303		324
Total Expenditure		70,197	67,886		(2,311)
Surplus/(Deficit)		8,756	6,030		2,726

Capital expenditure

Capital expenditure of $29.267M is lower than the 2023-24 Annual Plan (LTP Yr 3) budget of $39.09M by $9.82M. The overspend in Roading of $1.83M and Environmental Services of $1.63k is off-set by underspends in property and community facilities of $12.76M and service centres and libraries of $0.76M.

2022/23 Actual $000	Capital Expenditure	2023/24 Annual Plan $000	2023/24 Actual $000	Variance $000
14,371	Water	7,971	7,868	103
9,235	Wastewater	3,867	4,072	(205)
376	Stormwater	380	569	(189)
4,856	Roading	5,020	6,852	(1,832)
146	Environmental Services	8	1,638	(1,630)
29	Community, Economic and Strategic Development	-	-	-
1,287	Pools Parks and Cemeteries	1,963	1,481	481
4,317	Property and Community Facilities	18,163	5,394	12,769
178	Service Centres and Libraries	1,105	335	769
13	Planning and Regulatory	222	-	222
603	Governance and Corporate Services	396	1,056	(660)
35,411		39,094	29,267	9,828

Three Waters

The overall assessment of Three waters activities has a small unfavourable variance of ($291k) against the 2023-24 Annual Plan. When assessed against the revised budget there is a favourable variance of $9.2M. The main projects to be completed include: The Cromwell water treatment plant - UV treatment lamps have been procured to meet drinking water requirements and a tender will be going out for the new Cromwell water treatment plant construction in late 2024; Bridge Hill water main – project held back due to some operational issues in the network and will be packaged and put out for tender in 2024/25; and the Cromwell rising main project is continuing into 2024/25 and estimated completion late 2024.

Roading

This has unfavourable variance of ($1.83M) against the 2023-24 Annual Plan. When assessed against the revised budget there is a favourable variance of $3.3M. This is mainly due to the Clyde Heritage precinct projects, which were started in 2022/23 and will continue into the 2024/25 financial year. Footpath renewals and structural renewals bridges have also underspent and will be looking to carry forward unspent budgets, taking into account the NZTA subsidy requirements.

Environmental Services

Environmental services projects include: organic bin roll out of $948k this has been partially funded by the Ministry of Environment grant funding of $569k; Transfer station reconfiguration projects are complete; and glass crushing plant has some customisation to be completed and will be completed in 2024/25.

Pools, Parks and Cemeteries

The favourable variance of $481k is mainly due to the: Alexandra River Park, Lowburn Hall playground, Omakau Recreation Reserve cabins, surface replacement for “The Rec” (Pioneer Park) and the Cromwell sand filter projects that will be carried out in 2024/25.

Property and Community Facilities

The favourable variance of $12.77M is mainly due to the timing of the Cromwell Master plan projects. This includes the Memorial Hall and Town Centre projects. During 2023/24 the Council approved the Cromwell Memorial Hall project, the budget timing has been adjusted through the 2024-25 Annual Plan and will continue into the 2025-34 Long-term Plan. The Town Centre projects will be re-assessed and will be put forward for the 2025-34 Long-term Plan.

Service Centres and Libraries

The favourable variance of $769k is due to the timing of the Alexandra Library upgrade, which is continuing into the 2024/25 financial year.

Planning Regulatory

Projects recognised in the Annual Plan and the Revised budgets have not yet started. The dog registration software project has been included in the information services MagiQ Cloud migration projects and the budget is no longer required. The dog pound projects are still being worked through and will be re-assessed for the 2025-34 Long-term Plan.

Governance and Corporate Services

Information services has been working to tidy up historical projects. The Annual Plan included $201k of capital project with $833k being spent. The total revised budget for 2023/24 was $1.48M with a total of 56% being spent. It is estimated that $599k of projects will be carried forward into 2024/25. Projects include: cyber security, enterprise information systems programme, geographic information systems programme, enhanced digital customer experience programme and user ICT programme.

Vehicle fleet is being re-assessed as part of a change to the vehicle policy. A total of $295k was spent on the vehicle fleet with an Annual Plan budget of $326k. However, the vehicle fleet contributed to $838k of the 2024/25 revised budget a total of 35% of the revised budget being spent. Vehicle replacements will be reviewed for both the upcoming 2024/25 carry forward budgets and the Long-term Plan to ensure the renewals are aligned with the updated policy.

5. Performance measures overview

As part of the ten-year long-term plan, council is required to set performance measures. Every year, as part of council’s annual budgeting process, these measures are reviewed, although council is limited in what can be changed between long-term plan cycles. This allows the community to see the intended levels of service and how these will be measured.

A summary of the individual results is included below:

6. Compliance

Local Government Act 2002 Purpose Provisions	This decision enables democratic local decision making and action by, and on behalf of communities by formally adopting the Annual Report of the Council’s activities.
Decision consistent with other Council plans and policies? Such as the District Plan, Economic Development Strategy etc.	Adoption of the 2023-24 Annual Report is consistent with legislation.
Considerations as to sustainability, the environment and climate change impacts	There are no considerations to be made in this space.
Risks Analysis	There are no risks to adopting the Annual Report
Significance, Consultation and Engagement (internal and external)	This decision does not trigger the Significance and Engagement Policy, nor does it need to be consulted on.

7. Next Steps

Once the Council adopts the 2023-24 Annual Report and Audit New Zealand issues the written audit opinion, this report will be published on Council’s website, along with the Summary 2023-24 Annual Report.

Any recommendations from Audit New Zealand will be assessed and staff will respond accordingly.

8. Attachments

Appendix 1 - 2023-24 Annual Report ⇩


AGENDA Late Reports Ordinary Council Meeting Wednesday, 27 November 2024
Date:	Wednesday, 27 November 2024
Time:	10.30 am
Location:	Ngā Hau e Whā, William Fraser Building, 1 Dunorling Street, Alexandra (A link to the live stream will be available on the Central Otago District Council's website.)
Peter Kelly Chief Executive Officer