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Christchurtch City Council Annual General Report 2008 For the year ended 30 June 2009 1


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Contents The Chief Executive’s report

4

Highlights of the year

5

Financial reports

` 8 Audit report

10

Financial report

12

Capital expenditure by activity

13

How your rates dollars were spent

13

Consolidated statement of financial position

14

Abridged consolidated statement of financial performance

15

Abridged statement of finacial performance

16

Statement of movements in equity

17

3


The Chief Executive’s report We have had a year of steady achievement, a highlight for me being the completion of our 2006-2016 Long Term Council Community Plan (LTCCP), with its community outcomes.

A desirable place to live and visit A recently published travel guide placed Christchurch as one of the most desirable places to live, and one of the key responsibilities of the Council is to ensure this continues to be the case. It is always a pleasure to welcome new residents to Christchurch, particularly those who come from overseas and who attend Council’s citizenship ceremony. Similarly Christchurch continues to be a popular place to visit and recently we hosted local government delegates for the annual Society of Local Government Managers conference. Conference delegates such as these bring many benefits to our region and I was pleased to be involved with organising this conference.

Busy year for policy development As well as several significant projects and facilities completed during the year, Council has seen the development and implementation of a range of policies. These will ensure Christchurch continues to be managed in a sustainable manner. The Water Supply Asset Management Plan and the Alcohol Strategy are just two of the many consultation processes that involved our community within the overarching context of the LTCCP. The Alcohol Strategy was a joint strategy with the Canterbury District Council and is a good example of the two councils working together.

2005 Residents’ Survey Our annual residents’ survey this year addressed Council’s democracy and administration activity, including our work on consultation and communications. Other Council activities and issues covered were transport, waste disposal, water quality, the use of fires for home heating, emergency 4

preparedness of the community, urban planning, time spent being physically active and tourism. These surveys continue to provide us with valuable information, particularly regarding the extent of community approval about Council’s activities, and areas where there are concerns.

Financial results for the year This year saw a net surplus of $15.5 million compared to a budget of $12.7 million. The main reason for the higher surplus was $4 million higher vested assets (roading and utilities which pass into Council control when a subdivision is completed) resulting from growth over the last year being higher than budgetted. At the end of the financial year, Council borrowings were $41 million, compared to the annual plan figure of $54 million. The lower borrowing occurred because some projects (in particular the upgrade of the Wastewater Treatment Plant was delayed whilst resource consent was obtained) did not proceed as quickly as planned, and the high level of funding from the subdivision reserve. We continue to be committed to the careful management of the city’s assets and finances, and once again Council’s financial performance refl ects that commitment.

Audit costs It is a requirement of the Local Government Act that LTCCPs from 2008 onwards be audited. This has meant that Council audit costs have increased significantly in 2008/09 compared to the previous year.

Thanks My thanks to the mayor, councillors, staff and the community in achieving these good results for our city over the last year.

Tony Marryatt Chief Executive


Highlights of the year 5


Highlights of the year Below you will find a snapshot of the Council’s 16 areas of activity and finances for 2008-09, with information from the full annual report.

Let’s celebrate The navy poured into town as we partied up at Labour Weekend last year. The Trafalgar 200 commemoration reminded residents and the rest of New Zealand about the origins of this city and its links with history’s most famous Captain, James Cook. There was naval pomp and ceremony in the central city, a huge party for everyone with fireworks on the waterfront as well as a ball and activities out and around the region.

Hooray for recycling Christchurch has waited a long time for local glass recycling and last year we got it! Nelmac and Fulton Hogan have joined forces in a project where glass is crushed and re-used in road construction. Download the new Solid Waste Asset Management Plan adopted in October 2007, that offers new levels of service for waste disposal and diversion from landfill. A landfill and kerbside waste audit gave us an update on what people are dumping, and trial central city recycling bins were installed. The final cost of the gas collection at the landfill was over budget but this was offset with savings in other projects.

The Christchurch Arts Festival was bursting forth in its first year as a stand alone event, proving that it can become a visitor attraction and celebration for locals in its own right.

Clean heat and warm homes Council assisted more than 150 low-income households to convert to cleaner heating options and upgrade insulation. This effort was recognised with a $250,000 grant from the Ministry for the Environment, to further support the ‘Clean Heat Warm Homes’ programme. Ecofest continued to attract growing numbers, spreading the word on environmental matters such as composting nappies and rainwater collection for garden use.

Walking, biking and driving The Hagley Cycleway, upgrade of the Blenheim Road/Deans Ave roundabout and developing the pedestrian strategy were major highlights. Planning for the Atawhai Cycleway extension, Tahunanui twin roundabout upgrade and confirmed funding for the bridge replacement in Stanmore Road are projects that total close to $5 million of new transport infrastructure to be completed next year.

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Not so smelly? The upgrade of the wastewater treatment plant was not completed, but there were only three odour complaints this year from brief seasonal changes in the ponds. There were seven other odour complaints mainly from the No.1 pump station. Smoke testing found the escape routes which were modified. The Trade Waste Management Plan was completed and a grease trap monitoring and data collection programme began.


Stormwater and flood protection As Christchurch grows more essential services are needed. The most obvious stormwater improvements were in lower Trafalgar Street. The city’s rivers were also inspected to assess their condition and the Cawthron Institute continued to monitor stormwater.

Out in the open Christchurch is well provided with parks and open space, and we made progress towards long term asset management of these areas. The management plan for parks and open spaces was approved after discussion with Tangata Whenua and the Botanical Gardens saw further work being undertaken. A toilet block was added at Linwood Park.Recreation and leisure. Surveys show 90% of residents are satisfied with Council’s recreation and leisure activities and why wouldn’t they be? Two-hundredthirteen thousand dollars ($213,000) have been spent in the last year to upgrade the Waltham Pool heating plant, work has begun on the Westpac Trust Centre, $185,000 was spent on playgrounds and youth parks and over $40,000 was given out in grants to groups like Natureland and the Rowing Club. Plans to get us all moving included the Regional Physical Activity Strategy for the top of the South, the Regional Physical Activity Plan and the Recreation and Leisure Asset Management Plan. Libraries, the marina, cemeteries, halls and motor camps are among our community facilities. In the past year we added the water-turf hockey facility at Porritt Park, consulted on the Community Park upgrade and did the groundwork for the development beside the marina.

Smart and sustainable The Christchurch Regional Economic Development Agency helps to foster economic development in Christchurch City, in line with the strategy to create a smart, sustainable region. Christchurch City and Christchurch District Councils are joint shareholders in Canterbury Development, our tourism promotion organisation. Total tourist nights continued to grow by 0.7%, against a national decline averaging -4%. Incomes continue to be below the level of similar sized provincial cities. The Residents’ Survey told us there was also some concern about the ability of infrastructure to cater for population growth.

Keeping safe The targets for public health, licensed premises and complaints responses were all met or exceeded this year, with only food premises complaints just above the target. We had issues with staff levels that affected building and property inspections, and the increasing complexity of processing building consents added to the average processing time.

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8


Audit report

10

Financial report

12

Capital expenditure by activity

13

How your rates dollars were spent

13

Consolidated statement of financial position

14

Abridged consolidated statement of financial performance

15

Abridged statement of financial performance

16

Statement of movements in equity

17

Financial Reports 9


Audit Report To the readers of Christchurch City Council and Group’s Annual Report for the year ended 30 June 2008. The Auditor-General is the auditor of Christchurch City Council (the City Council) and group. The Auditor General has appointed me, Neil Williams, using the staff and resources of Audit New Zealand, to carry out an audit on his behalf. The audit covers the City Council’s compliance with the requirements of Schedule 10 of the Local Government Act 2002 that apply to the annual report of the City Council and group for the year ended 30 June 2008, including the financial statements.

Unqualified opinion The financial statements of the City Council and group comply with generally accepted accounting practice in New Zealand: • fairly reflects the City Council and group’s financial position as at 30 June 2008 and the results of operations and cash flows for the year ended on that date • fairly reflects the level of service provision as measured against the intended levels of service provision adopted, as well as the reasons for any significant variances, for the year ended on that date • the Council has complied with the other requirements of Schedule 10 of the Local Government Act 2002 that apply to the annual report The audit was completed on 31 October 2008 and is the date at which our opinion is expressed. The basis of our opinion is explained below. In addition, we outline the responsibilities of the Council and the Auditor, and explain our independence.

Basis of opinion We carried out the audit in accordance with the Auditor-General’s Auditing Standards, which incorporate the New Zealand Auditing Standards. We planned and performed the audit to obtain all the information and explanations we considered necessary in order to obtain reasonable assurance that the financial statements and the other requirements did not have material misstatements, whether caused by fraud or error. Material misstatements are differences or omissions of amounts and disclosures that would affect a reader’s overall understanding of the financial statements and the other requirements. If we had found material misstatements that were not corrected, we would have referred to them in our opinion. The audit involved performing procedures to test the information presented in the financial statements and the other requirements. We assessed the results of those procedures in forming our opinion. Audit procedures generally include: • determining whether significant financial and management controls are working and can be relied on to produce complete and accurate data • verifying samples of transactions and account balances • performing analyses to identify anomalies in the reported data • reviewing significant estimates and judgments made by the Council • confirming year end balances • determining whether accounting policies are appropriate and consistently applied • determining whether all required disclosures are adequate.

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We did not examine every transaction, nor do we guarantee complete accuracy of the financial statements and the other requirements. We evaluated the overall adequacy of the presentation of information in the financial statements and the other requirements. We obtained all the information and explanations we required to support our opinion above.

Responsibilities of the Council and the Auditor The Council is responsible for preparing financial statements in accordance with generally acccepted accounting practice in New Zealand. Those financial statements must fairly reflect the financial position of the City Council and group as at 30 June 2008. They must also fairly reflect the results of operations and cash flows for the year ended on that date. The Council is also responsible for preparing the information in the other requirements, including service provision information that must fairly reflect the Council’s levels of service provision. The Council’s responsibilities arise from Section 98 and Schedule 10 of the Local Government Act 2002. We are responsible

for expressing an independent opinion on the financial statements and the other requirements and reporting that opinion to you. This responsibility arises from section 15 of the Public Audit Act 2001 and section 99 of the Local Government Act 2002.

Independence When carrying out the audit we followed the independence requirements of the Auditor General which incorpate the independence requirements of the Institute of Chartered Accountants of New Zealand. Other than the audit and in conducting the audit of the Long Term Council Community Plan, we have no relationship with other interests in the City Council or any of its subsidiaries.

Neil Williams Audit New Zealand

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Financial performance Financial Statements for the year ended 30 June 2009 are available to download in the full Annual Report 2008. The Financial Statements were prepared in accordance with generally accepted accounting practice in New Zealand.

Financial results for the year This year saw a net surplus of $15.5 million compared to the budgeted surplus of $12.7 million. The main reason for the higher surplus was $4 million worth of vested assets (roading and utilities) from the surge of new subdivisions. Council borrowings at $41 million were lower than the budgeted $54 million because of higher funding from the subdivision reserve and capital works postponed due to resource consent delays (mainly the upgrade of the North Wastewater Treatment Plant).

Commentary on Council’s financial performance • The fixed and infrastructural assets are significantly greater than budget mainly due to the revaluation of Council’s infrastructure assets which was not provided for in the budget and added $135.6 million to the value of the assets. • The non-current investments are also significantly over budget, mainly due to the revaluation of Port Lyttelton Limited assets which added $15.7 million to investments. • Capital expenditure was well under budget which resulted in lower term liabilities and the higher short term investments.

Commentary of Council’s financial position • The dividend from Port Lyttelton Limited was $750,000 over budget. • The $840,000 net cost of the hockey surface at the sports arena was budgeted as capital expenditure but later treated as a grant as Council does not have ownership. • $450,000 budgeted for the Theatre Royal was not required. • The net proceeds from the Ridgeway Joint Venture were $1.8 million under budget due to slow sales during the year.

Notes The summary financial report has not been audited or examined by the auditor for consistency with the full financial reports. However, the consolidated and individual entities financial reports have been audited. This summary financial report has been extracted from the full consolidated financial report of The Christchurch Council Trust Board for the year ended 31 October 2008. The summary financial report cannot be expected to provide as complete an understanding as provided in the full financial report of the financial and service performance, financial position and cash flows of the entity. Upon request, copies of the detailed financial reports are available from The Christchurch Council Information Centre 49 High Street, Christchurch 12


Capital expenditure by activity Total actual capital expenditure for the 2007/08 year was $18.25 million, compared to the estimate of $29.4 million. The main reason for the difference was the slower than expected progress on the Wastewater Plant, which is now underway during the 2008/09 year. Major capital projects completed during the year include the esplanade and stormwater work at beaches ($2 million), Saxton Field ($1.2 million) and the extension to the City Library ($1.2 million). Sewage disposal includes Council’s share of the regional scheme. There was no capital expenditure for economic and tourism support or social development. Capital expenditure for the following activities was less than 1% of the total, and so they do not register on the graph: environmental management, regulatory compliance, emergency management and culture heritage and arts.

Water supply 8% Sewage disposal 6% Stormwater and flood protection 16% Roading and transport 29% Solid waste management 2% Parks and open space 21% Recreation and leisure 3% Community facilities 9% Democracy and administraion 6%

How your rates dollars were spent The total amount of rates spent was $35.2 million, and includes water charges and drainage rates. This does not include solid waste management as the cost of this activity was offset by user charges. Democracy and administration costs are also not included, as these are managed in the same activity as Council’s investment income. Investment income is always significantly greater than administration costs, so the net result for that activity is positive.

Water supply 21% Sewage disposal 12% Stormwater and flood protection 10% Roading and transport 15% Enviromental management 4% Regulatory complience 4% Parks and open space 10% Recreation and leisure 4% Community facilities 10% Economic and tourism suport 2% Managing emergencies and natural hazzards 1% Social development 2% Culture heritage and arts 5 %

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Financial report Consolidated statement of financial position For the five years ended 31 October 2008

2008

2007

2006

2005

2004

$

$

$

$

$

475,218

373,978

253,175

238,300

235,762

4,652,507

5,254,258

200,119

170,000

81,943

Fixed assets**

14,894,556

14,345,709

18,489,686

15,922,337

15,291,232

Total assets

20,022,281

19,973,945

18,942,980

16,330,637

15,608,937

490,182

1,112,905

429,722

385,850

314,006

Term liabilities

–

–

294,788

343,061

38,734

Total liabilities

490,182

1,112,905

724,510

728,911

352,740

19,532,099

18,861,040

18,218,470

15,601,726

15,256,197

Current assets Investments (at cost)

Current liabilities

Excess of assets over liabilities

**(as cost, less depreciation, site property has been valued at most recent rateable value or market value for 2007-2008)

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The Christchurch Council Trust Board abridged consolidated statement of financial performance For the year ended 31 December 2008

2008

2007

$

$

Surplus for year (as reported in audited financial statements)

671,059

3,977,570

Less capital gain arising from sale of assets

671,059

317,046

-

(3,660,524)

Less grants received to be utilised for capital projects expenditure

(319,543

(188,058)

Other grants (for capital)

(66,134)

(37,061)

285,382

91,927

87,504

90,980

372,886

182,907

Add non cash item, viz depreciation, etc Cash income for year

15


The Christchurch Council Trust Board Abridged statement of financial performance for the year ended 31 October 2008

2008 Revenue

2007

$

%

$

%

1,276,001

44

1,489,827

58

Weekend market licence fees

359,157

12

374,503

14

Events and venue/function income

368,377

13

406,538

16

Grants received

335,043

12

225,119

9

Sundry income, interest, etc

551,407

19

83,525

3

Tenant rentals, car parking & overhead recoveries

Total revenue

2,889,985 100

2,5 79,512 100

Expenses Property overheads and management

873,177

39

948,299

42

Events, venues and market costs

610,641

28

589,800

26

Administration and finance

317,188

14

310,026

14

Information services and marketing costs

333,835

15

323,361

14

87,504

4

90,980

4

Depreciation and disposal costs Total expenses

2,262,466 100

Surplus before non-operating income

667,640

317,046

Capital gain – sale of property/assets

3,419

3,660,524

671,059

3,977,570

Net surplus for year

16

2,222,345 100


Statement of movements in equity

2008

2007

$

$

18,861,040

18,218,470

671,059

3,977,570

(3,335,000)

671,059

642,570

19,532,099

18,861,040

2008

2007

$

$

Operating activities

69,751

1,088,814

Investing activities

(31,180)

(675,618)

(312,693)

Net movement in cash

38,571

100,503

Opening cash balance

215,965

115,462

Closing cash balance

254,536

215,965

Trust funds at start of year Net surplus for the year Revaluation Christchurch City Centre – Market value Total recognised revenues & expenses Total trust funds at end of year Summary statement of cash flows

Cash was provided by (used for)

Financing activities

17


Notes

18


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Christchurch Annual report 2008, Published on 7 July 2009 by Christchurch City Council

Box 237, Christchurch, New Zealand. Tel 64–3–941–8999. Fax 64–3–941–8984 20PO ISBN Number: 978–1–877313–43–1

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