10 Oct 2017

Christchurch City Council has received its first “clean” audit opinion since the earthquakes from Audit New Zealand and the Auditor-General for its 2017 Annual Report.

Post-earthquake, the Council has received modified audit reports due to issues determining the impact of earthquake damage on the value of its assets which prevented the Council from fully complying with accounting standards. With the Council able to resolve the last of these earthquake-related issues in 2017, a clean audit report has been given– putting the Council back on the same footing as other local authorities.

The new Sumner Library.

The new Sumner library and community centre is among a host of new facilities opened by Christchurch City Council over the past year.

A modified audit opinion still applies to the 2016 comparative figures. Therefore, the Auditor-General will again report the modification on the 2016 figures to Parliament.

The Council’s 2017 Annual Report, which has been adopted today by councillors, shows the Council is in a stronger financial position. The city’s assets continue to grow as the rebuild gains momentum and the Council’s investment in its subsidiaries continues to increase.

The Council has total assets of $12.8 billion and total liabilities of $2.2 billion, including total debt of $1.7 billion. The Council has net assets of $10.6 billion which is higher than forecast.

The Council spent $581 million across a range of capital projects during the year, against a budget of $536 million. Projects which were deemed to be repairs accounted for $56 million of this investment. Infrastructure rebuild projects, mostly relating to sewage collection and road networks, accounted for $310 million of this spend.

The Council had a $187 million surplus (before tax) for the year against a budget of $177 million. The surplus includes capital revenues and vested assets neither of which can be used to fund operational costs.

The Council received total revenue of $1.1 billion including $427 million from rates, while the operating expenses incurred to run the city for the year were $872 million.

Christchurch Mayor Lianne Dalziel says the Council’s financial results reflect the growth and rejuvenation throughout the city. “We have achieved a number of significant milestones throughout the year and more are imminent. In addition we are continuing to invest in projects and delivering a wide range of services from resurfacing roads and managing the three waters network, to providing parks, pools and sports fields,” the Mayor says.

“Much of the progress is being driven by our infrastructure and rebuild programmes. You can see the results around Christchurch, with heritage facilities re-opening, along with new community facilities in Sumner and Bishopdale.

“Our vision for a travel network that meets our city’s current and future needs means a new active travel infrastructure, and the Council’s investment in this will continue. We’ve seen a lot come to fruition in the last year, and there’s more to come – and that’s why we have so much cause for optimism,” Lianne Dalziel says.

Financial results at a glance

  • The Council’s total spend for the year was $1.4 billion ($872 million operational expenses and $525 million capital expenditure).
  • Rates and other revenue of $1.1 billion resulted in a before tax operating surplus of $187 million. This surplus is mainly due to recognising the value of assets provided to the Council (vested assets) as revenue, and Crown funding of the infrastructure network rebuild.
  • The Council’s total surplus was $736 million, due to accounting items such as revaluations of infrastructure, investments in subsidiaries and financial instruments (derivatives).
  • The revenue from vested assets and the gains on revaluation of assets are not cash items and cannot be used to reduce the Council’s rates requirement.
  • The Council group (including Christchurch City Holdings Limited and other subsidiaries) had an after-tax operating surplus for the year of $140 million with a total surplus of $693 million.
  • The Council has total assets of $12.8 billion and total liabilities of $2.2 billion, including a debt level of $1.7 billion. The Council’s net assets are $10.6 billion.

The full report and the Summary 2017 Annual Report will be available within the next month on our website