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File: FS/
3 April 1996
From: DIRECTOR OF FINANCE
To: COUNCIL
DRAFT 1996/97 ANNUAL PLAN
FURTHER CHANGES
In the period since the Draft 1996/97 Annual Plan was published there have been a number of matters which have arisen.
They are as follows:
1. Adjustment to Operating Deficits Page 10
Since publication of the draft Annual Plan we have discovered an omission from the financial model in relation to the Housing Account which affects the operating deficit for the Council overall.
Due to the change to accounting procedure relating to cost of capital being replaced with direct interest charges, the interest charge for the Housing Account which amounts to $1.2m have not been included in the financial model. Expenditures and revenues relating to the separate accounts need to be taken into account in calculation of the overall operating deficits.
The effect on the overall financial position is that the operating deficit for 1996/97 now needs to be $2.22m instead of the $1m shown in the Annual Plan. In 1997/98 the deficit will be $750,000 instead of a surplus of $500,000.
I revised the formula for phasing out the operating deficit and bringing in an operating surplus and recommend that changes illustrated in the table below be adopted (the lines labelled `proposed' are the recommendation).
96/7 97/8 98/9 99/0 00/01 Deficit/Surplus - Draft 1.00 (0.50) (3.00) (6.92) (6.67) - Proposed 2.22 0.75 (2.00) (5.76) (6.66) Rate Increase - Draft 3.90 3.62 2.88 2.99 1.63 - Proposed 3.90 3.62 3.11 2.87 2.51
A revised page 10 is attached.
2. Housing - Cost of Service Statement Page 46
The interest referred to above also needs to be taken account of in the cost of service statement for Housing.
A revised page 46 is attached.
3. City Streets - Cost of Service Statement Page 27
The Tram Operation output in the City Streets Cost of Service Statement on page 27 has incorrectly included the sinking fund contributions on the Tram Loan.
This change has no effect overall.
A revised page 27 is attached.
4. Parks - Capital Programme Page 76
The additional amounts for Park purchases which were included by the Strategy and Resources Working Party were incorrectly added to the Strategic Reserves purchases provision. These additions relate to Neighbourhood reserve purchases and the relevant section on page 76 should read as follows:
Reserve Purchases 1996/97 1997/98 1998/99 1999/00 2000/01 Strategic Reserve 630,000 700,000 770,000 690,000 750,000 Purchases Neighbourhood 640,000 500,000 500,000 1,000,000 1,000,000 Reserve Purchases
A revised page 76 is attached.
R A Lineham
DIRECTOR OF FINANCE