Auckland Council’s 2015/2016 unaudited financial results show its debt increased over the past 12 months within agreed levels, while the value of its asset base grew over the same time.
Total net group debt, which includes that held by the council-controlled organisations such as Auckland Transport and Watercare Services, was $7.4 billion as of 30 June 2016, an increase of $486 million from the previous year, but $324 million below budget because the construction of some capital projects has been delayed.
Debt within budget
“These results show we are effectively balancing the need to invest in Auckland’s future with keeping our debt at sensible levels,” said Kevin Ramsay, acting Group Chief Financial Officer.
“The council always ensures we use debt sustainably and that it is affordable for both current and future ratepayers.”
Asset value also up
While debt has increased, the value of the council’s assets which back that debt has also risen. In the 12 months to 30 June 2016, the value of total assets increased to $44.7 billion, an increase of $2.5 billion on the prior year.
“The value of these assets puts us in a very strong financial position,” says Mr Ramsay.
Carefully monitored
The council constantly monitors its debt levels and has a number of ways debt can be shrunk, should that be necessary.
These include cutting capital expenditure, reducing service levels in some areas, selling surplus assets, finding more efficiency savings and/or finding ways to increase revenue.
