Council's working capital down 70%

Ruapehu Bulletin, Volume 15, Issue 693, 1 July 1997, Page 1

Council's working capital down 70%

A number of unplanned events has led to the serious erosion of the Ruapehu District Council's working capital and "buffer" to cope with further unexpected expenditure, councillors were told on Friday. "It is now important to rebuild and increase the working capital to a more realistic level," advised finance manager Eric Lei. As at 31 May this year the council's working capital stood at $733,000, down from $2.53 million just 11 months ago, although the total net assets amounted to $213.1 billion, up from $211.9 bil-

lion 1 1 months ago. -Mr Lei emphasised that the report was an interim one and that a number of end-of-year transactions and accruals would be processed at the end of the financial year (30 June 1997). The working capital drop is put down to: • Arevenue shortfall of $895,000 including the $420,000 Bounce Back campaign eruption 'rates holiday'; council's contribution to the Bounce Back campaign ($35,000); reduction in trade refuse revenue ($60,000) due to reduced trade due to the eruptions; $300,000

in unpaid dividends; legal fees with regard to the Pipiriki Road court case ($80,000). Pipiriki Road Added to that would be the total costs related to the Pipiriki Road works dispute ($329,000). • The repayment of loans totalling $78,600. • The internal loan funding of the Ohakune Water Treatment Plant upgrade ($96,000). « The reduction in loan funds held by $324,000 to $330,000.