Annual Plan. Our Annual Plan is our budget, showing the expected cost of running the city for the financial year, and how the costs will be funded. An Annual Plan is not prepared in years when a Long-term Plan is prepared (see Long-term Plan).
Capital expenditure. Capital expenditure, also referred to as CAPEX, is the money that we spend to buy, maintain, or improve our fixed assets, such as buildings, vehicles, equipment, or land.
Cash and cash equivalents. This includes cash as well as deposits which mature in 3 months or less.
Council-Controlled Organisations (CCOs). These organisations were set up to independently manage Council facilities, or to deliver significant services and undertake developments on behalf of the Wellington community.
Current asset. This is an asset that can be readily converted to cash or will be used to repay a liability within 12 months of balance date.
Current liability. This is a liability that is required to be discharged within 12 months of balance date.
Depreciation (amortisation). This is an expense charged each year to reflect the estimated cost of using our assets over their lives. Depreciation relates to physical assets such as buildings and amortisation relates to intangible assets such as software.
External funding for capital expenditure. This is funding recorded as revenue, but used to fund capital expenditure projects.
Fair value. Fair value essentially reflects the market value of assets or liabilities.
Investment properties. These are properties primarily held by the Council to earn rental revenue.
Liquidity/funding risk. This is the risk that the Council will not have access to the required funds to meet its present obligations.
Long-term Plan. This 10-year plan, revised every 3 years, shows the expected cost of running the city for the following 10 years, and how the costs will be funded.
Net borrowings. These are total borrowings, less any funds held on deposit.
Net surplus/deficit. This is the difference between total revenue and total expenses. It includes both operating revenue and operating expenditure, as well as other non-funded items of revenue and expenditure such as capital funding, vested asset revenue and fair value movements.
Operational expenditure. This is expenditure that is not capital expenditure (see capital expenditure).
% (percentage) variance. The difference between the actual performance measure result and the target result is reported as the result’s percentage above or below target. For example, the difference between an actual performance result of 20 percent and the target result of 40 percent is -50 percent. This is because the result is 50 percent less than the target. While the numerical difference between the two figures is 20 percentage points, we do not report percentage point results unless otherwise stated.
Prudential limits. These are limits applied to the level of borrowings to ensure we are managing the Council’s assets and liabilities prudently. These limits are outlined in the Investment and Liability Management Policy in the Long-term Plan.
Ring-fenced funds. These are funds that can only be used for a specific purpose.
Total comprehensive revenue and expense. This is the net surplus/deficit adjusted for fair value movements of some of our assets including property, plant and equipment, and financial instruments such as cash flow hedges. These movements are non-cash in nature and reflect the changing fair value of assets owned by the Council.
Underlying funding surplus/deficit. The underlying surplus is the reported net surplus, less any government funding for capital projects, plus items not required to be funded by ratepayers this year and other adjustements that do not affect the rating requirements of the Council.
Unfunded depreciation. This is the amount of depreciation not funded by rates. This relates mainly to roading assets funded by NZTA and waste water treatment assets where the operator has responsibility for asset renewal.
Vested assets. These are assets created by others and passed into Council ownership (for example, roads built by a developer as part of a subdivision).