Appendix 1: Reported effects of the Canterbury earthquakes

This Appendix summarises the effect on operating revenue and expenditure and capital expenditure of the Canterbury earthquakes on the five closest local authorities, as reported in their 2010/11 annual reports. The five local authorities closest to the largest earthquakes' epicentres were Christchurch City Council, Environment Canterbury Regional Council, Hurunui District Council, Selwyn District Council, and Waimakariri District Council.

For the five local authorities, we have not set out all of their disclosures about the effects of the earthquakes. The local authorities' annual reports should be read for the full account of the effects.

Christchurch City Council and group

Annual report commentary on damage to assets

Christchurch City Council states that the:

... 29 September estimate of the cost to replace or repair destroyed or damaged assets was $2.4 billion, plus 27 percent or minus 25 percent. To this needs to be added the $0.2 billion of damage to buildings, alongside with the as yet un-calculated cost of land remediation. When the cost of maintaining temporary services (the interim repair and maintenance of assets prior to the permanent rebuild) is excluded, the cost of the damage to Council assets is estimated to be $2.4 billion, plus 26 percent or minus 25 percent (more than $0.5 billion).

See Christchurch City Council's disclosures on the effect of the earthquakes, specifically on pages 138-143 of its annual report and in the financial highlights section of the annual report (pages 124-129).

We issued a disclaimer of opinion on Christchurch City Council and group's financial statements, other than the statement of cash flows, because of the effect of the Christchurch earthquakes on property, plant, and equipment.

Christchurch City Council disclosed that $54 million has been recognised in the financial statements for the write-off and impairment of earthquake-damaged assets. The $2.4 billion estimated damage has not been recognised because it is not reliable enough, and as yet there is not enough information to appropriately account for the damage caused.

Environment Canterbury Regional Council

The estimated cost to Environment Canterbury Regional Council of the earthquakes has been about $4.5 million of direct operating costs, plus the damage to Environment Canterbury Regional Council's assets, which amounts to $12.6 million.

The Kilmore Street office complex was also badly damaged, with the Aoraki building to be demolished and the Pegasus and Waitaha buildings unable to be used. The state of the Pegasus building has not been determined, because only limited access has been allowed since February 2011.

We refer readers to Environment Canterbury Regional Council's disclosures on the effect of the earthquakes in its annual report and specifically on pages 39, 49-50, 54, and 59.

We issued an unmodified opinion on Environment Canterbury Regional Council's financial statements and service provision.

Hurunui District Council

Hurunui District Council provided no specific disclosure about the financial effect of the Canterbury earthquakes.

We issued an unmodified opinion on the Hurunui District Council and group's financial statements and service provision.

Selwyn District Council and group

Selwyn District Council disclosed that:

By the end of the financial year the Council had incurred costs of $4.8 million on repairing damaged assets and it estimates that the total cost to repair its damaged assets is $7.2 million.

We refer readers to Selwyn District Council and group's disclosures on the effect of the earthquakes in its annual report, specifically on pages 125-126.

We issued an unmodified opinion on the Selwyn District Council and group's financial statements and service provision.

Waimakariri District Council

Waimakariri District Council disclosed that the damage its property, plant, and equipment, and infrastructural assets has been accounted for in the financial statements by recognising a $60.1 million impairment against these assets.

We refer readers to Waimakariri District Council's disclosures on the effect of the earthquakes in its annual report, specifically on pages 125 and 165.

We issued a qualified opinion on the Waimakariri District Council and group's financial statements and service provision information, other than the statement of cash flows, because of the effect of the Christchurch earthquakes on property, plant, equipment, and infrastructural assets.