Storm Damage Funding 
Sunday, January 30, 2011 at 10:02AM
Bill Barclay

On 8 December, Council committed $446,880 from its already severely depleted Disaster Relief Reserve to complete all works required as a result the August 2010 storm event. This is perfectly normal, but staff warned Council at the time that with this commitment, there remained very little in reserve to fund any further storm events in 2010/11.

Unfortunately, we have now been hit with two further events - the earlier one in the month will not have broken the bank, but Friday night's event will definately trigger a request by staff for further funds either from savings on postponed projects from the 2010/11 and 2011/12 works programs, or likely through a special rate.

The scale of the Friday/Saturday event was such that, based on previous experience, we can expect costs in excess of $2m. The event should attract NZTA subsidys of up to 40%, but there is no doubt that substantial additional unbudgetted funding will be required to cope with the level of damage that is likely to have occured around the district.

It may well be that pet projects councillors are wishing to add to the 2011/12 Annual Plan, to be decided on at Thursday's meeting will need to be re-considered. That will be hard for some councillors who  dearly wish to proceed with these pet projects in order to comply with election promises. These include the bringing forward of the Mercury Bay Sports Complex, the Hauraki Plains Cycleway ($450,000), and additional funding for the planning and of local sporting and tourism initiatives in Thames ($150,000).

I intend to prepare a post on these proposals, and the resulting 1.8% breach of Council's borrowing policy limit as soon as I am able to obtain a copy of the 2011/12 Annual Plan, not yet posted on the net along with Thursday's Agenda. 

Readers will be aware from my recent post on Councillor McLean's Vision that the Council is already at its 150% of revenue limit, and my prediction that this breach, being the "thin edge of the wedge" would occur. This is an easy decision - far too easy to replicate in the years ahead, until Council suddenly finds itself in real trouble.

It seems likely that Council will decide both to further breach the borrowing limit, and later strike a special rate to cover the substantial damage costs that lie ahead. Such is the dilemma, and incidentally, the first test for a tyro Council.  Staff will be watching I am sure to see just how they handle it.

 

 

 

Article originally appeared on BillBarcBlog (http://billbarclay.co.nz/).
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