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Monday
Apr042011

Borrowing Limits

There is undoubtedly an intention amongst several - possibly a majority of councillors to raise the Council's borrowing limit - see post on 'Councilor McLean's Vision' on 26 January in particular for an explanation on what is proposed.

Everyone should be concerned about this attempt to prevent otherwise inevitable rate rises by the use of this 'slippery slope' device, and be prepared to remind councillors of their election promises as we approach the May Annual Plan hearings on 9/10 May, deliberations on 11 May, and decisions on 25 May.

It is to hoped that many of those who have expressed concern about this matter in the past have made submissions, and are prepared to face up at the hearings. The danger arises from the attitude revealed by Mayor Leach, and BM Yates who implied at the TCB meeting on 21 March that the views of submitters on the cycleway may be disregarded in favour of the assumed views of the 'silent majority', and that contrary views were "small-minded and parochial". Cr. Hoadley's expression was "small town".

What arrogance, what a breath-taking denial of the democratic process, and what splendid responses from Geoffrey Robinson and Mike Cunnington in Friday's HH.

It has also inspired ex-Councilor Dal Minogue to write in response to my posts. I reprint his letter here because it raises some important issues. Dal and I had some good scraps on the previous Council, but we saw eye to eye in the main - particularly on management shortcomings, the wastewater issue, and rates. I regard Dal as one of only two or three on the previous Council who were sound, and did their homework. His mostly justified, and well publicised spats with the previous Mayor created mayhem at times, but he kept staff and other councilors on their toes.

I can see nothing similar on the current set-up - they all appear terrified of arguing about anything, lest it be seen as 'discord'. It is by this means that Mayor Leach manages to create the illusion of 'harmony'.

Here is Dal's letter:

I have read with interest comments you have made in relation to the Councils self imposed debt limit that is about to be breached by the Leach Council. The principle behind establishing this debt limit was extremely important as you have outlined. Here are some further thoughts about the matter that might help your readers fully appreciate  what is at stake in what is being proposed by the new Council.  

In the previous Council the structure to ‘force’ cost efficiencies was through limiting Council borrowing to 150% of annual revenue over the next 10 year period. This stricture was designed to ensure that annual rates rises would be limited to 1–2.5% and that new capital projects could be introduced only if and when cost efficiencies could be made.

The new Council, despite all sorts of talk about creating cost efficiencies, has agreed in its draft 10 year Plan to increase the limit of Council borrowing to 180% of revenue and has already started to bring forward significant capital spending. Thus in the 2011 Annual Plan, as you have rightly pointed out, the Council will for the first time break the 150% borrowing limit. This action simply does not fit with the claim of the new Council that they are “building a new vehicle for cost efficiencies to drive us into the future”.

We are already getting an average rates rise of over 3.5% for the 2011 financial year with the Council attempting to claim it is only 2%. I wonder by what degree further rates rises will supersede those planned for in the Councils current 10 year budget plan?  Make no mistake, it is consistent adherence to a well thought out high-level policy principle about limiting debt that will create Council cost efficiencies, not loose talk, wishful thinking and contradictory actions! 

Dal Minogue.

 

 


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