Zero Rate Nirvana
Tuesday, April 5, 2011 at 3:36PM
Bill Barclay

Whangamata CB Chair Keith Johnson may be a retired chartered accountant, but he and his Board show little understanding of the manner which the Council has operated its finances for many years, and the circumstances that make his vision of zero rating somewhat unrealistic.

Along with most other similar councils, TCDC has for a very long time borrowed 'internally' against reserves, and they are currently 100% committed in this manner. The $90m. Eastern Seaboard Wastewater Project would probably have been out of the question had these reserves not been available to use in this manner. Reserves can be drawn down, but only with increases in external borrowing, and the scrapping of the Council's long standing overall borrowing limit.

Keith's 'jam jar' analogy is therefore more appropriate to the state of a pre-fruit season larder than full shelves of labeled jars of bountiful produce. This is why more experienced councillors - Cr. McLean in particular, are pushing for the overall borrowing limit of 150% of revenue to be discarded in order to permit what they perceive to be urgent capital works to proceed, and keep rates down.

There is currently nothing available to borrow, either internally or externally to enable this to happen, hence the desire to alter the limit to 180% of revenue. Regardless, and contrary to Board Chair Johnson's apparent perception, there is nothing available in Mother Hubbard's TCDC cupboard, in jam jars or any other container. 

His proposal that the TUGPRA account be used for the Cycleway will cause consternation amongst the Thames CB members who are determined that it should be a 'District' project. In any case, there are legislated rules surrounding the use of the TUGPRA Account. For one, its use is restricted to the environs of the old Thames Borough. 

Board Chair Johnson may need to be reminded of the manner in which Thames rate-payers have contributed to the Whangamata (amongst others) wastewater project, and the various other ways in which the Eastern Seaboard communities have benefited from the much vaunted 'one District' policy.

Deliberations day at Council should be interesting if the Whangamata Board's submissions are representative of those of all of our Eastern neighbours.

 

 

 

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