Storm Damage Funding
Tuesday, May 24, 2011 at 10:28AM
Bill Barclay

There is something regarding storm damage funding in the report to be presented to Council tomorrow that does not quite add up.

These were comments that I made in a post on 31 January following the Cyclone Wilma hit on the Peninsula:

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 definitely 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 subsidy's of up to 40%, but there is no doubt that substantial additional unbudgeted funding will be required to cope with the level of damage that is likely to have occurred around the district.

This was based on the report that was presented to the 8 December meeting when John Whittle indicated that the incidents that had occurred during the first half had depleted the fund to the point that were any further incidents to occur, that the Disaster fund would need to be re-funded, and  budgets adjusted accordingly.

I was not too far off the mark by the way with my estimate of 31 January damage amounting to $2m. It actually came to $1,844,500 - less the 45% NZ Transport Agency subsidy - TCDC Funding $1,014,475.

There has been no further report to Council since that date as far as I am aware, until this report that is to be presented tomorrow which contains the following statement:


The current disaster relief Budget is $1,267,364. Should Council fund its share ($371,250) of the January 2011 storm event 2010/11 from the Disaster Relief Reserve budget, the reserve balance will be $896,114.

As the permanent re-instatement works associated with the January 2011 event are programmed for completion over two financial years, there will need to be a $643,225 commitment recognised to fund the balance of the work from the 2011/12 Disaster Reserve.

What concerns me is just how the the Disaster budget is standing today at $1,267,364 when Council was advised on 8 December that it was shot.

The report indicates that should Council fund its 2010/11 share ($371,250) from the fund, that $896,114 will remain. Council is warned that this may be insufficient to cover any further events in 2010/11.  $643,225 will remain to expended from the new budget in 2011/12.

This gives rise to the question as just how the Disaster Reserve Fund happens to still contain $1,267,364 in the light of all the claims that occurred in the first half of the year, and in view of the statement made to the 8 December meeting. All very puzzling, but all will no doubt be revealed when appropriate questions are asked of staff at tomorrows meeting, as no doubt they will be! 

Later in the Day

I now see that the the accounts state categorically that:

Remedial work for storm damage in relation to 2009, June 2010, August 2010 and January 2011 amounting to $678,000 were not budgeted for, and are therefore recorded as over expenditure. On 29 October 2010 Council approved expenditure of $264,000 for the June event and a further $120,000 for 2009 events. On 8 December Council approved a further $446,880 for the August event.

I hope that is all clear. It certainly is not for me, and you have to wonder if the two departments concerned talk to one another.  

The Following Day

I am still flummoxed as to just how the Disaster Relief Reserve operates - and no-one asked any questions today to elicit answers, so they must all understand what it all means. I questioned Services Manager John Whittle late yesterday, but he was unable to throw any light on the matter.

Quote 8 December - John Whittle (Services Manager)  - "the Disaster Relief Reserve is exhausted".

Paper 2 May - Matt Busch (Roading Manager) - "The current Disaster Relief Reserve is $1,267,364

Paper 2 May - Steve Baker (Financial Controller) -  "Remedial work for storm damage to January 2011 amounting to $678,000 is not budgeted for, and therefore recorded as over-expenditure".

I give up - you work it out.






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