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Annual Plan 2011/12 (2)

The Annual Plan was adopted today, and it incorporated all the measures that were agreed on after the consultation round in May. I have already dealt with the financial implications in my earlier post on 28 June, so I will confine myself to just a few observations on rates.

In its press release following today’s meeting, the Council states:

This year the Council has been able to keep rates as low as possible and can now confirm an average -1% average rates decrease.

Savings have been made by reduced operating costs across a number of areas including utilities, savings in staff costs through natural attrition and good all round governance and management of the Council business.

The main savings have been made by reducing operating costs in the following areas. 

Approximate reduction in rates requirements: $1.7M*

Main rates reductions by activity:  

Wastewater: $864,000*

Roading: $350,000*

Stormwater: $203,000*

Thames Urban Water: $83,000*

Mercury Bay Parks and Reserves: $158,000*

Savings have been achieved without reducing agreed levels of service.

*These amounts are the difference between the Draft 2011/2012 Annual Plan and the adopted 2011/2012 Annual Plan. 

These savings amount to $1.658m  Nowhere in the press release is there any indication of the additional $4.9m borrowing that is required to pay for additional capital expenditure at Whitianga and Coromandel.

The savings listed above are mainly deferred works. Severe pressure has been applied on department managers to put off anything that could safely deferred. There is nothing particularly clever about this. The ultimate example will occur in October when they will decide to defer stormwater projects for three years from 1 July next year. Many councils have discovered to their cost the futility of deferring works. Eventually, it comes home to roost.

I applaud a great deal of what Mayor Leach and his new team have achieved since coming to office, but this particular sleight of hand defies logic, and appears to have been put in place to fund the boondoggle, without increasing rates leading up to the next election.

Mayor Leach again attacked "the press" today for misinterpreting the Council's actions, and in effect questioning his honesty. Well, he has no one else but himself to blame.  If he and his councillors did not hide away in workshops, then we would not have to speculate on their motives.

We are not doing our job unless we question the actions of councillors, particularly when most have demonstrated a lack of understanding of financial fundamentals - again, not a single question being asked of the Financial Controller today in regard to the accounts to 30 April. They are surely not that transparent.   




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Reader Comments (1)

What a delight to find erudite and informed comment from you Bill. More power to your typing. I remember that silence about the 6weekly financial report meant that we didn't really understand any implications as lay people. So it was better to say nothing otherwise our ignorance would be on display for all to see.

June 30, 2011 | Unregistered CommenterPeter H Wood.

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