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Wednesday
Nov272013

Finances 27 November 2013

I had thought that I would be in receipt of a bollocking over my earlier post 'Oh Dear - the Cupboard is Bare!'. There was ill-concealed fury on the Top Table, and a number of snide remarks, but no attempt to deny the state of the finances that I reported. In fact, the CE indicated verbally during his Report that the financal situation was the worst that TCDC had ever experienced, and suggested a 6% rate increase may result. Leach remained silent, and when referring to the totally inappropriate wastewater plants as the cause, he was reminded by Hammond  "That is history!". 

The upshot is that there will be a 'closed-door' Workshop next Thursday 5 December when the whole sorry mess will be laid out. Amazingly, the monthly Financial Report contained no mention of any of this - once again, it is all sweetness and light. But one interesting outburst from Leach gave insight that he is planning to use the precedent from the last Council when $2m was borrowed specifically to spread the rate impact of the unplanned Thames wastewater sludge removal project. Readers may be aware that the LGA forbids the borrowing of funds for such operational purposes. It was none other than Steve Baker, and Steve Ruru who suggested that this could be accomplished by using the Development Contribution Fund to temporarily cover the interest.

Through the use of this patently thin device, Leach proposes to borrow another $6m to cover the additional interest shortfall that Council is now facing mainly through having irresponsibly reduced rates. I think he figures that he can avoid the opprobrium, and more particularly loss of face should he be forced to support the 'special' rate increase that I forewarned in the earlier post. Frankly, I don't think he will get away with it - this is not just a two year 'smoothing', it is a major hit into the future, and I suspect that no matter how much he twists and turns, the rate increase is inevitable - it is just a question of how much, and when?

The whole table looked to be squirming on this - it is they who allowed Leach to have his way on the rate decrease, and it must be hurting to now have to admit this gross mistake - oh, to be a fly on the wall on 5 December - there may be more than a few recriminations.

 

 

 

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