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Friday
May102013

Is David Hammond being Cute?

In a full pager in advertisement in the 10 May Hauraki Herald CEO David Hammond follows the Mayor in boasting of the 1.3% average rate decrease, and in addition claims a $9m decrease in the external debt over the period from October 2010 to April 2013 - October represents the date of the election of the new Council. And Mayor Leach was at meetings of each of the community boards that week making the same claim. 

Well Mr Hammond (and Mr Leach), you should know in your position of the importance of comparing apples with apples, and in this case you have been just a little too cute. Our Council operates very much in a 'hand to mouth' situation where there is virtually no cash on hand at any time. Because the internal debt against reserves is fully utilised at any one time, external borrowing represents the actual cash position of the Council.

Therefore, the closing dates for the $20m rate instalments - 8 September, 8 December and 8 April are critical for the purpose of establishing the comparable external debt position - October, and April are incompatible, and further, delays in creditor settlements can bring about substantial changes in the debt position. It is perfectly understandable that in April, there would be at least $9m less borrowing than October – but it is a meaningless claim, particularly as Mr Hammond fails to nominate which day in each of those months he is comparing! 

The only comparable dates for fair comparison of debt is 30 June in each year, and should include creditors. For Mr Hammond to choose these particular dates to make his comparison smacks of manipulation, and could even be characterised as a blatant attempt to deceive ratepayers.   

Clearly, my earlier claim that the Annual Plan indicates an increase in borrowing of some $22m during 2012/14 has ruffled some feathers within the Castle. The figures appear quite clearly on page 124 of the draft plan, and there was no indication of any intention to alter this at the Deliberations. Hammond should come clean, and without delay. 

 

 


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