Watch Out, Here Come The Chickens!
Thursday, October 16, 2014 at 1:21PM
Bill Barclay

Well at last the penny has dropped, and with todays presser about the Mayor urging spending restraint, our Council has finally come face to face with reality.

Increased rates are a 'pound to a packet of peanuts' as Glenn Leach seeks to soften the blow "after three years successfully reducing the average rate." what a complete and utter disaster - after all that grandstanding that we have been subjected to by Leach while he has taken interminable credit for having reduced rates, and cut operating costs, it now is clear that those reductions were undertaken in the full knowledge that eventually  interest of borrowings to cover the cost of the wastewater plants would have to be costed into the Ten Year Plan.

To claim as he has in this presser that it is all down to the 2007/10 Council is a very clear example of Leach's total inability to understand the first principles of Council accounting - they knew perfectly well from the time this Council took over in 2010 that there were substantial shortfalls on the growth projections, and that the consequent lack of future Development Contributions would demand prudence and caution with future financial planning.

But no, our tyro councillors, led by their bombastic Mayor who had made promises he could not reasonably keep during the course of the campaign set about cutting millions out of the asset renewal budgets to cover the cost of their blatant vote seeking 'empowerment' regime, and then set about cutting rates simply to keep faith with stupid promises. The cuts were totally unjustified, but served the purpose of ensuring re-election.

Well now, these same councillors and Mayor are about to find out the reaction amongst hood-winked rate-payers who will be less than receptive to being told that the all the so-called rate decreases are about to be re-instated, and rates increased.

The spin in this presser designed to shift the blame on to the 2007/10 Council is beyond disingenuous, it smacks of deceit, or ignorance, or both. I cannot believe that CFO Steve Baker, for all his B/S has not issued continuous warnings within the closed-door workshops where all the real work is done in this Council. Those warnings will surely have included the consequences of their failure to accept the need for urgent measures to off-set the interest effects of the un-met growth that has progressed continuously from 2006, or thereabouts. 

Now that the next Ten Year Plan has to dealt with, the inevitable 'catch-up' is about to hit, and there is no way that the effects can be postponed any longer. It will not be at all surprising if a considerable number of the existing raft of councillors decide that their Council days are over when the full effect of rates increases becomes more widely known in the community - that should be some time next year. The extent of their naivety will not be forgiven easily, and the attempt to shift blame on to the previous Council will treated with the contempt it deserves.

The only alternative is for some major cost-cutting to take place that will destroy Leach's Legacy Projects by which he has has placed so much political capital. But there is far more than that involved - countless additional staff have been taken on on high salaries over the last three years more than offsetting the departures of experienced knowledgeable staff who have been snapped up elsewhere. These people have been floundering in their new roles, and there are many new roles - believe you me! In particular, millions have been spent implementing the so-called 'empowerment' regime with odd bods everywhere in area offices undertaking ill-defined tasks either as employees, or under ubiquitous contract arrangements. Deputy Chief Executive Ben Day has had more than a small hand in all this, and of course his knowledge prior to arriving at this Council was mainly confined to the communications area - need I say more.

The more telling statement in the presser is the sting in the tail:

"Mayor Leach praised his team and staff for achieving a satisfying reduction of average rates over the past three years, to the point of reaching the lowest operating cost per rateable property in the Waikato."

There is a reason for that, and it does not reflect well on Leach, councillors, or Council staff. There should hanging heads all around!

 

 


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