Taxpayers Union - Ratepayers Report Now Available
Friday, June 13, 2014 at 11:31PM
Bill Barclay

Here is the Report: http://ratepayersreport.co.nz/

Take a close look at the figures that the Taxpayers’ Union have produced with the help of hot-shot accountant’s - Grant Thornton’s. All the information was ‘double-checked’ by Fairfax circulating the Report to council's some weeks ago, and maintaining an embargo until last week.

The Q & A attached to the Report is instructive, and highlights some of the difficulties encountered in assembling the information. But this does not gainsay the fact that despite their best efforts to establish credible benchmarks, the age old difficulty of being able to achieve a fair comparison of performance remains – the devil is in the detail, and each Council has sought to show its particular data in the best possible light.  Our Council is no different in that regard – best exemplified by its failure (once again) to acknowledge ‘internal borrowing.’ This begs the question as to just how many other councils’ are similarly reticent.

In our case, the inclusion of ‘internal borrowing’ by whatever name is chosen to disguise its existence, would see TCDC's level of borrowing move into one of the highest categories (nowhere near Auckland and some others of course), but certainly sufficient to raise concerns amongst more fiscally savvy rate-payers.

The defining problem surrounding this valiant attempt to benchmark councils and put in place ‘tables’ that so frighten our education sector in another context, is that virtually every council is dissimilar regarding the content of its balance sheet – both in terms of what is disclosed, and what is hidden. Further, each council is in a different situation regarding its investments, reserves, subsidiaries, and council controlled organisations, and the manner in which they are treated.

Many larger entities are carrying huge debt related to particular events (i.e earthquakes), and the relative age of over and underground infrastructure. This aspect alone devalues any assumptions that may be derived from the information, and the advent of DIA derived data is unlikely to change this situation. It is notable that Paula Bennett drew attention to this defect in her recent statement that "changes to the Act would require councils to include a 30 year infrastructure strategy in future long term plans."

The Taxpayers’ Union may be surprised at what that requirement may reveal, and how relevant factual information that results may be included in the future Ratepayers’ Reports. It may well examine at the same time just how reserves have been raided for unintended purposes, and how this sleight-of-hand has affected the ability of councils to fund future infrastructure requirements. They could start with TCDC!    

How on earth can you construct tables that reflect the varying position in which each council finds itself, and at the same time reveal changes that have been undertaken in time with the three year election cycle to satisfy short term (electoral!) needs, and memory, through rapid changes in rates and debt levels – precisely what has happened in the case of TCDC. This, along with totally inappropriate interference with capital expenditure and renewal levels, constitutes nothing short of subterfuge. And TCDC is by no means alone in this.   

There is just no way that the tables prepared for the Ratepayers’ Report can reflect more than a modicum of this movement, and consequently the relative situation of each and every ratepayer. The Report is fine as far as it goes, but even in terms of establishing the position of each Council relative to others within the four categories that  have been arbitrarily established, it fails – the information cannot be reader manipulated to reflect the situation of a particular Council by way of altering the parameters – they are fixed. More important, they cannot even be moved into an Excel spreadsheet to enable top to bottom comparisons to be made in a manner appropriate to each council.

This aspect is really frustrating, and leaves transparency exactly where it has always been – back in the dim dark ages, despite LG Association President Lawrence Yule fondly claiming the opposite. If he believes it, then he is more foolish that I had imagined. But I don’t believe he does – he must be aware of the shortcomings of this, along with every previous attempt that has been made to achieve a fair and equitable analysis.

TCDC would be even more foolish to sit smugly on whatever laurels it feels able to claim from this information – a noticeable tendency in recent weeks. No doubt these comments will lead to another outburst of uncontrolled fury from the Mayors bully pulpit at the next meeting. If that is the case it will be treated in same way as previously – like water off a duck’s back!

 

 

 

 

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