Flood Damage Update
Wednesday, June 25, 2014 at 4:57PM
Bill Barclay

My earlier post on the damage at Cormandel Colville needs to be modified in the light of the information provided by Sam Edlin to Council today. $500k was requested to carry out remediation. But I don't think for one moment that we have heard the last word on this  - I don't believe that the damage we saw on TV3 on Sunday will be rectified with this amount - particularly bridges and abutments, but no doubt this will be the subject of further submissions.

It is possible of course that much of this damage occured on private property - clearly the Wards had a hammering. But Council roads and bridges were clearly part of the story, and major works are required. Let us just wait and see what comes forward at the next meeting. The funds will come from the Disaster Relief Fund - reducing it to around $1.2m.

Then it gets interesting. Steve Baker suggested that no further transfers to the Fund were required at this stage (thus preserving the integrity of the AP to be passed today!) though this may need to be reviewed later in the light of further subsequent storm damage. What he said was that capital works was likely to be underspent to 30 June - $14m remained to be spent, and there was no way this would occur. So, there was  no need to find extra funding for either the Disaster Fund, or the beach erosion problem at Whitianga. A simple transfer was all that was needed.

Steve Baker warned that should such adjustments be necessary, then some 2014/15 projects may have to be modified, or postponed. What this end of year shortfall, and reallocation of resources in the new year reminds us is that our Council has less than rigorous systems in place to ensure that capital works - both new and renewal, are completed on time. This kind of 'flexibility' in an accounting sense is frowned on in any normal large organisation - it does not impose the disciplines that should be required. What Steve Baker explained yesterday regarding the means by which these contingencies could be handled would ring warning bells in any normal boardroom.     

The solutions proposed are bad accounting, and I suspect that Steve and his staff simply wished to avoid inconvenient last minute changes to the Annual Plan - particularly with the time constraints imposed by the 5 business day notice requirement for an Extraordinary General Meeting - something that must be preying on their minds after the Thames Community Board debacle on Tuesday. But that is not sufficient reason for following this course of action - particularly when there were alternatives suggested.

I would point out that unless the Disaster Fund is used correctly for disasters (and there was no suggestion that this was not the case on the occasion) then is no way that a proper record of need over time, or budget under-spends for that matter can be calculated while this sleight of hand stuff goes on.  The fund should be used for precisely this purpose, and appropriate appropriations made as and when required.

I gained the distinct impression that Leach was also unhappy at what was being proposed, but that he could not quite put his finger on just what it was that was bugging him - he is no fool in these matters. On the other hand, no Chief Executive, even one as complacent as Hammond should have allowed this to happen - he even had the audacity to brag to Leach on a note during the meeting about how great it was to be in such a wonderful financial position to be able to meet these contingencies without concern. Excuse me!

I will deal with the beach erosion issue in the next post.




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