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Long Term Plan

I will endeavour to post the salient details extracted from the documents that will remain 'draft' until approved on 4 March and subject to subsequent consultation.

The first and most important statement is on the first page of the document that provides the rating impacts over the ten year term:

Staff have amended the 10 year budgets with the direction given at the December 2014 workshops and applied retained earnings and reserves where it was considered appropriate and prudent. The forecast average rating impacts are listed below and fall within estimations given by staff at the workshop.

Average rating impacts forecast for the ten years (from 2015/16) are as follows:

3.57%   1.94%   3.76%   0.97%   2.06%   2.01%   1.04%   1.12%   1.49%   1.31%

In completing the financial modelling based on the direction gained from the council 2 workshops a significant change has resulted in the amount of wastewater debt to be moved from development contribution debt to ratepayer debt. At the December workshops it was noted that the projected growth levels were considerably lower than previous plans to the extent that some of the remaining capacity would not be taken up prior to the asset reaching its useful life. On that basis it was agreed to transfer the debt associated with that capacity to the ratepayer, as there would be no development funding received for this portion of debt. This changes the estimated wastewater debt to be transferred from $31 million to $46 million leaving $8.8 million to be paid by future development.

I have placed this last para. in bold because of its significance. By a bold stroke of the pen, it is proposed that developer liability be transferred to the ratepayer - not just a few million, but $46m, leaving $8.8m to be paid by developers through future development. Wow! - what a cheek.

The rationale is based on the perceived life of the Eastern Seaboard waste-water infrastructure. This is of course totally fallacious because we know from past experience that in almost every case these modern plants will outlast their planned life by several decades - upgrades yes, replacement - rubbish! The current perceived life is out to about 2040. ( I will check this when I get the the Infrastructure Paper!)

What we do know is that there has been a concerted effort by developers (all the usual suspects!) to cry poor, and claim that their ability to sell sections has been restrained by the high cost of the DC's. And our Council has bought into this scenario, and rewarded past support from that quarter.

As for the underlined sentence above, you can take it as read that the 5.5% average increase proposed at that 'workshop' was deeply offensive to councillors who had been told for the last four years that their 6% decrease was not only prudent, but warranted. Even they must have been embarrassed by the claim of the Mayor and Chief Executive that these decreases had put the Council in a better position to deal with the new increases - wiping out all their 'good' work, along with the smiles on their faces. 

Even before examining the accounts, it must be clear to blind Ned that the only way that they have hauled all the proposed increases back to an acceptable level must be through increased borrowing, and disguising the liability transferred from Development Contributions. I wonder how they may have done that - probably through mucking around with 'targeted rates.' I will have a very close look at the schedules to see what is going on - they will probably attempt to recover about $10-15m over the ten year period if I am not mistaken in order to cope with "the change of circumstances."  




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