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Wednesday
Aug092017

Storm Damage

It is important that everyone be aware of the cost of keeping our roads open over this incredibly bad winter when slips have become almost an everyday occurrence.

The inevitable Report came to Council yesterday until Infrastructure Group Manager Bruce Hinson's name. It was sobering to say the least. It has put the state of our Disaster Reserve Fund into stark relief since it was set at a maximum of $1.5m in the 2014 LTP. It is currently $1.267m, but after 2016/17 expenditure, it will reduce to $487k with 11 months of the current year remaining. It will clearly need to be reinstated with a substantial effect on our Council's cash position.

As the result, it is proposed to access the Retained Earnings Reserve which can be used to cushion the effects of unanticipated expenditure, but some of these reserves (by Area) are below the 10% of local annual expenditure mandated in our financial policy. Where necessary (particularly Whangamata where major damage occurred), borrowing will be necessary.

In effect the 2016/17 storm damage expenditure was $1m, and the projected 2017/18 expenditure is currently $1.8m.

The final recommendation was to fund the shortfall from 'retained earnings' where available, and then from loan funding from the respective Community Board areas.

Anything to avoid any effect on rates - this of course insulates ratepayers, temporarilly, from the effects of climate change as these storm effects accelerate. This is a short term solution, that is as much to protect councillors from any ratepayer backlash, as any acknowledgement of the need for sound financial practice.

Eventually, the chickens of borrowing for this operational purpose will come home to roost.

 

 

 

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Reader Comments (1)

We have a new gym though - that we can use to build up our strength so that we are able to clear water-tables and drains, clear slips, widen roads, cut up fallen trees, shift rocks and debris from the coast road - or, row a dinghy into town when all the above fails.

August 9, 2017 | Unregistered CommenterRussell

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