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09 May 2006

MAYOR'S E-COLUMN

COUNCIL FINANCES: PUTTING THINGS RIGHT

Former district councilor Steve Palmer has decided to reinvent history in his criticism of this council’s draft 2006-16 LTCCP, and our accompanying financial decisions. (‘Opinion’ 9 May)

In fact it was his council that botched the 2003 LTCCP and whose errors we are, legislatively, required to correct. Don’t take our word for it: that is also the opinion of the Office of the Auditor-General.

In fact the Audit Office was not impressed with a great many aspects of Mr Palmer’s past council. We have received no less than four separate audit reports criticizing aspects of the past council’s administration and policy. From IT to the harbour, from the under-reporting of debt to the state of the council’s financial management – my council inherited a mess.

Indeed the 2003 LTCCP that Mr Palmer helped shape should be seen as the fiction it is. It underreported council debt, failed to put in place appropriate asset management plans, and banked on optimistic forestry prices. When it later knew those its forestry investments could not be counted on, it deliberately withheld such information from the public.

By contrast the draft 2006 LTCCP has received prior Audit Office approval and has been rigorously checked. The figures are accurate, the assets all properly accounted for, and the financial management both robust and professional. That has been no mean feat.

Consequently, we have had to revise debt projections and they will now peak at $64 million in 2010/11. The cause of that debt is threefold: the stormwater/wastewater project, the collapse of the council’s forestry investments, and more professional asset management.

Obviously it is still too high for our liking. But then so too are Wanganui’s rates.

To that end, we provided a nil rates increase last year and a projected 3% average increase this year – less than the rate of inflation. A 3% rates increase over two years is not simply remarkable. It is the lowest in New Zealand.

We have also looked within - at places that council can save ratepayers’ money. We’ve cut $500,000 from the council’s corporate budget and tasked the chief executive with restructuring senior and middle management. We’ve insisted that commercial operators pay the full cost of council services – and not be subsidised by other ratepayers.

But a council cannot just be about rates and finances. It must create a strong community by creating assets and amenities that the people want. Assets that all the community can enjoy – not just the few.

We’ve done that. Last year the people of Wanganui identified their No.1 priority as the Splash Centre extension. Their second choice was the riverfront development, and their third, the upgrading of the city’s footpaths. My council has made the people’s priorities, our priorities.

Similarly, it will be democracy that guides us on the soft water option. There is enormous public interest in softening Wanganui’s water supply. Our initial estimates are that for a $70 household levy, the average household will save $150 per year on electricity efficiencies and bathing/washing products from having softer water. That $80 per household saving is equivalent to an average 5% reduction in rates.

On one thing, Stephen Palmer is right. This new council does think differently to the last one.

It is more professional, more insistent upon financial standards, more robust in its policy delivery and its acts more decisively and quicker. It also has a clean bill of health from its auditors. Little wonder that the prestigious ‘National Business Review’ recently suggested that all of New Zealand should be following this council’s lead.

Michael Laws
Mayor