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Cr Bill Faulkner Faulkners Corner www.sunlive.co.nz |
At full council last week elected members grappled with a most unusual dilemma – what to do with $2.7 million surplus money, your money.
Staff told us the surplus arose from better than expected interest earned on monies held during the year, savings on staff positions held over during the downturn and savings on costs not incurred with a reduced capital expenditure programme, amongst other things. This money was over-collected off you after council had produced an annual plan outlining why it needed that amount of rating revenue and consulted with you on that.
Had it been underestimated, council would have been dipping into your wallets (and purses) to make up the shortfall.
Conversely, if there is a surplus, shouldn't it go directly back to you?
Council has a policy, which has been to public consultation, that says $500,000 of any surplus should go to debt repayment so that should be done.
The rest is yours in my view, but at the meeting a further $500,000 was set aside in anticipation of leaky homes settlements.
If this need does arise it can and should be accounted for in the rating year it occurs.
Anyone reading the Bay Times report of this, who didn't understand what was going on, can be forgiven.
It was a convoluted report that failed to explain that it was only the amount of money to be returned directly to ratepayers that was at issue.
The vote was 5-5 with Mayor Stuart Crosby using his casting vote for $1.7m to ratepayers $500,000 for leaky homes and $500,000 for debt repayment.
David Stewart voted against, wanting $2.7m for debt repayment and I voted against wanting $2.2m to be returned directly to you, but for the reasons outlined above, and $500,000 to debt repayment.
So we are all voting to return the surplus to ratepayers in one form or other – it was just the mechanism to be used that was at issue.
Cutting back bridge costs
In the three year/Ten Year Plan there are some items of planned expenditure of concern. One is a proposed $600,000 to replace the Matapihi Railbridge walkway.
I am familiar with this walkway and asked staff for an onsite inspection to show me what they and the consultant were referring to in recommending full replacement.
A number of other elected members joined in the inspection together with interested staff and the CEO.
I asked if all the timber had been inspected for fault and was told it hadn't.
As we walked over it, it became apparent that maintenance had been neglected and some repair was required.
The fencing needed replacing, some coach bolts replaced and split bracing needed attention – but replacement appeared excessive, expensive and unnecessary.
This is a pedestrian way first and foremost and was built in the late 1950s in response to a number of deaths as people walking across the railbridge fell or were knocked off by trains. Yes it is narrow for cyclists, but it is a pedestrian way so cyclists need to be careful. This project will likely be formally removed from the list.
Riding ahead
In other three year/Ten Year Plan cycling matters there is allowance for 10 commuter routes over 10 years at a cost of $150,000 a year.
If petrol ceases we will have the widest and best cycleways available and we need to consider the wisdom of this expenditure given our financial situation.
At present, first cut (not being the deepest) for rates revenue increase next financial year is for 7.5 per cent with extras yet to come.
These could add another one per cent or so depending on how some will be funded – like loan or direct rating.
Cuts needed
There are substantial projects and services cuts to be made to achieve the stated aim of about five per cent increase and $100 million debt reduction. It's tough tummy muscles or a cynic might say that the plan is set up to fail.
Pools rebuild pricey
Mount Hot (Saltwater – now genuine saltwater) Pools rebuild overrun of about $500,000 was explained at the projects and monitoring committee; total is $2,304,550.
Deferred maintenance, future proofing, and no as-built plans contributed, elected members were told by the overseeing consultants.
It was a disappointing outcome considering that the original estimate was $1.5 million.
In my view, part of the problem is, for all intents and purposes, the handing of public assets to private enterprise.
The incentive is to make money – sometimes this can be at the expense of maintenance.
Fay Richwhite running the rail network is an example, but if council runs things it's not good at the money-making bit.
A real conundrum, but in the end the poor old ratepayer is left holding the can.
It's best councils stay out of everything it can, and leave it to private enterprise.
Village all in order
After a year, the Project Steering Group (PSG) has recommended more of the same for the Historic Village; run by council with an ‘advisory' group.
I successfully moved an additional resolution to the recommendations – 'that the village finances be self sustaining with no rates funding being allowed”.
PSG chairman Murray Guy opposed this saying he wasn't opposed to some ratepayer funding.
A staff request to immediately allow long term leases was deferred as I said this would pre-empt any change to format an advisory group might require.
The village has been a big financial drain on ratepayers in its chequered history and it is imperative that we learn from history and not allow the rates situation to recur.
This proposal will go out for public consultation separate to the three year/Ten Year Plan early in 2012.
This week's mindbender from Goethe: 'Many people take no care of their money until they come nearly to the end of it, and others do just the same with their time.”