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Brian Anderson The Western Front www.sunlive.co.nz |
Western Bay of Plenty District Council has sunk to the bottom group of 11 'cellar dwellers” in the comprehensive 2013 New Zealand Council Ranked League Table. The table ranks councils on their financial sustainability and the affordability of their council rates and charges. WBOPDC has dropped from 42nd to 58th out of 67 councils since last year.
This puts the council in a group described in the report as 'councils (that) struggle either due to their poor financial condition and/or their unfavourable scale/demographics. They will all experience difficulties in servicing even the basic needs of their citizens as a result of their past maladministration ... or straight out profligacy and/or as a consequence of local community unaffordability issues.”
Statistically, both Western Bay's population and community affordability score are above the national average. WBOPDC is in trouble and is unwilling to change or admit failure but is determined to keep pushing rates up for at least the next five years to cover their tracks.
The league table was published by Larry Mitchell, a finance and policy analyst on local government.
Perhaps unsurprisingly he is highly regarded by councils who are at the top of the table but dismissed by the councils at the bottom. Clutha is top of the table, Thames Coromandel is 27th, Auckland 34th, Tauranga 40th and Rotorua 59th - after WBOPDC.
Previous league tables with background to the analysis were offered to councils to help them with their planning.
This year, Larry is also addressing community and ratepayer groups to help them understand their council's annual plans; and to give the ratepayers information to use to challenge councillors in the local body elections.
It is important that the table is read in conjunction with the council's annual plan, released this week. The annual plan looks different, has more information in it but this makes it difficult to understand without help.
Beware. The Mayor spoke last week of a $103million debt while the annual plan acknowledges a current debt of $153million – and there was talk of the debt rising to $197million in a few years.
The average cost of interest payments across New Zealand has risen from 14 per cent to 16 per cent of the council rates but it is obvious that WBOPDC is much higher. We only have about two weeks to do our homework and exercise our democratic right on the annual plan before submissions close and our rates are set.
The table notes a WBOPDC debt of $5000 to $10,000 per ratepayer for the bottom councils.
Roger's Rabbit's calculation last week of a $7500 debt per ratepayer in WBOPDC is close to the mark.
Tauranga ratepayers are worse off than WBOPDC with debt of more than $10,000 per ratepayer but this council is in a slightly sounder position with higher net assets which keep it just out of the 'cellar dweller” list. The table, and documentation on how it was derived, are available by Googling Larry Mitchell LGLT. Financial unsustainability and high debt per ratepayer is the main problem for the council.
The collapse of councils like the Western Bay is attributed by the report to their unwillingness to follow the changes that were heralded by the government in 2010 and implemented in December 2012. In most cases, these councils have not accepted government advice and direction given during the last three years – intended to 'encourage” councils to modify their existing behaviour.
Councils are supposed to deliver their services on 'most cost-effective” terms. Annual plans now have to 'revise their levels of service, deliver expenditure savings, steady lower debt and lower rates”.
Thames Coromandel Council has lowered actual rates twice in the last two years by accepting the need for change. WBOPDC increased rates 9.4 per cent last year and expects to increase rates this year by about 7 per cent. Bearing in mind that the more expensive urban house rates went up 16 per cent last year – these ratepayers can expect a combined rate increase, during the two years, of about 25 per cent.
WBOPDC and other councils are being left behind. This council needs to change now. The current crime is 'following the same old same old”. Just replacing the council with a new crop at election time is not going to help if they continue the same approach. The honesty we need is not just more transparency. The new councillors will have to change the way the whole council operates and catch up with the rest of the country.