Cr Bill Faulkner Faulkners Corner www.sunlive.co.nz

Tauranga City Council's credit rating has been raised from ‘A' to ‘A plus' by credit rating agency Standard and Poors (S&P).

In accompanying notes, S&P say they have done this on 'strong institutional framework” and with outlook 'stable”.
There is strong cash operating performance, minimal contingent liabilities, although debt levels are high. All this at a time when the same agency is warning of a credit downgrade for New Zealand, and the government was reportedly caught unawares by the move.
Tauranga City Council's expected good news comes as a result of sound financial decisions, strong financial management and close monitoring of council's books. As has been noted previously, the most practical way to fund a growing city is by borrowing in much the same way as you do when you buy a house. Provided it is well managed, it is a fair and equitable method of providing services and amenities for today's users, at the same time ensuring future users also share in the costs.
Some are never happy
This news should, but probably won't, be of comfort to those armchair critics, who regularly predict doom, gloom and despair over council debt. Such comments say more about a lack of understanding about forward funding works and services. Tauranga City Council is a good bet going into the future provided the present systems, governance, management and monitoring continues. The fine balance between rates, increases, levels of service and new amenities will receive ongoing scrutiny from the new council from what has come forward in informal discussions since the recent elections. We might even be able to offer financial advice to the government. Just kidding! There are some hard decisions coming – to do some things – and even harder decisions to decide not to do other things.
Opening up services
It is interesting to hear Rodney Hide, Minister of Local Government (outside of cabinet) talking about the next phase of Local Government reforms. In my opinion, one of his objectives is to wrest monopoly services like water and wastewater away from councils. Having done this paves the way for future privatisation ‘grabs' in much the same way the overseas investment vultures pounced on electricity after Max Bradford's ‘reforms'. Remember how much better off we were all going to be?
With the benefit of hindsight, here's how it is. Max Bradford is gone. Private shareholders own a monopoly and charge what they like as witnessed by huge profits. All cost increases are passed on instantly to consumers (plus GST of course). In a small country like ours, where there is no scope for real competition, some form of public ownership is essential to control monopoly services.
Petrol, telephones, electricity, all with no real competition should forewarn us of what could come with political interference in council infrastructure.
Rodney Hide says the Bill will encourage councils to focus on core services – such as infrastructure, public transport, rubbish collection and recreational facilities. He allows plenty of ‘outs' in his speech. His political two step dancing would be put to better use on his Dancing with the Stars appearance.
Where now for village?
At a meeting with stakeholders of the Historic Village, attended by all elected members, Mayor Stuart Crosby spoke of the way forward for the village. It is council's intention that the operation for the village be taken over by an entity, yet to be decided, formed from within the community. It is anticipated that this entity will take over from July 1 2011.
Talking to some of those present after the meeting it became clear that some didn't understand what is proposed. Put simply, it means council is no longer managing the village, being replaced by community representatives. Income will come from the same source as now with possibilities to increase income with the opportunities available. As has been said before, councils are not the best at running these sort of ventures. Just having the media privy to all financial implications is unhelpful. Public airing of commercial activity is rarely beneficial to anyone. Others asked why the museum can't go down there. It can – if the community wants it down there. There is an independent board, completely independent of council that is leading the museum project.
The same independence is what the village should have. Removing council influence will allow the community the opportunity for freedom in direction to decide its own future.
What they are worth
Other items coming up include elected members remuneration. Elected members DO NOT vote their own salary. There is an independent government body – the Remuneration Authority – that decides the pool amount to pay councillors. In Tauranga's case, this is $752,643. Council only decides how it is divvied up.
The mayor gets $126,500 with a deduction of $4560 for private use of the car provided. Councillors used to get a mileage allowance for their cars used on council business, but this has been chopped and now only applies after the first 30kms per trip.
The decision on the income divvy up will be made early December and then goes back to the Remuneration Authority for their approval.
Some comments noted that council is very quiet at the moment. That's partly true. We are awaiting first draft of next year's annual plan – pre-Christmas. It's also noted that the only media appearances at council come from The Weekend Sun and SunLive.co.nz plus one of the smaller radio stations.