Council is starting to get it’s teeth into setting policy with a review of the Tasman Regional Management Plan (TRMP) and preparing to set the direction for spending in the next 10 year plan. I thought it would be a good time to update on how we are performing as a new Council under the direction of our new Mayor.
So far Positive Change (the banner that the Mayor campaigned under) looks a lot like more of the same, which I guess is not much of a surprise to many of us.
Yes, there have been some changes around how staff report to us by having the different departments report together around topics rather than individually reporting how their silo is operating. What does this look like in practice? We appear to have more highly paid staff sitting through all the meetings.
In terms of actual change within the direction of Council I am not seeing it. This Council has been spending money like it is water in a post dam world. There appears to be no grasp of how dire the financial situation of this Council is – especially now the dam overruns are increasingly being revealed. Our 83 million dollar dam that was 95% certain to built for that or less has now blown out to $139m. With only half of the dig out done, and the majority of the dig out still to do on the problematic side, the likelihood that we have seen the last significant blowout is remote.
It is comforting to note that the tragedy duo of Smith and Jones are now asking the hard questions which is a far cry from the bullying and threats that Councillors experienced when questioning the information (or lack of) that was being presented pre dam signoff from the same pair.
It is also interesting to read Murray King say how irrigators are pushed to breaking point and already contributing “their share.” Quite apart from the nonsense of affordability that was highlighted when the shares bought up by a handful of irrigators are being resold at well above the price we were told would be unaffordable, there is also the comment about the “public good content” of the dam. Conveniently, he omits to point out that the irrigators are paying nothing for using the river as a conduit to run their water from their dam to their irrigation pumps.
However, that said, the issue is now the costs that the TDC ratepayer has been lumbered with. Any cost is a problem because the previous Council ran the debt right up to the $200m cap (and squirreled more debt away off the books). A situation that is further exacerbated when you understand that the income from the Commercial arm of Council was supposed to be paying back the loan from Crown Irrigation from the first cost blowout. This money was supposed to be set aside to payback $5m sums in five yearly tranches.
The reality is that this money is being internally arbitraged. As explained, this means that instead of putting the money in a term deposit account where we receive next to no interest it makes sense to “loan” the money internally and reduce the amount we are paying in external interest. This would be a sensible action to take if we then effectively reduced our debt cap each year by the corresponding amount to allow for the debt head room to pay back the loan as payments fall due.
We are not making the reductions in total debt. So when Mr Drummond (Council Corporate Services Manager) was asked how we make the payment if we haven’t got the money set aside his response was that he would have come back to council to ask for more money. The net effect is that we have a $5m slush fund (to coin a term from another mayoral candidate) that pushes our debt cap out to $205m. A small increase in the greater scheme of things given the dam blowouts etc, but a dishonest representation of what was consulted on all the same.
It is clear from the way Councillors are voting and from the early engagement document being sent out for the Long Term Plan that the majority of Councillors and staff feel that our debt and rates caps are hindering our grandiose visions and we have no intention of sticking to them going forward. If as a result of the LTP engagement process we decide that the debt cap needs lifting from $200m (a self-imposed cap) and we proceed to raise it to $300m (closer to the Government imposed cap) I can assure you that this Council will spend up to the new debt cap before it is done according to the trend already set.
There certainly has not been any sign of Council “making the tough decisions” that Mayor promised on his campaign trail when he affirmed that he believed the Council could operate within our fiscal caps. I said during my campaign that as much as I would like to see us doing so I could not see how it would be possible with impending dam blowouts etc, but obviously I didn’t have the 22 years experience of my opposition who believed it could be done.
If rate affordability is something that you have any concerns about then I would suggest that you will want to be very vocal during coming consultations and in communication with your elected representitives as double-digit rate increases and another $100m of debt are definitely not out of the realms of probability from the “positive change” that I have seen demonstrated to date (unfortunately, most of these decisions have been conducted in committee so far so I cannot detail them).