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05 April 2006
Council struggles to balance 10-year budget
Last night the
Manukau City Council held an extraordinary meeting to consider
budget short falls in its draft Long Term Council Community Plan.
These budget short falls were recently highlighted during an Audit
conducted by Audit NZ during the last week.
Howick Councillor
Jami-Lee Ross was present at that meeting and says the city is
facing a major issue that requires Council to seriously review
much of the wasteful expenditure that is weighing the city down.
“What the opinion
from Audit NZ tells us is that Manukau City Council has been
living outside its means for a long time. We are now facing a
budget short fall in the long term Plan that will adversely affect
the city for the next ten years” Mr Ross says.
“A balanced
budget, in simple terms, means that Council’s operating
expenditure should not exceed a level that can not adequately be
covered by sustainable levels of revenue. The Audit NZ review has
discovered that Manukau City Council’s initial draft LTCCP shows
that Council expenditure is too high to fulfil the requirements of
a balanced budget.
“Our officials
have suggested that the best way for Council to tackle this issue
is to hike up rates up by almost 9 percent this year and 7 percent
next year to fund the shortfall. However, this is not an
acceptable level of rating.”
Mr Ross says that
Councillors need to make some long overdue decisions that will
place the city in a better financial position for the future.
“Council’s responsibility is to deliver a balanced budget, as well
as provide ratepayers certainty that their rates will be capped at
no more than the rate of inflation. That means that its time for
Manukau City Council to tighten its belt and lose all that excess
baggage.
“The first area
we need to look at is the completely unsustainable policy of free
entry to swimming pools. This policy puts the Council behind the
times with every other city in New Zealand and costs Manukau
ratepayers over $4.5 million annually. A nominal charge of $2 for
adults is not too much to ask when most other pools in Auckland
charge at least double that amount.
“Council also
needs to give consideration to the way in which it funds growth in
the city. The new draft LTCCP sees the growth centre budget jump
by over 90% for the years between 2006 and 2008. Last year funding
of this area was estimated at $7.3 million, but that has now
skyrocketed to over $14 million. Is this expenditure justified
given that most predictions show growth slowing down in the near
future?”
Mr Ross also
believes the impacts of past decisions are beginning to take their
toll on the city. “Several years ago Council gifted in excess of
$30 million to the Pacific Events Centre project. While that
centre is now complete, what most people won’t realise is that
ratepayers continue to finance that Trust by $385,000 annually.
Those funds are in addition to the $13.5 million that will be
given away in general grants over the next ten years.
“The over-taxed
Manukau City ratepayers also began carrying the burden of the new
Council propaganda machine from 1 March in a scheme that has
already gone over budget before the first paper has even been
produced.
“Likewise,
Council continues to fund a Treaty of Waitangi unit at $400,000
each year in an area that local authorities arguably should have
nothing to do with. Marae development and Pacific advisory
services are also putting strain on the budget, each costing
around $1 million during the period of the long term plan”
Mr Ross says
there are many Council programs in the LTCCP that are putting
pressure on scarce resources and contributing towards an
unsustainable funding situation. “As a city, Manukau is in a
serious situation where the Council needs to make some significant
changes. The time of high rate increases and an unbalanced budget
have to end. Councillors must take the audit advice on board and
reassess city priorities for the long term future.”
ENDS
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