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The Big Financial Report - Released!

Posted by WorkBoot on 25 July 2011 | 7 Comments

The good news is - The PJ and Associates report on the Financial Health and Sustainability of Kaipara District Council has now been released in the public section of the Council’s business papers. You can read the report here

 

The other good news is – You don’t need to come to Dargaville

 

I’d really like to get your comments on this report. What may be argued is, with the Report having been released, that there is real interest from the community in what the report has to say.

 

So if you believe that the Report has important issues to debate please consider posting a comment on my blog or in the Financial Accountability forum so the press can understand that there is real interest from the community.  The debate on the issues will be enhanced if we can keep all of our comments as professional as possible.

 

On a plain reading of the report, the Mayor’s assurances were at least a little optimistic.

 

In his media release of 14 July the Mayor stated that the financial review –

 

“found no concerns with Council’s position apart from the debt on the Mangawhai Community Wastewater Scheme which will require management.”

 

However the report starts out by stating -

 

“The major financial issue facing Council is the amount of existing debt and the lack of cash reserves. The current financial position is largely caused by two significant contributors - the funding of the Mangawhai wastewater scheme and the costs of the District Plan review. In addition future expenditure for the improvement of infrastructure assets will require additional loan funding as Council has no cash reserves. Current Council debt, while not reaching Council's limit under its borrowing policy, is considered very high and poses future risks for Council.” (my emphasis)

 

 The financial issues for Kaipara are not simply the matter of a badly executed wastewater scheme. As this quote demonstrates there are many issues.

 

It does not, and has not, seemed to me wise to excuse all the above issues by referring only to the over-budget Mangawhai EcoCare scheme when clearly it is only one of the issues that Council must face up to and deal with.


Comments

  • Mayor Tiller headed his recent media release "Strong Governance gives Strong Financial Management" referring to the audit report that had just been released. At that stage, I imagine, he did not anticipate that the report would be publicly released and felt free to put a totally misleading spin on the contents of the report.

    Of course the report actually says nothing of the sort. Under its chummy facade it is highly critical of Council's financial competence. It paints a picture of an incompetently miscalculated debt with the ratio of interest payments to rates income way beyond the accepted norm. That is based on current conservative projections and I suspect that other considerations will raise the debt burden higher. No solution is offered except for the hint that ratepayers will have to foot the interest bill. As for the capital debt, there is no way that it will ever be repaid. It will be a financial mill-stone for decades to come. It is the legacy of Jack McKerchar, and Neil Tiller and his Councillors to the people of Kaipara.

    To read a summary of the audit report and Legal Eagle's comments on it go to:
    http://www.kaiparaconcerns.co.nz/

    Posted by Legal Eagle, 27/07/2011 3:24pm (2 years ago)

  • Any report of this kind that is addressed to "Neil and Jack" has as much credibility as Donald Trump. The report itself is largely a regurgitation of statute, to the point of plagiarism and my reading of it tells me nothing about what can be done to fix this shambles, or what accountability needs to be put in place to do so. If I understand things correctly, the auditor general either commissioned this report, or condoned it. New Zealand's auditor general, at least insofar as local government is concerned is about as effective as the Khandahar Police. Because the OAG is legally RESPONSIBLE for prudent financial management of local government, the OAG runs a million miles before it will bring criticism down on itself. We have one option, and one only, and that is to put a ticket of responsible people together and oust these ass-clowns at the next election. The first term of a competent council will be the worst three years of their lives, because when the stones get turned over the stuff under them will smell about as vile as a smell can get.

    Posted by bruce rogan, 27/07/2011 12:41pm (2 years ago)

  • Council in two years 2011/12 & 2015/16 did not comply with section 100 of the local Goverment act 2002.
    How long has our CEO been in office.

    Again we borrow to pay interest on interest all because of a over capacity waste water system.

    The cash flow statements not my words,Significantly Overstated.

    Other errors and omissions a variance of 11million more borrowing.

    2011-2012 annual plan notes a reduction in cash and a increase in debt we need to borrow another 16 million.

    District Plan debt increases are beyond what this Auditor belives to be acceptable limits, he was being kind

    You can dress this up all you want it comes down to Irresponsible Management.
    if this was a public company I would say misleading information like this from its management would end up in court, there are guys doing time for things like this.its called misleading the investors.

    If you knew about this report before the election.How would of you Voted?

    The longer this managment is in office the deeper in debt we will go this is only my honest opinion.

    Posted by Ken Dugdale, 26/07/2011 6:59pm (2 years ago)

  • A brief reading of the report belies the Mayor's statement that the Council is managing its debt. There is apparently little that can be done about the Mangawhai EcoCare debacle but surely it must be possible to stop the continuing saga of the Proposed District Plan. Even if it costs half a million in default penalties, surely that has to be better than pouring several millions more into something that Council was strongly advised not to do in the first place by the other Councils in the region. It must be reaching a point where even Whangarei will not want to take us over with the level of debt McKercher has incurred for us.

    Posted by Greyshark, 26/07/2011 9:31am (2 years ago)

  • Well done for all the hard work in getting this report to see the light of day. Watch for the different spins given by The DDN, The Focus and the Lifestyler.

    Posted by John Dory, 26/07/2011 7:54am (2 years ago)

  • The fact opening statement expresses concern over the amount of debt is a worry and the graphs indicate we are in serious debt in a few years is cause for further concern. The biggest worry is that the report starts "Dear Jack and Neil" the report writer should be showing some respect in their manner of address to our most prominent citizens.

    Posted by Ted, 26/07/2011 7:51am (2 years ago)

  • Thank goodness for some facts at last, and thankyou Jonathan for your persistence, Legal Eagle for your demand under the Official Information Act and Bill Guest for your initial expose. Obviously those that got us into this mess are the last ones likely to recover the situation. The CEO has 18 years input, the Mayor still thinks it is satisfactory excepting only for Eco-care, so Councillors must sack the CEO and the Mayor and Councillors must now actively support Jonathan as he has the ability and courage to lead the major change of CEO and attitude of Mayor required at the top. If we mis-manage this risky situation anymore further rate rises, and lack of growth in Kaipara seriously threaten us all.

    Posted by Fox, 26/07/2011 6:12am (2 years ago)

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