DCC LTP must meet $68M budget shortfall over next decade

Updated post
Wed, 20 Mar 2015 at 6:41 p.m.

█ WOOPS, see JimmyJones at Comments and next post —it’s MUCH worse than $68 million….

AUDIT NEW ZEALAND HAS REASON TO BE VIGILANT
—WHAT NEW POOL COMPLEX FOR MOSGIEL TAIERI ??

Audit NZ on DCC (ODT 25.3.15)

ODT: Council accused of being in denial over long-term plan (25.3.15)

Related Post and Comments:
25.3.15 DCC Long Term Plan: Green-dyed chickens home to roost

█ For more, enter the terms *mosgiel*, *taieri*, *trust*, *pool*, *draft ltp* or *vandervis* in the search box at right.

Posted by Elizabeth Kerr

*Text image: whatifdunedin

16 Comments

Filed under Business, DCC, Democracy, Economics, Media, Name, New Zealand, OAG, People, Police, Politics, Project management, Property, SFO, What stadium

16 responses to “DCC LTP must meet $68M budget shortfall over next decade

  1. Peter

    A timely reminder, Elizabeth, from an item only just a few short weeks ago.
    Not sure how his Acquisitions chain stores are going financially, but Cr Richard Thomson, Chair of Finance,doesn’t seem to have a firm grip on the city’s finances. I bet, though,he doesn’t run those books into the red.
    It’s all about private versus public money… and how you can spend it. Some of those councillors will have left…one way or another….before the next council (or the one after that).Then the council has no option but to deal us up some ‘Tough Love’.

  2. Cars

    http://www.stlyrics.com/songs/g/georgegershwin8836/itaintnecessarilyso299755.html

    “It ain’t necessarily so”, Peter.

    Those responsible for the violent increase in debt at the DCC are the councillors epitomised by Kate Wilson recently when she stated that the council debt looked OK when compared with council assets.

    This mantra has also been trotted out by Lawrence Yule, another gogetter mayor who sees spending other people’s money as his right and duty.

    Council employees have a large role in this as the CEO and senior staff are the supposed managers of the money and it is those departments which trot out new and ever more expensive schemes to improve their particular patch, say a new car or an improved council chambers, or museum, or stadia that expand the cost of running the organisation, all on budget of course supported by a rate rise always a little over the rate of inflation ideally.

    So going back to the words of George Gershwin’s immortal song, do we blame the Whale and penalise him (quite a difficult thing now unless you are Japanese) or do you penalise Jonah (the ratepayer).

    Well I say it is time to look at ways to penalise the whale.

    I liked the Lee Vandervis shopping list of solutions, closing down or downsizing some of the DCC departments makes sense, but not those “services” that you and Aaron Hawkins talk about. Libraries are out, people use the library. Traffic lights are in, no city in the world of 120,000 people could have more traffic lights than Dunedin and if there is one (which someone will soon point out) then they are madder than us.

    With evidence that 125 cars proven stolen it is clear that the traffic, transportation department is overstaffed because those minions who were moving on the 152 cars, servicing them ordering them and their parts and replacements are hopefully not now required.

    Cycleways planners, once the cycleways have been planned, surely are not needed although complaints from citizens suggest that we may be – like the goons when gryttpipe-thynne brought up in parliament, “who is responsible for pulling up the drains in Hackney, and who is responsible for putting them back again”.

    The Hall traffic light problem perhaps exemplifies this element of DCC life better than any. If a department stuffs up a project it may well prolong their life as they are charged with the expense of fixing the problem. But surely we as citizens should not fund or be penalised for these stuffups? Should not the penalties apply to those departments who multiply our debt?

    It seems to me again that it is time the citizens of Dundin came to grips with penalising the whale. The DCC councillors and the DCC employees caused the debt, they should carry the can.

    There are two possible methods of achieving these aims.

    Reduce the numbers of staff by sufficient numbers to eliminate the debt in five years, reduce the salaries of councillors by that same percentage (they need to be punished equally, although Vandervis would definitely have a grievance, but if we elect him mayor, that will ideally solve the financial issue).

    These reductions could be done Peter, without in any way reducing services, but by reducing disservices, there are plenty of them.

    Our problem however, may be in another stanza of Gershwin.

    There may not be a Moses who can lead us out of penury, and if we have to wait for one to be found in the bullrushes, we are doomed.

    Better to appoint a commissioner.

  3. JimmyJones

    INDEPENDENT AUDITOR’S REPORT

    TO THE READERS OF DUNEDIN CITY COUNCIL’S CONSULTATION DOCUMENT FOR ITS PROPOSED 2015-25 LONG-TERM PLAN

    I am the Auditor-General’s appointed auditor for the Dunedin City Council (the Council). Section 93C of the Local Government Act (the Act) requires an audit report on the Council’s consultation document. I have carried out this audit using the staff and resources of Audit New Zealand. We completed this audit on 24 March 2015.

    Without modifying our opinion, we draw your attention to the fact that the Council needs to find significant savings and efficiencies in the period of the long term plan to meet its aim of keeping rate increases below 3%.

    On pages 4 and 5 of the consultation document, the Council sets out the financial challenges it faces in maintaining the range and quality of services it provides to the community. This includes that the Council’s forecast rates exceed its desired 3% limit on rates increases in seven out of the 10 years of the plan.

    On pages 16 and 17 of the consultation document the Council outlines the level of renewals needed over the next 30 years, including dealing with an assessed $60 million backlog in water and waste assets that have exceeded their useful lives and are not capable of delivering the designed service levels. The Council’s proposed renewal programme over the next 30 years totals $700 million (in current dollars). The infrastructure strategy assumes that efficiency savings of at least 13% or $88 million, including $27 million over the next 10 years, can be made to accommodate the $60 million backlog. The renewal delivery programme is being refined over the next three years as these efficiencies are being sought.

    The cumulative impact on rates affordability is that, having assumed that savings of $27 million over the next 10 years can be identified in the key area of asset renewals, a further $68 million of savings need to be made from 2016/17 to enable forecast rates to be reduced to come within the Council’s desired 3% limit. This is set out in the table on page 4 of the consultation document.

    The total level of savings assumed in this plan is therefore approximately $95 million over the 10 year period of the plan.

    Although the Council outlines on pages 5 and 17 of the consultation document the tactics that it anticipates will enable these savings to be made, the Council’s ability to realise these savings on a sustained basis is uncertain.

    Note that this DCC LTP passed the audit with the above warning comments. And remember that on the first attempt it FAILED to gain the auditor’s approval which delayed the LTP process. The important things from the auditor’s warning are:
    — this Council has failed to deal with a $60 million backlog of infrastructure renewals (in other words councillors have spent up large on bicycles and museums instead of replacing buggered water pipes)
    — these dim-witted fools have failed to balance the books – they plan to overspend the income by $95 million over 10 years. The auditor is overly polite when he says that “The total level of savings assumed in this plan is therefore approximately $95 million over the 10 year period of the plan.”
    — the auditor does not believe that the so-called savings are possible and so he should have failed this version of the LTP also. We must deduce that Dave Cull’s private version of the Long Term Plan includes very large rates increases over the 10 years. Dave and Cr Richard Thomson have effectively abandoned the 3% limit on rates increases and are lying to us by ignoring the $95 million overspend. Both Lee Vandervis and Jinty MacTavish have spoken out against this deception.

    The auditor’s report is on page 43 of the LTP Consultation Document. Don’t expect to read about this in the ODT.

    • JimmyJones

      I see that the ODT has reported the comments of Cr Hawkins and Jinty, but hasn’t reported the auditors warning and they didn’t report that the LTP failed its audit on the first attempt.
      Note that according to the auditor (Audit NZ) the budget blow-out is $95 million not $68 million.

      • Elizabeth

        The ODT did report failure of the DCC’s first attempt at the LTP.

        • JimmyJones

          I wouldn’t have thought so, Elizabeth. Perhaps they mentioned a delay, but the ODT would not refer to the audit as failed. The DCC report (24/3/15) refers to the audit failure like this:

          “This agenda item was previously scheduled for the Council meeting held on Monday 16 March 2015. The item was deferred on that date, due to the audit review process not being completed at the time of the meeting.”

        • Elizabeth

          You are right re “delay” mentioned, JimmyJones – behind scenes we knew it as FAIL. ODT/DCC Comms ever euphemistic.

          Thanks for tracking the $68M to the superior figure of $95M savings required for the decade now starting.
          More chickens home to roost.
          What say Mayor and Councillors ?

          When back at desktop will do graphic addition to the post at top of thread.

    • Elizabeth

      It was Cr Aaron Hawkins who publicly stated in a Council meeting that the DCC was in denial about its financial position in terms of the LTP. He was roundly applauded by Cr Vandervis – this was caught on 39News video and reported by ODT the next day. Cr MacTavish followed Cr Hawkins – with a somewhat less convincing speech. Kudos goes to Hawkins in the first event.

      • JimmyJones

        Yes, a few points to Greeny Hawkins, but Cr Vandervis was the only one who voted against adopting the LTP consultation document.

  4. Calvin Oaten

    Jimmy Jones, you are due sincere thanks from the citizens for the comprehensive rubbishing of the LTP as set out.
    That Dave Cull can be seriously talking about additional non budgeted items such as the Mosgiel Pool beggars belief. That Cr Vandervis’ comments plus those of Crs Hawkins and MacTavish go unheeded by the balance of council, whilst Cr Benson-Pope talks grandly about facing up and doing the South Dunedin Library project, all in the face of the Auditor’s report on pages 43 and 44 0f the LTP Consultation Document signals a dysfunctional council of monumental proportions.
    Note that page 45 ‘Notes’ has been left blank intentionally. This could well be for the council’s ‘Epitaph’, reading in similar terms to that of the late Sarah Jones, which went:
    “Beneath these stones lies Sarah Jones, but do not sit and wonder, for these are not the only stones that Sarah Jones lay under.”
    Kinda fits don’t you think?

  5. russandbev

    Calvin, not sure who this particular Jones was, or whether it was Sarah or Sally, but here is a genuine epitaph from the US.

    Underneath this pile of stones
    Lie’s all thats left of Sally Jones.
    Her name was Lord it was not Jones.
    But Jones was used to ryme with stones

    However, it continues to be amazing that the DCC seems to be about to continue its headlong rush into increasing debt.

  6. Hype O'Thermia

    russandbev, “it continues to be amazing that the DCC seems to be about to continue its headlong rush into increasing debt.”
    No it’s not. It’s what they know how to do. Pavlov’s poodles.
    Were you ever tobacco smokers? Know how hard it is to give up?
    Everything from the phone ringing to – you name it – is a cue to do the habitual thing, light up another cigarette / say “yes” to another gimme-gimme demand.

    • Peter

      Hype. Furthering your cigarettes analogy, what is the equivalent of nicotine patches or electronic cigarettes to wean them off the debt spending?
      A course of ECT…..colloquially called shock treatment? Question remains, who administers it?

  7. Willy away

    If Council have a self-imposed aim to keep rate rises to no more than 3%. Why did they include in the Feedback Form, under the heading ‘Rate Increases’ – Option 2. 4% unless exceptional circumstance ?

  8. Hype O'Thermia

    Willy away, it’s like whitewashed stones around the parade ground, keeps people busy.
    And there are and always will be always “exceptional circumstances”, you can bet a kidney on it.
    In other words, don’t worry your pretty little head about it. Feeling patronised? Don’t blame me, I’m only the interpreter.

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