Collectively, the Hastings, Napier and Regional Councils project gross debt of $162 million for 2010/11.
Mayor Yule, whose Hastings Council accounts for slightly more than half of that ($85 million), says not to worry:
“The reason Hastings has more debt than Napier or the Regional Council is that they both have vast assets that deliver additional income whereas we have to rely on rates or borrow. Of course we know the debt has to be paid back, but I actually think the amount we owe in Hastings is fine and, spread across our rating base, it’s not a huge burden.”
Mayor Arnott, whose Napier Council accounts for $58 million, is also sanguine:
“Our position is incredibly manageable and councillors have been trained to be disciplined and careful. We have a very good asset maintenance plan, we don’t have ad hoc spending and we have planned for major expenses like sewerage treatment and upgrading the Art Gallery and Museum.”
And HBRC Chairman Dick, whose council will be carrying $19 million in gross debt in 2010/11, is mostly worried about Hastings and Napier attempting, through amalgamation, to raid the Regional Council’s comparatively rich treasury (i.e., an investment portfolio of nearly $300 million):
“It’s not that we won’t share wealth. We’ve recently allocated funds for the Art Gallery and Museum in Napier, the velodrome in Hastings and the Waipawa town hall refurbishment and Wairoa knows we will partner with them on a suitable project. But I would need to be absolutely assured that the Regional Council’s priorities and its economic and environmental focus would not be downgraded and subsumed by projects like swimming pools and sports parks.”
Each of these three leaders commented on their councils’ spending and debt to journalist Katherine Edmond, who reports in the August BayBuzz Digest.
Here is her full article, Council Debt … Should We Worry?, in which other community voices — like Councillor Wayne Bradshaw, Hastings mayoral contender Simon Nixon, and HB Chamber CEO (and Regional Council candidate) Murray Douglas — express greater alarm.
If you are worried about council debt, what might you be seeking from council candidates in this election year?
- Clarity about their own level of concern … does it match yours?
- Commitment to restraint in future borrowing … what limit, if any, would they endorse?
- Purposes for which they regard borrowing as appropriate, or not
- Better information about the cost of debt repayments in the future
- More transparency in council book keeping and budgeting
- Specific reductions in council spending they would endorse (and what savings they have achieved if they are sitting councillors)