It looks like Chief Executive Garry Poole is taking a leaf out of George Osborne’s (British Chancellor of the Exchequer) book rather than compatriot Bill English and is seeking 10% cuts at the council to fund a growing debt balance, projected to be $360 million next year. Up to 150 jobs could be lost from a total workforce of 1500. This development will create a bitter-sweet taste at the council as new Green Mayor Celia Wade-Brown is sworn in today.
“Wellington City Council managers are being asked to trim spending, with 10 per cent cuts suggested for some departments.
It means job losses and service cuts are being considered as the council looks to control ballooning debt, forecast to hit $360 million next year.
Rates rises appear likely to help cover the looming cash crisis, assets could be sold, and millions could be added to the council’s debt, which in 2000 stood at $214m. Earthquake strengthening work is also a looming cost.”
Despite this year’s quantifying by central government of the total cost of leaky homes at around $11 billiob and subsequent offer to councils to part fund repairs, Wellington City Council did not include the full known cost in their annual report released on 5 October, days before the election.
“But the council is also facing a huge bill to fix the city’s leaky homes, with chief executive Garry Poole admitting last week that its liability has increased to an estimated $100m. Just $18m is included in council budgets to fix the problem.”
Why did Chief Financial Officer Peter Garty not include this extra $82 million liability in the accounts. And why did WCC announce this story on the day the new mayor is to be sworn in? Are there still sour grapes held by senior managers over the loss of ex-Mayor Kerry Prendergast?
The cuts and debt crisis announcement comes less than two months after Mr Poole and Mr Garty praised the good health of the city’s accounts following Standard and Poor’s giving it a AA+ rating. The consolation is that if voters had known the true state of the council’s books before the election, the result is unlikely to have changed.