Big cuts coming at Wellington City Council

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.

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6 responses to “Big cuts coming at Wellington City Council

  1. ….. and the truth shall set you free?

    Fascinating is it not how we can have a election where not one word is raised about rates, debt, leaky homes etc. only to be confronted with 10% cuts at Council, loss of jobs and services, and rates increases to fund leaky home liability, less than 3 weeks after the election.

    Still it looks like Council are now starting to finally understand that yes we indeed have a debt problem – under Prendergast of course we never had that problem did we?

    All we did under that regime was spend,spend, spend.

    I understand that the debt problem is currently on average $4,400.00 for every rateable property in Wellington, and rising.

    Isn’t it ironic that Poole gets a $20,000 pay rise whilst asking all departments to cut their expenditure and don’t you love the flowery language “suggested”? Does that mean it is just a suggestion to these managers?

    Truly we have a shower of idiots running this Council from Poole down, where Poole is paid an extra $20,000 for his “responsible financial management” whilst looking down the barrel of a “looming cash crisis, where assets could be sold, and millions could be added to the council’s debt”.

    How in gods name did the debt increase from 260 million to 360 million in a a little over ten years? – easy – with Poole at the helm with his able lieutenant Prendergast at his side clearly anything is possible.

    Council knew the projected cost of the leaky home problem prior to October 5 and buried it (i.e. did not publish it in the accounts) – why I hear you ask? Simple it is not the kind of information that you want floating around during an election campaign – especially when you are trying to get your mate appointed to another three years as Mayor, and for those of you who have forgotten that was Prendergast.

  2. Why did WCC announce this story on the day the new mayor is to be sworn in? It didn’t. The story is not the Council’s doing – it’s the result of a Dom Post reporter asking questions. As for the timing, they were chasing this story early last week, so you would have to ask the paper why it chose to sit on it for so long – Communications Advisor, Office of the Mayor.

  3. V – The leaky homes liability should have been included as a contingent liability if it was known prior to the end of the last financial year. you could always complain to the Auditor-General if you think there’s been a misrepresentation of the finances.

    • The item wasn’t probably listed as a contingent liability as it’s most likely covered by RiskPool and therefore not a liability to the WCC, but more their underwriter. Leaky home is being used to justify the need to cut expenditure that has been unchecked by previous councils and mayor, and now there could be higher accountability the CEO is making adjustments before the questions are asked about why expenditure is so out of control.

  4. Pingback: City’s Chief Bean Counter Quits | WCC Watch·

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