At a time when many city, district and regional councils are feeling financial strain, the Waitaki District Council is in a solid position.
Local Government New Zealand (LGNZ) recently released a funding review discussion paper, to talk about options for addressing current and likely future funding shortfalls in local government.
LGNZ said the report, the first in a two-stage review, would detail findings from its major funding review, which began last year.
The paper considered alternative funding models to deal with increasing demand on services and infrastructure.
It examines options that could sit alongside a property rates-based funding system, such as local income tax, local expenditure tax, selective taxes, regional fuel taxes and transaction taxes.
LGNZ said councils spend about 10.5% of all public expenditure, but raised only 8.3% of all public revenue.
According to the Waitaki council’s most recent financial report, for the 12 months to December 31, 2014 council reported an overall surplus of $3.794 million.
The council’s total net assets as of December 31, which included areas such as property, roads, pipes and vegetation, totalled $740.570 million while total liabilities for the same period were $6.457 million.
While some councils are struggling to raise money to pay for infrastructure and services, Waitaki Mayor Gary Kircher said Waitaki was able to pay for projects without the fear of creating huge debts thanks to putting money back into the district.
“Many [councils] owe more overall, but we have money in the bank to invest in our community, like the North Otago Irrigation scheme and the retirement village, if that comes to pass. We’ve got some internal debt, but we have a good cash position because of the money we’ve put away to pay for infrastructure as it comes up.”
He said paying for infrastructure such as roading and services such as recycling was costly for the council and there were “ongoing discussions and issues” around the costs and how they affect ratepayers.
“We fund a number of different [recycling] initiatives, including the resource recovery park here and the Hampden and Palmerston groups. It’s relatively cost-effective, but it’s not as wide-reaching as it would be if there was kerbside collections … it’s the model we have chosen to use.”
Another issue many had was paying rates for services they may not necessarily use.
“There’s a lot of costs which fall on ratepayers which may seem to be better coming from elsewhere, like public toilets and more tourist-orientated areas where you’re not getting a lot of benefit, and there is a justification to be getting funding from government and elsewhere,” said Mr Kircher.
While having the ability to cut costs where necessary was a positive, monitoring cashflow carefully was key, as well as coming up with new ways to save money, such as local investment.
“Having the tools is good, but money needs to be spent as wisely as possible. We need to make sure that’s followed as much as we can.”
By Daniel Birchfield