Superficial ratings play fast and loose with data

KEVIN LAVERY
Last updated 10:24 20/06/2014

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OPINION: Mark Twain once said "facts are stubborn things but statistics are pliable". Perhaps the famous wit and writer was wearied by the cynical manipulations of an American predecessor of the New Zealand Taxpayers Union - a small but noisy group who seem to play fast and loose with data they gather from councils and government organisations.

Whether it is due to an overwhelming desire to score points off local and central government, or due to naivete or incompetence, the Taxpayers Union has made a hash of its Ratepayers Report - an attempt to compare the performance of councils around the country.

Last week, The Dominion Post published (June 11). On the face of it, this was good news for people in the Hutt - but it was based on the group's mixed-up analysis of figures provided by councils.

Hopefully, I can provide enlghtenment. First - and on behalf of my hard-working staff - I take issue with the comments of Taxpayers Union spin doctor Jordan Williams that the Wellington City Council is overstaffed compared with other councils. He claimed there are 65 ratepayers for every member of Wellington's staff compared with 85 in Christchurch and 87 in Auckland. The arithmetic behind this claim is nonsense.

The Taxpayers Union talks of "ratepayers"- that is, people - when the actual figures are calculated on individual rated properties. So the problem for the Taxpayers Union is that the rated properties in Wellington could include an office block containing 500 people, as much as a family home or apartment containing one or two ratepayers. The reason Wellington, then, has a lower ratio of "ratepayers" to council staff is because we have a higher proportion of big commercial ratepayers and a smaller residential population than Auckland and Christchurch. So the analysis is both meaningless and misleading.

The Wellington council is not overstaffed. We do a lot more things "in house" than many other councils. As an example, we are bringing our parking wardens back inside the tent next month which will increase our head count.

Comparing the Wellington City Council and the Hutt City Council - or indeed any other council - is comparing apples with pears.

The Taxpayers Union analysis does not compare fundamental ratios that are used to understand organisations' financial positions.

To compare financial health, the whole balance sheet needs to be taken into account. With a debt- to-asset ratio of 5.2 per cent (the local-government average is just over 9 per cent) and debt-to- income ratio of about 100 per cent, this shows the Wellington council is in good financial shape.

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Our debt-to-income ratio is the lowest of all the metropolitan councils. Putting it into simple terms, if we wanted to wipe our existing $373 million in debt quickly, we could sell our income- generating assets - like our share of the airport company and our commercial property leases.

We would still have money- making assets left over.

That being said, the income we earn from the airport and our leasehold land is more than enough to service the interest on our debt. In other words, we are not stinging ratepayers when we borrow to pay for infrastructure upgrades and for the good things in life. The Wellington City Council is the highest credit-rated council in the country, at AA, as assessed by rating agency Standard and Poor's.

People should look at the services our council provides, not only to Wellingtonians but to people from other parts of the region and further afield. The city funds the zoo, the Regional Aquatic Centre and other pools, botanic gardens, libraries, Te Papa, the ASB Community Sports Centre, public art and sculpture, theatres and concert halls, events and much more.

On top of that - but much less noticeably - we continue to spend far bigger sums on keeping our pipes, drains, roads and other infrastructure in top shape.

Finally, readers should be wary of any analysis or extrapolation by the Taxpayers Union. As a council officer, I have to be agnostic on political issues but I question the ability of the Taxpayers Union to alert people in the region to the issues of possible amalgamation of local government, for example - or make any comment on local government matters if their number-crunching continues to be amateurish.

- Kevin Lavery is the Wellington City Council's chief executive.

- The Dominion Post

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