Letter: Stop stashing the cash

Last updated 12:05 25/02/2014

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OPINION: A proposed city council rate increase of 0.43 per cent is a pleasing improvement on the 2.65 per cent scheduled in the 10-year plan. Something Cr Arnold calls a good start, hopefully toward an eventual rate reduction. Not an impossibility.

The discovery of $1.48 million of savings (over-budgeting), this year coming on the heels of a $1.5m reduction of the 2013-14 estimates begs the question of what similar amounts were passed over in previous years.

Cr Boniface's criticism of stashing money away in reserves just in case it's needed is welcomed.

Total reserves (2013-14) stood at $20.2m. That's money taken out of the community by rating in advance of need.

It is also a convenient way of funding items not included in the annual plan, by playing the ''it won't come out rates, it's coming from reserves'' card.

True some of these funds are earmarked for replacing ageing capital works/infrastructure but it is much fairer to fund these from borrowings.

This ensures that future ratepayers pay their fair share of the costs through loan repayments.

It makes good sense when interest rates are reasonably low and our current ratio of debt to equity is only around 8 per cent.

Parliament's Earthquake Bill puts this bogey into perspective.

Most residential properties are exempt its provisions, seismic assessments of existing buildings have a five-year time frame for completion, remedial work has 10 years plus a 10-year extension right, little urgency for big spending there.

Not forgetting we have insurance cover against earthquake damage.

ALAN SWALLOW
Invercargill

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- The Southland Times

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