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Time runs out for more cuts

TARYN UTIGER
Last updated 05:00 11/02/2014

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Councillors wanting to cut internal costs to halt borrowing have been told there's not enough time to squeeze more out of the budgets.

At yesterday's meeting most councillors lambasted the idea of borrowing money to keep New Plymouth's rate increases at the lowest amount possible.

New councillors Len Houwers, Gordon Brown and Murray Chong were among many labelling the idea as "crazy" and calling for the council to slash its own expenditure, so borrowing was not necessary.

Mr Houwers said rates should increase by only 2 per cent, and there should be no borrowing to achieve that.

He said savings should be made from the "big budgets".

However, council boss Barbara McKerrow said the idea was unrealistic as nearly $4 million in savings from council expenditure had already been made.

To find another $2.8m before March 4, when the draft annual plan had to be released, was a significant amount to come up with in a short time.

"We have been through this organisation with a fine tooth comb in recent times and to do it again is not going to be quick."

She said while some cost saving measures may be found in the coming weeks the councillors would still have to decide to either borrow money or increase rates.

"Ultimately it will be your call," she said.

Last week the New Plymouth District Council announced it intended to borrow money from its reserves to reduce a forecast rates increase from 6.6 per cent to 2.8 per cent.

The council's perpetual investment fund (PIF) was under-performing and the $16.1m that was forecast to be taken from it had to be reduced to $9.1m.

The $7m difference had been made up with around $4m in savings from council expenditure, corporate savings and a reduction in interest rates.

The remaining $2.8m either had to be footed by the ratepayers, or borrowed internally.

After heated debate the councillors voted to go back to the drawing board and explore various rates options before it meets again in March.

Mayor Andrew Judd said release payments from the PIF needed to reduce over time so the highly criticised fund could have long-term viability.

"But we need to balance that with the community's ability to pay rates and our borrowing levels," he said.

"There could be other options available to us as well, and we'll spend the time between now and March to investigate what is possible."

Councillor Shaun Biesiek said the borrowing proposal was put in place by the previous council and he was as unhappy with it then as he was now.

"We've got to face up to the community and say we can't do this anymore.

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"We shouldn't have been doing it anyway," he said.

- Taranaki Daily News

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