Brownlee: Need for openness in council finances
City Care and Lyttelton Port Company shares are among the Christchurch City Council assets needing "serious reconsideration", Earthquake Recovery Minister Gerry Brownlee says.
Consultants are being hired to review the council's asset holdings as the organisation looks at how it can raise more money to pay its share of rebuild costs.
Brownlee told The Press yesterday that the council needed to be more transparent about its finances and said he was "concerned that nobody knows what its full insurance situation is".
Strategic asset sales were ruled out by the previous council, but the new chairman of the finance committee, Cr Raf Manji, said the council needed to explore all options for raising extra cash as it could not afford to borrow any more.
Brownlee said that when the Government and the council negotiated the cost-sharing arrangements for anchor projects last year, he was assured there was "no difficulty and that all could go ahead".
Asset sales were "politically charged" but Brownlee agreed the council needed to consider all options so it could hold up its end of the rebuild bargain.
Ratepayers should be questioning "what benefits they get" out of some of the council's assets.
He cited City Care as an example, saying the company ate up a "huge amount of capital" but generated low profits.
"I find it surprising that in the last couple of years, when the council has had so much on its plate, that they've continued to buy shares in the [Lyttelton Port Company]."
Manji said the perception the council was in "financial distress" was wrong. "We just want to get everything sorted out so we can make the decisions that need to be made."
He did not believe local asset sales would be as controversial as they were at a central government level.
"There's a big difference between local and central government because there are no limits to how much [the Government] can borrow. We have strict limits around that and also around what we charge ratepayers and how much we can cut expenditure."
An audit of the council's finan ces is being done as part of Mayor Lianne Dalziel's pre-election pledge to open the council's books.
Interim findings revealed some big issues, including how much the council was expecting to receive in insurance payouts and how much it had budgeted for infrastructure repairs.
Manji hoped the council would have all the information it needed about anchor project costs, asset holdings and insurance claims by the middle of the year.