A time for councils to demonstrate sensible, firm governance

The sudden turmoil in the world's financial system, with repercussions predicted to echo through the next decade, are conspiring as a potential recipe for disaster for long-term local government planning, writes The Press in an editorial.

Amidst economic chaos, regional and territorial councils have begun looking at their 10-year Long-Term Council Community Plans (LTCCP) and are embarking on a nightmare voyage that will involve cutting and re-prioritising activities and services in an attempt to keep rate rises to manageable levels and ease the burden for ratepayers.

Thursday's Environment Canterbury (ECan) meeting tackled head-on the imbroglio in a necessary attempt to wrestle a predicted general rate hike for next year of 17.5 per cent down to more palatable levels. After almost 12 hours poring over spreadsheets, discussing pros and cons, and trying to spread the spending load across subsequent years, regional councillors finally pushed back their chairs having reduced the general rate rise to about 14%.

Cr Jane Demeter put a voice to the butterflies that were probably fluttering in the stomachs of other councillors at the start of the meeting when she made a plea for the "Gods of good governance" to be on their side.

If ever there were a time for sensible, firm governance, it is now. When families are sitting round kitchen tables working out how to tighten their belts, businesses are struggling to stay alive and investors are taking a thrashing in the markets, councils need to be focusing on the provision of core services and deferring or cutting what they might want to do. Canterbury regional councillors have quite rightly drawn that line in the sand this week, classifying services as essential, important and desirable, and have already slashed about $4.5 million off next year's wish-list budget of $117.754m.

The Christchurch City Council is also pledging to act responsibly and to keep its general rates rises down to 5%. Mayor Bob Parker campaigned on that figure and on fiscal prudence, although the council has taken its wallet out on a few occasions, including buying five central city properties for $17m from developer Dave Henderson and spending $2m or so to bring the Ellerslie International Flower Show south.

The wisdom of attempting to plan rate levels and spending a decade ahead has been thrown into sharp focus by a looming global recession, with Finance Minister Michael Cullen warning that New Zealand can expect to return deficits for much of that period. As we have seen in the past few weeks, anything can happen in a day, let alone over 10 years.

ECan is well aware it has to cut its cloth to fit. Most of its annual takings of about $108m is from rates, grants and user-pays activities, and it does not enjoy the income stream from a range of council-owned companies that City Hall does. ECan is also right to be concerned that high-level government policy is being farmed out to local authorities, which are then left to work out how to implement it and pay for that.

Painful as it may be for regional council staff dedicated to their areas of expertise, cuts are being made that will impact on them and their programmes. Ratepayers also have to understand that services will be reduced in areas yet to be determined.

ECan can certainly sustain some judicious pruning. Cutting existing jobs to reduce the general rate would have been a crude and brutal response to the problem, but dampening down the staffing explosion of the past few years is one way of saving money.

In the past three years, ECan's staffing establishment has risen more than 120 to nearly 500 employees and, until Thursday, another 20-plus jobs had been on the cards for next year. It is not yet clear how many of these have been deferred.

In worrying times it is good to know councillors are putting ratepayers and constituents first. Councillors know their necks are on the line. They have made a good start in showing they have the nous to govern responsibly amid the gathering financial gloom.

- © Fairfax NZ News

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Lou Harrison-Smith   #1   05:26 pm Jan 28 2009

Some years ago city councilors (nationwide) were persuaded it would be better for the CEO's to control the budget, directly employ the staff etc. This would relieve the councilors of a serious responsibility without a reduction in pay. Of course they jumped at it and now are rubber stamps for the CEO. With the bureaucracy being paid for "responsibility" rather than "performance" empire building is endemic. The IT spend is a glaring example and it won't change until the councilors take back control of the budget. Having sold their souls for tasty directorships in businesses in which they have no knowledge, skills or expertise will anything changer anytime soon? Opps, what was that pink thing that just flew past the window.

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