Carryover cuts shave $600 off rates bill, says candidate
Former Hamilton councillor Garry Mallett says he can cut almost $600 from average city rates bills without cutting into budgets, but critics say his numbers are flawed.
Mr Mallett is part of a five-candidate ticket seeking election to the city council, and has set his sights on the amount of work the city rates for each year - but doesn't do. He said "carryovers", or work planned to take place but deferred, represented over-rating by council, and managers not being held to account for their programmes.
Mr Mallett, a city businessman and former WEL Energy Trust chairman, said unaudited figures for 2012/13 showed council charged ratepayers for, but didn't provide, around $24m of projects or services - a practise he wants to eliminate.
He said that council carryovers in the past two complete financial years amounted to $63.9m, or $1181 per ratepayer, and said elected members were failing to hold chief executive Barry Harris to account for his performance in delivering the work.
Mr Mallett said that while there would always be exceptional reasons for delaying programmed work, he expected managers should be able to avoid carryovers.
But city chief financial officer Richard Briggs has disputed Mr Mallett's claims.
The Waikato Times earlier this month reported that city debt was $34m below budget in 2012/13 but that Mr Briggs expected those timing-related elements to bounce in this financial year, "leaving a true debt reduction of $6.7m," he said.
Mr Briggs, responding to Mr Mallett's comments, yesterday said that the council had been "extremely" upfront about the true level of debt reduction it had made.
While the council historically allowed operating costs to be carried over that was no longer the case.
All the deferred expenditure was fixed assets and loan funded.He said of the $23.6m deferred from the 2011/12 year, $18.2m was from Hamilton City coffers - the remainder was that portion of road projects funded by NZTA.
Mr Briggs said $6m was growth-related and outside council control, $3.5m was dependant on an outside funder, $7.3m was due to contractor phasing, and $6.6m was towards a multi-year project regularly reported to council. He said the interest savings from not borrowing for the deferred works was reported to elected members within the financial year and were factored into 2014 budgets.
"Mr Mallett's ratepayer saving number is completely erroneous ... these projects are all loan funded, or NZTA funded to a small degree, and interest savings were transparently reported and included in the 2014 Annual Plan as savings," he said.
Offsetting savings were unexpected costs such as the Bryce St slip, said Mr Briggs.
He said it was impossible to eliminate deferred capital expenditure as the budgeting round happened so far in advance of the projects - up to 18 months in advancente.
The drivers of the deferred expenditure were also external factors, said Mr Briggs.
Mayor Julie Hardaker said carryovers had historically been "common place" at the council "and in fact I observed that elected members simply ticked the box when it came to these and appeared to have little understanding about them," she said.
But including the city's operational budgets no longer happened, said Ms Hardaker. "Mr Mallett is incorrect in relation to the deferred capital expenditure for this year."
Councillor Ewan Wilson said that Mr Mallett's position was over-simplified, and the majority were significant infrastructure projects taking multiple years to complete.
Councillor Dave Macpherson said while Mr Mallett "has a good theoretical point", he did not believe it was possible for council to completely eliminate carryovers.
- © Fairfax NZ News
Do you support the introduction of water meters to Hamilton city?Related story: (See story)