Tauranga Mayor critical of reporter

Mayor Stuart Crosby today stepped into a row erupting over reporting of council finances.

The city council is slamming the Bay of Plenty Times report claiming a $7 million ‘blow out' in the Finance and Risk Committee report for the 10 months ended March 31.


Tauranga Mayor Stuart Crosby. File photo.

The report focusses on the ‘council approved overspends' and ‘chief executive approved overspends' on page 10 of the budget which amount to $7m.

Key financial indicators in the same report, show the council finances to be tracking favourably. Net debt is $310 million, 44.9 million less than the $355 million budgeted for the full year.

The debt to revenue ratio is 168 per cent, nearly 30 per cent less than the 197 per cent budgeted for the full year. The council operating expenditure at $152.4 million is half a million dollars over budget, but within the $179.1 budget for the full year.

'It was totally out of context of the actual report and mislead the community about the council finances,” says Stuart.

'The worst element of that was the headline which I know John (Bay of Plenty Times reporter John Cousins) did not write, and this is the issue where headline writers do not read the council report and only go on the reporter's interpretation of it.

'A lot of John's story was correct, it was the context it was written created a story that was not relevant to the truth.

'The bottom line is council finances are in very good shape and we often change budgets during the year for the right reason. It's not a blow-out. The financial changes were conscious, deliberate and for the right reason.”

The major expense the $4.1 million Elizabeth Street car parking building extension was brought forward deliberately, and was reported at the time.

Comments in the report are, the project was brought forward to supply additional parking to the CBD as approved by Council. The project cost is offset by $2.7m of deferred expenditure for the Northern CBD Carpark. Currently it is projected construction will be completed in July 2016, with $1m of the $2.4m approved budget brought forward to be rebudgeted into 2017.

The largest unbudgeted spend approved by chief executive Garry Poole was $492,602 for water filtration membrane modules for the Oropi water treatment plant.

The comment in the report is the existing membranes were failing and if they had not been replaced the city would have run out of treated drinking water in the middle of summer.

'The micro-filtration stuff, we do that as needed not when the budget says it's needed,” says Stuart.

'Some of those filters have lasted well beyond their lifetime, which is fantastic. And that's the way we run our assets. We upgrade them or replace them when they are needed, not when a budget line says so.

'It takes a lot for me to react to a journalist's interpretation of council business. I'm pretty free on that, but that was over the line. That was way over the line.”

A press release put out by Garry in response to the story says the $7 million needs to be seen in the context of the total $117 million capital programme budget for the year.

'Most of the budget variance was a timing adjustment for expenditure that was already planned. One item brings forward the Elizabeth Street parking building upgrade. Another brings spending forward one year for the Oropi treatment plant so that we can continue to provide the city with a high quality water supply.”

The Monthly Financial Report presented to the Finance and Risk Committee this week, outlined a number of capital project overspends to the budget. All of these were either approved by Council or approved by the chief executive under delegation.

There were three types of budget variance: planned expenditure being brought forward; expenditure as a response to the pressures of city growth; and expenditure as a response to health and safety issues.

'All of these are reasonable and responsible fiscal decisions for a council that is managing a growing city,” says Garry. 'No budget is ever static. We are adjusting to conditions and staying within the overall budget.” He points out the Council's debt for the year will be lower than budgeted.

The largest overspends were already budgeted for in the Long Term Plan. They have been brought forward from future years as a result of changing circumstances.

  • Planned timing for a new parking building was affected by the Civic Heart project, so the new level for the Elizabeth Street parking building was brought forward to provide more parking capacity in the short term. This $4.1 million accounts for 58 per cent of the overspend.
  • Oropi Water Treatment Plant: renewal of the filtration membranes has been brought forward from 2016/17 year. The membranes are budgeted to be replaced throughout the Long Term Plan as the need arises.
  • Growth in the building sector has required additional building staff and their associated resources.
  • There have been several growth-related stormwater projects, equivalent to 19 per cent of the $7M.

Response to Health and Safety building issues

  • Seismic strengthening work was required for the High Performance Sport Centre.
  • Additional expenditure required to demolish an asbestos-affected building.

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12 comments

Good Shape !!

Posted on 26-05-2016 12:49 | By Mackka

Net debt $310 million! Yet Mayor Crosby states "The bottom line is council finances are in very good shape" Heaven help us - the council won't!


Tough Mayor Crosby

Posted on 26-05-2016 12:57 | By Taffy

Welcome to the real world you are doing the best thing come Oct buggaring off Good Job.


John Cousin is

Posted on 26-05-2016 13:03 | By Watchdog

a careful and factual reporter from my experience with him over many many years.Sure the headline may have been misleading but that is hardly his fault. He holds up high in my estimations of good reporting.


not relevant to the truth?

Posted on 26-05-2016 14:48 | By Crash test dummies

That is a bit steep coming from the Mayor, the whole game at TCC is to mask, hide and then portray all as something else than it really is. When all of that goes to custard then they slip through a meeting in secret to rubber stamp it after all eh money has been spent. Like there is any option then left for anyone?


Net Debt

Posted on 26-05-2016 14:49 | By Crash test dummies

What a load of cobblers. The interesting numbers are the "Actual" debt, everything else is mushroom food at best and a typical level of reporting from TCC.


$310 million debt

Posted on 26-05-2016 15:09 | By Captain Sensible

So he is critical of a reporter; many of us are more than critical of the Mayor and bunch of spenders who masquerade as the TCC and spend our money unwisely whilst getting us into massive debt.


Mayor Crosby

Posted on 26-05-2016 16:42 | By Kenworthlogger

Oh boo hoo mister Mayor....


That's why I read Sunlive

Posted on 26-05-2016 18:33 | By Councillorwatch

I gave up on that other paper years ago. it's only fair that reporting and headlines should be completely accurate.


Low debt?

Posted on 26-05-2016 22:48 | By Crash test dummies

I don't think so, the spend ups for some reason have all been held back this year, oh that is right it is election year, the Muppets have to make all look lovely for the punters, gliding on ... no worries, spend it and catch up next year and some, debt by this time next year is expected to be some $480m odd. Is this prudent, is that good, where is the good part for ratepayers?


Hmmmm

Posted on 27-05-2016 00:01 | By How about this view!

I wonder what sort of debt the Mayor runs at home with his own money?? I understand that everyone needs to borrow money from elsewhere from time to time, but the trick is to pay it off before maxing out the credit card again to buy the next "Nice to have". AUSTERITY..... Look up the meaning Mr Mayor and use it occasionally in Council meetings.


What is that old saying

Posted on 27-05-2016 10:18 | By Merlin

The truth Hurts.


Only a Bureaucrat

Posted on 27-05-2016 10:44 | By The Sage

Only a Bureaucrat would do this. If it was his own private company he would have no show of balancing the books


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