If Tauranga City Council was a company it would be insolvent, says Mayor Tenby Powell.
Powell comments came ahead of the council agreeing to adopt the draft annual plan for consultation which would see a rates rise of 4.7 per cent.
Prior to COVID-19, Powell had spoken of the need to increase rates by 12.6 per cent to "stop kicking the debt can down the road" for future generations.
"We're insolvent. If we were a business we would be calling the receivers now."
The draft annual plan was revised following the COVID-19 lockdown to soften the proposed 12.6 per cent rates increase agreed to consult on in March.
Read more about the draft annual plan here.
The revised annually plan identified areas that could be cut back and settled on a $244 million capital programme at a 4.7 per cent rates rise.
Powell says the city has an opportunity to bounce back from COVID-19 if it can get funding for shovel-ready projects and take advantage of central government funding.
"Central Government has been clear if you don't pony up the money will walk. I'm not going to fight this instruction."
The plan passed unanimously on Tuesday.
22 comments
council
Posted on 17-06-2020 12:20 | By dumbkof2
why are we not surprised. the way the council has been wasting money.
Other measures?
Posted on 17-06-2020 12:46 | By morepork
So the easy targets of Government funding and squeezing the Ratepayers will be approved, now what other measures is Council going to take? I still haven't seen any suggestions of wage cuts at TCC...
Council Insolvent?
Posted on 17-06-2020 12:47 | By gincat
So the answer is to increase debt to up to 2.5 times its annual revenue, also Councillor's would have a decrease in salary, not further increased where all are now paid over $100k. Stop the spin
If Only
Posted on 17-06-2020 13:16 | By The Sage
If Only they would stop wasting money on disastrous projects like the transport hub that has failed. Mr Powell failed to mention that if Tauranga City Council employed business people rather than bureacrats it might not be insolvent. Drain the swamp.
Lies
Posted on 17-06-2020 13:42 | By Slim Shady
He clearly doesn’t understand some simple economics nor business practices. If TCC were a company they would reduce costs and stop unnecessary wastage for starters. But they’re not so they don’t. Insolvency is being unable to meet your debts. So TCC is far from insolvent. They have much lower debt to revenue levels than Christchurch CC , who are freezing Rates, not proposing an increase at more than twice level of inflation. This bloke reminds me very much of Trump. Say enough lies and some are bound to resonate. Don’t get your way and attack people. Walk around with a long face when criticised. He has to go.
Maybe he has a point...
Posted on 17-06-2020 13:44 | By Slim Shady
...if that is the case then surely the Council needs dissolving and a Commissioner brought in? Cheerio Tenby.
Management
Posted on 17-06-2020 15:08 | By Kancho
Think every ratepayer can point to projects that were either a waste if money, a low priority, or more complicated than needed. My favourite hate in all three categories would be Greerton village. Every time I go through the only impediment to flow is Greerton village. The queue backs up in both directions for hundreds of metres but once through the road clears. Stupid pedestrian crossing jams up the roundabout all the time as it's too close. The crossing where it used to be was fine. The layout was fine . Greerton is worse and it cost a lot of money whilst shops suffered for months. Ridiculous. So insolvent but silly wastage everywhere and poor prioritising of more important necessary work not done. A bickering council seems all we have from the last election. We will remember you
Escalation
Posted on 17-06-2020 16:09 | By Captain Hottie
If he thinks that a 12.6% rates increase is going to stop further generations from wearing the costs, he's dreaming. Council would just keep raising the rates increase, figuring that us schnooks accepted 12.6%, let's see how much more we can squeeze out of them. By the the time the future generations pay rates they will be doubling every year. And the more money council get, the more they squander on 'nice to haves'.
Scare Tactics
Posted on 17-06-2020 17:22 | By Taffy
Just what we would expect from this Mayor,as he has not got his way with the % increase.If the council is in so much trouble why does he not resign and call in a Commissionaire? Yea Right would not look good on his CV for his future political aspirations!
Insolvement?
Posted on 17-06-2020 19:33 | By Richard J H
If you claim to be insolvement then standard practise is that receivers come in and replace management with compotent staff.Seems that we have a problem with managers with no accountability? Frightening! R.Hall
Vote for the right people
Posted on 17-06-2020 19:59 | By MountBorn
All of TGA district voters in the past decades have had the chance to vote for some really good people but always fail to vote the correct ones so they move on and the area keeps going downhill
Insolvent
Posted on 17-06-2020 20:02 | By surfsup
If our Mayor has made that profound statement then questions have to be asked about the wharf street fiasco of $5million , the ngatai road fiasco which will achieve exactly what. All councilors who have served more than 1 term should also be asked what has been going on. A shambles would be an understatement.
Tom Ranger
Posted on 17-06-2020 20:49 | By Tom Ranger
Another raise their salaries should fix it. ?
Carcass
Posted on 17-06-2020 21:05 | By Carcass
The mayor does not understand the word productivity.One could get rid of 50% of staff at Tauranga city council with the stroke of a pen and the drop of a hat with out dropping service delivery. Then call in people who know how to increase productivity.There will be a further decrease of 50% reduction in staff
Council Insolvency
Posted on 17-06-2020 23:15 | By Noel Silver
Is anyone surprised by this comment. The only way out of this situation is to place the TCC under Administration, and then the Government could appoint a team of three competent business men to run the Council and make the necessary decisions in the Ratepayers best interests. They would remain in control until the Council is returned to solvency. Any other course of action just allows the continuation of incompetency. This approach should be pursued by the Ratepayers Association, as the main voice of the people, and this should include a petition and then a vote from all the ratepayers to display the true level of No Confidence in the current Mayor, Councillors, and Administration.
Millions on the IT Spend
Posted on 18-06-2020 14:08 | By Lvdw
So why if the council is insolvent are they spending MILLIONS on brand new very expensive IT systems with horrible future associated costs? Answer that one Mr Tenby. And no BS about the current system not fit for purpose.
@gincat
Posted on 18-06-2020 15:36 | By morepork
Good to see I am not the only one who thinks there should be wage cuts at TCC. This should have happened some weeks ago, as both a statement of solidarity with the rest of us suffering from the pandemic, and because people who are underperforming should not be overpaid, as a matter of principle. The actual savings may not be significant, but the message it sends definitely would be.
@Noel Silver
Posted on 18-06-2020 15:44 | By morepork
Your sensible and reasonable post made me think. It has got to a crisis state and what you suggest might be the last resort that we need. I'd still like to see the elected Mayor behaving like a leader and presenting his scheme to deal with the "insolvency". All I see are "easy" options (go to Government, and squeeze the Ratepayers) and no acceptance of responsibility for fiscal shortcomings or morale in Council. And of course, no sign of a wage cut...
Surprised?
Posted on 18-06-2020 16:29 | By peanuts9
Why are so many surprised by this news? Those residents of Tauranga, who could be bothered to vote, have for many years continually elected those who promised low rates increases, projects for the neighbourhood at the expense of the city in general and have never called the council to account. A voting average of 30-40%, except for last year, a village mentality, the idea that if you have lived here all your life, you are somehow exempt from price rises and a lack of understanding have all contributed to this current problem. people need to grow up, realise this is a dying city with financial problems.
Perhaps the writer 'Carcass' is correct....
Posted on 18-06-2020 19:20 | By groutby
...in saying maybe the mayor does not understand 'productivity' in the real world, after all, his salary from the military would have been paid for by the taxpayer, and now with the council, the ratepayer...without having to be at least partially accountable for actually earning this money, it turns up on 'request'...it just does!...YEEHAAAR!
Peanuts9
Posted on 19-06-2020 09:23 | By Slim Shady
Don’t be scared by someone talking rubbish for his own political purposes. It’s not a dying city, though Larry & Co have done their best to kill the CBD. It’s a growing, thriving city. Don’t be scared by debt. It’s how the world operates and funds assets. The servicing of debt is well within limits and much lower than many Councils, Governments or individuals. There are lots of wise grown up people who understand all this and don’t need to grow up. Maybe you do? I sense there are a lot of youngsters who have been frightened to death by debt and politicians using it to scare people. See through it. Relax.
Slim Shady response to Peanuts9
Posted on 19-06-2020 12:52 | By morepork
I endorse your comments 100%. Nevertheless, people do get worried by debt levels and it does need to be responsibly managed. Tauranga is not a dying city but the CBD will need a lot of work to recover. With the right Council and leadership, it can be done.
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