Local Govt | National News Video | Parliament Headlines | Politics Headlines | Search

 


City in good financial position to meet budget shortfall


Wednesday 7 May 2014

City in good financial position to meet budget shortfall identified in KordaMentha Report

Press Release KordaMentha Report

Christchurch Mayor Lianne Dalziel says the city’s strong balance sheet means we are in a good position to deal with a potential $534 million budget shortfall identified by an independent review of the Council’s financial position.

In December last year the incoming Council commissioned independent financial advisory firm KordaMentha to undertake an assessment of the financial estimates and assumptions underpinning the city’s Three Year Plan adopted in June 2013.

Mayor Dalziel says KordaMentha’s figures have been well signalled in the media and the headline figure is not a surprise to the Council or the Crown.

KordaMentha is also warning the shortfall could be significantly higher depending on the level of the Council’s final insurance settlement and its share of the major facilities rebuild costs.

The Mayor says the full report will provide citizens with a plain language explanation of where the city stands financially three years after the earthquakes.

“As a new Council we promised to open the books so we could be transparent and accountable.

“This report is an important step in fulfilling that promise. Only when we all fully understand the Council’s financial situation could we start working together on putting our finances right.”

The Mayor says given the extraordinary number of variables the previous council faced at the time the plan was adopted ¬ – including the lack of certainty about the actual costs of mending the city’s infrastructure and the council’s insurance pay-out – it is not surprising there is potential for a significant budget shortfall.

“What we now know is that the Three Year Plan was based on an overly optimistic view of the future and did not provide enough headroom to allow for cost escalation or indeed for the sort of unexpected expenditure the city now faces as it ramps up land drainage recovery projects.”
“Sensibly, the Cost Share Agreement with the Crown makes explicit provision for a review of costs, and how they are shared. Clearly this requires close collaboration with Treasury and the Crown. We met in Wellington on April 22, days after the final report was given to us, to discuss next steps and to provide them with an advance copy of the report.”

The Mayor says from the outset the previous Council had always believed the infrastructure repair estimates had been understated in the cost share agreement and so it was not surprising that this remained a point of contention with the Crown.

“ Irrespective of where the figures finally land, as Mayor I can assure Christchurch residents that this Council is going to ensure that this debt problem is dealt with responsibly.”

Finance Chair Councillor Raf Manji says KordaMentha provides a useful snap-shot of the council’s current position but there are still a lot of variables and the key message to take out of the report is that the Council will need to take decisive action to put itself on a sound financial footing for the future.

“We have a strong balance sheet to help us weather this kind of financial challenge. KordaMentha makes it clear that there is no single simple solution but rather a number of levers that will need to be used.

“ Hard choices will need to be made and we will be relying on the residents of the city to engage with the Council as it makes these decisions and charts a prudent and sustainable course forward.”

Councillor Manji said the Council is working closely with its Executive Leadership Team, including its new Chief Financial Officer Peter Gudsell, the Canterbury Development Corporation, Christchurch City Holdings Limited (the Council’s investment arm) Christchurch City Council, and external advisors Cameron Partners to develop a robust financial strategy for the next 30 years.

The Councillors and Executive Leadership team will take the next step in this process at a two-day strategy workshop this weekend following a month of briefings on the financial situation and the infrastructure repair programme.

To read the report visit: www.ccc.govt.nz/financialreview


© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

2040 Target And Lower Standards: “Swimmable” Rivers Five Times More Likely To Make You Sick

Forest & Bird has condemned the government’s new water quality standards, warning New Zealanders that they lock in current levels of water pollution and allow for a 5-fold increase in the chance of getting sick from swimming in a river.

“Despite an explicit assurance from Minister Smith that the new water standards would provide for human and ecosystem health, he has failed to deliver on either of these things,” says Forest & Bird CEO Kevin Hague. More>>

ALSO:

 
 

Immigration: Clampdown On Rogue Employers Good First Step

The Human Trafficking Research Coalition is pleased at the new clampdown on rouge employers who exploit migrants announced by Minister Woodhouse this morning, and believes this is a step in the right direction. More>>

ALSO:

Mayor: 750 New Social And Affordable Homes For Wellington (Over A Decade)

The next stage of Wellington’s Housing Upgrade Programme will see at least 750 new units of social and affordable housing built over the next decade, Mayor Justin Lester has announced. More>>

ALSO:

22/2: Christchurch Quake Memorial Unveiled

A city, a region, a nation and an international community impacted by the Canterbury Earthquakes will come together to mark the sixth anniversary of the deadly quake and dedicate Oi Manawa Canterbury Earthquake National Memorial. More>>

ALSO:


November Quakes:

Gordon Campbell: On The Mana-Maori Party Deal

If the self-interest involved wasn’t so blatant, the electorate deal between the Maori Party and Hone Harawira would be kind of poignant. It’s a bit like seeing the remaining members of Guns’n’Roses or the Eagles back on the road touring the nostalgia circuit… playing all the old hits of Maori unity and kaupapa Maori politics. More>>

ALSO:

Private Provision: First Social Bond To Focus On Mental Health

New Zealand’s first social bond will help around 1700 people with mental illness into work, Finance Minister Steven Joyce and Social Investment Minister Amy Adams say. More>>

ALSO:

Immigration: Short Reprieve For Nine Indian Students

A temporary hold on deportations of nine Indian students is a step in the right direction but the Government urgently needs to implement safeguards to stop further injustices to more international students, the Green Party says. More>>

EARLIER:


Megaupload Case: High Court Rules Dotcom, Co-Accused Eligible For Extradion

Internet entrepreneur Kim Dotcom and his three co-accused are eligible for extradition to the United States, New Zealand's High Court ruled... Justice Murray Gilbert upheld a decision by the District Court that there were grounds for Dotcom, Mathias Ortmann, Bram van der Kolk and Finn Batato to be extradited. More>>

ALSO:

PREVIOUSLY:

Port Hills Fire: Midday Update, Monday 20 February

• 9 homes destroyed
• 2 homes with partial damage. Damage includes things like cracked windows, heat damage.
• 3 properties with damage to other external structures e.g sheds or outbuildings More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
Regional
Search Scoop  
 
 
Powered by Vodafone
NZ independent news