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

Gordon Campbell:
On The Northland By-Election

Supposedly, Winston Peters’ victory in Northland has exposed the simmering dissatisfaction with the government that exists out in the provinces. Yet it remains to be seen whether this defeat will have much significance – and not simply because if and when Labour resumes business as usual in the Northland seat at the next election, Peters’ hold on it could simply evaporate.

On Saturday, National’s electorate vote declined by 7,000 votes, as the 9,000 majority it won last September turned into a 4,000 vote deficit – mainly because Labour supporters followed the nod and wink given by Labour leader Andrew Little, and voted tactically for Peters. In the process, Labour’s vote went down from nearly 9,000 votes six months ago, to only 1,315 on Saturday. More>>

 

PARLIAMENT TODAY:

Gordon Campbell: On A Funeral In Asia, The Northland By-Election, And News Priorities

Supposedly, New Zealand’s destiny lies in Asia, and that was one of Foreign Minister Murray McCully’s rationales for his bungled reforms at MFAT. OK. So, if that’s the case why didn’t Prime Minister John Key attend the state funeral on Sunday of Singapore’s founding leader Lee Kuan Yew? More>>

ALSO:

Werewolf Satire: Not Flag-Waving; Flag-Drowning

The panel choosing the flag options has no visual artists at all. Now, I’ve kerned the odd ligature in my time and I know my recto from my French curve so I thought I’d offer a few suggestions before they get past their depth. More>>

ALSO:

IPCA Reports: Significant Problems In Police Custody

In releasing two reports today, the Independent Police Conduct Authority has highlighted a number of significant problems with the way in which Police deal with people who are detained in Police cells. More>>

ALSO:

Inspector-General of Intelligence and Security: Inquiry Into GCSB Pacific Allegations

The complaints follow recent public allegations about GCSB activities. The complaints, and these public allegations, raise wider questions regarding the collection, retention and sharing of communications data. More>>

ALSO:

TPPA Investment Leak: "NZ Surrender To US" On Corporates Suing Governments

Professor Jane Kelsey: ‘As anticipated, the deal gives foreign investors from the TPPA countries special rights, and the power to sue the government in private offshore tribunals for massive damages if new laws, or even court decisions, significantly affected their bottom line’. More>>

ALSO:

Werewolf: The Myth Of Steven Joyce

Gordon Campbell: The myth of competence that’s been woven around Steven Joyce – the Key government’s “Minister of Everything” and “Mr Fixit” – has been disseminated from high-rises to hamlets, across the country... More>>

ALSO:

RMTU: No Public Submissions On International Government Procurement Deal

“The government is preparing to assent to the Government Procurement Agreement, a World Trade Organisation Treaty which opens up New Zealand Government contracts to foreign companies and closes the door on local businesses and their workers. However the Foreign Affairs, Defence and Trade Select Committee is refusing to take public submissions on the decision.” More>>

ALSO:

Gordon Campbell:
On Pacific Spying

So New Zealand spied on its friends and allies in the Pacific – and has not only been passing on the results to the NSA, but has apparently passed on the details of the Pacific’s relations with Taiwan to our other best friends, the Chinese. On the side, the Key government has also been using the security services to gauge the chances of Trade Minister Tim Groser landing the top job at the WTO... More>>

ALSO:

State Housing Transfer: Salvation Army Opts Out

The Salvation Army has decided against negotiating with Government for the transfer of Housing New Zealand stock.
More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
Regional
Search Scoop  
 
 
Powered by Vodafone
NZ independent news