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

 


Report shows councils in sound overall financial position

Media Release - Thursday 12 June 2014

Report shows that councils are in sound overall financial position

A newly-released independent report shows that councils in New Zealand are in a sound overall financial position - including Horowhenua District.

In May this year Local Government New Zealand (LGNZ) commissioned analysts Grant Thornton to review key financial factors for all district, city and regional councils.

The independent report, Local Government: A Financial Snapshot, shows that the vast majority are in good or very good financial health relating to their balance sheets, such as debt levels relative to their asset base, debt levels relative to their population, ability to repay debt and ability to cover interest (finance cost) obligations.

The four councils, which do not include Horowhenua, that narrowly fell below the rating line either have strategies in place in their Long Term Plans for addressing their financial challenges, or are there because of the nature of the methodology which does not take into account income from non-rating sources or financial equity.

Horowhenua District Council chief executive David Clapperton says that the report's findings come as no surprise and sets the record straight about the financial positions of councils.

He says that regarding Horowhenua, recent audits by Audit New Zealand have raised no issues or concerns about the Council's financial performance or debt levels, nor how it will fund services, activities and projects in its Long Term Plan.

Mr Clapperton says that Horowhenua District Council has its own debt covenants set under its borrowing management policy, and also Local Government Funding Agency covenants it must meet.

"Council is well within the limits on all these covenants. We also have a debenture trust deed that appoints a Trustee to oversee the Council's financial performance on behalf of the organisations that lend to Councils," he said.

"The Trustee’s recent benchmarking report on Local Government performance that was reported to Council’s Finance Committee in March 2014, does not highlight any major concerns over debt levels."

Mr Clapperton said that later this year, Council will begin the development of its Long Term Plan 2015-2025 and that debt levels, affordability and what the Council will do regarding these will be reviewed as part of this process.

"I am confident that Council does provide value for money to ratepayers, and will continue to do so in the future," he said.

LGNZ President Lawrence Yule said the report provides conclusive evidence that the overwhelming majority of councils are in good financial health and are using best-practice financial management.

“The local government ratio of debt to assets is at a prudent 9 per cent. This is the equivalent of a $36,000 mortgage on a $400,000 home,” he said.

"Debt per se is not bad. On the contrary it is an appropriate funding tool for intergenerational assets such as roading and water infrastructure."

Mr Yule said that the local government sector continues to have the lowest debt of any sector in New Zealand.

“Overall, New Zealand’s councils are in overwhelmingly sound financial health.”

ENDS


© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Gordon Campbell: On The Mt Albert Aftermath

Personality politics – Jacinda is great! Jacinda is not so great! – have dominated the coverage of the Labour Party’s fortunes this week...

Still, this is a relatively new and welcome problem for the centre-left. Labour has seemed so bereft of crossover talent for so long that it seems almost embarrassed by this latest development. More>>

 

State Sector: Government To Apply Pay Equity Principles

Legal changes are not yet in effect but the State Services Commission, on behalf of the government, and the Council of Trade Unions on behalf of unions, have agreed to apply the principles to current pay equity claims. More>>

ALSO:

Throwing Stoners: English Blames Failed Drug Tests For Unemployment

Bill English’s diversionary tactic of condemning of a generation of Kiwi workers as a bunch of drug-takers cannot hide his government’s failure to create opportunities for decent work, says Labour’s Employment spokesperson Grant Robertson. More>>

ALSO:

Conservation: Central Govt Takes Over 1080 Regulation

“This new approach standardises the rules for using such poisons rather than the current system of different rules in different regions. This change will reduce costs and delays for operators, ensure consistent conditions throughout the country, reduce mistakes from misunderstanding rule differences and allow best practice approaches to be used." More>>

ALSO:

Election Entertainments: ACT Has Prison Plan, Greens Have Water Bill

Green Party launches Member’s Bill to protect our freshwater The Green Party has today launched a member’s bill that will keep water from underground sources, called aquifers, safe from pollution and contamination. More>>

ALSO:

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. More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
Regional
Search Scoop  
 
 
Powered by Vodafone
NZ independent news