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Palmerston North City Council's performance raises questions

Palmerston North City Council's financial performance raises questions for ratepayers

22 AUGUST 2017 - High debt, high rates, and very high remuneration of officials at Palmerston North City Council are among the findings of the 2017 Ratepayers’ Report, online local government league tables published by the Taxpayers' Union today, at www.ratepayersreport.nz.

Jordan Williams, Executive Director of the Taxpayers’ Union, says, "Eighteen percent of Palmerston North City Council employees receive annual income in excess of $100,000, compared to an average of less than ten percent for comparable councils.”

“The staff costs at Palmerston North City Council are $1,341 per year per ratepayer – much more than the $1,062 average for other city councils. Kaipara District Council is the only council in New Zealand with proportionally more staff earning over $100,000 a year – and that Council pays a premium because it had Government appointed commissioners to sort out its financial mismanagement.”

"These findings raise several questions about the financial prudence being applied at Palmerston North City Council. Coupled with the fact that the CEO and elected officials at PNCC are all paid above the national average for their respective positions, the figures suggest that there is a degree of feather nesting at 32 The Square.”

Ratepayers’ Report also reveals that Tararua District Council has assets per ratepayer of $202,473, higher than any other council in Manawatu-Whanganui. "With the lowest average residential rates in the region, staff costs well below the national average for rural councils, and comparatively low liabilities per resident, Tararua District Council appears to be governed well from a financial perspective.”

"Ratepayers' Report is available online and free of charge so all Manawatu-Whanganui ratepayers can judge for themselves the performance of their local town hall."

Ratepayers’ Report available at www.ratepayersreport.nz

Note: All references to rates in the above comments, refer to residential rates.

Other findings relating to Manawatu/Whanganui

• Manawatu District Council has the highest personnel costs per ratepayer in Manawatu-Whanganui ($1,755, more than double the $639 in Rangitikei).

• 18% of staff at Palmerston North City Council are paid a salary in excess of $100,000. Nationwide this is second only to Kaipara District Council.

• The average residential rates bill charged by Manawatu District Council is the highest in the region, $700 more than the cheapest in the region, Tararua District Council.

• Rangitikei District Council lays claim to the lowest staff costs per residential ratepayer in the Manawatu-Whanganui Region at $639, less than half of those in Palmerston North City Council.

• Horowhenua District Council has the lowest level of assets per residential ratepayer and the second highest level of liabilities per residential ratepayer in the region.

• Councils considered for this comparison: Ruapehu District Council, Whanganui District Council, Rangitikei District Council, Manawatu District Council, Tararua District Council, Horowhenua District Council, and Palmerston North City Council.

• Ratepayers' Report is available for free at www.taxpayers.org.nz/ratepayers_report

Q & A

What is Ratepayers’ Report?

Ratepayers’ Report is interactive local government league tables covering financial position, performance, and governance information for all of New Zealand’s territorial authorities (excluding the Chatham Islands).

What is the purpose of Ratepayers’ Report?

Ratepayers' Report provides accountability and transparency to New Zealand ratepayers by allowing anyone to compare their local territorial authority with others around the country.

Where was the data sourced?

The New Zealand Taxpayers' Union working with its sister group, the Auckland Ratepayers’ Alliance, compiled the data in Ratepayers' Report after reviewing each council's annual report for the year ending June 30, 2016.

Other figures represent the most up to date figures available and were mostly obtained under the Local Government Official Information and Meetings Act.

The data has been sent to each individual authority for their review and error checking prior to public launch.

Population data is from Statistics New Zealand.

Where did the group finance figures come from?

They are taken from each Council's annual report. They include council figures, plus any subsidiary council controlled organisations.

Which councils are assessed in Ratepayers' Report?

Of New Zealand's 67 territorial authorities, 66 are examined in Ratepayers' Report. That includes all city, district, and unitary councils, with the exclusion of Chatham Islands Territory Council (due to concerns surrounding that Council's workload pressure and unique position). In future iterations of Ratepayers' Report, we plan to incorporate regional councils into the analysis.

Is this the first Ratepayers' Report?

No. Ratepayers' Report was first published in 2014 jointly by the Taxpayers' Union and Fairfax Media.

How are the councils (territorial authorities) grouped?

Unitary authorities – the 5 territorial authorities which also carry out the functions of a regional authority are grouped.

Metropolitan – the 5 large councils with a population of over 120,000.

City – 6 smaller metropolitan councils with populations between 40,000 and 120,000.

Provincial – the largest group, 27 non-metropolitan councils with a population over 20,000.

Rural – 23 councils with populations less than 20,000.

How was the average residential rate calculated?

Calculating an 'apples to apples' figure for residential rates is difficult because councils use various mixes of rates, levies, and user charges. Our approach is based on work by Napier City Council to find an average residential rate. The methodology councils were asked to use to calculate the figures disclosed in Ratepayers' Report is available here, www.taxpayers.org.nz/rp_methodology.

While we think this approach is useful and fair, the average residential rates figure should be a guide only. It does not, for example, factor in councils' reliance on commercial rates. It also puts unitary authorities at a disadvantage. Unitary authorities (Auckland Council, Nelson City Council, Gisborne, Tasman, and Marlborough District Councils, and the Chatham Islands Council) perform the functions of a regional council and therefore can be expected to have higher rates than other territorial authorities.

Were councils consulted in the process?

Yes. Every council was sent a draft version of their respective page to review.


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