Far North debt levels defended

By Peter de Graaf

1 comment

A Far North district councillor has hit back at claims about his council's debt, saying it is the lowest of Northland's three district councils when compared to rates income or the number of properties paying rates.

Steve McNally, former chairman of the audit and finance committee, took exception to a statement by Whangarei District councillor Warwick Syers in an Advocate report about the two councils' unitary authority proposals.

My Syers was wary of a single, Northland-wide unitary authority because Whangarei did not want to take on the Far North's debt and potentially huge future costs for improving infrastructure. Kaipara's huge $80 million debt could be dealt with by a targeted rate paid by Kaipara residents. He said Whangarei had already borrowed heavily to improve its infrastructure but the Far North had yet to do so.

Mr McNally conceded Far North debt didn't look good when compared to its relatively small population - but a more meaningful comparison was the amount of debt per rateable unit (the number of properties paying rates).

As at March 31, the Far North District Council's debt stood at $90.6 million or $2616 per rateable unit while Whangarei's $157.8 million debt worked out at $4290 per rateable unit, 60 per cent higher. The Kaipara's $79.1 million debt worked out at $6990 per rateable unit. The difference was starker still when debt was compared to each council's income from rates, Mr McNally said.

With rates income of $78.3 million, the Far North's debt-to-rates-income ratio was 1.15. With rates income of $74.7 million, Whangarei's ratio was 2.11 and Kaipara's 3.07.

Figures could be worse because Whangarei District Council did not show working capital or overdraft in its debt figure, Mr McNally said.

The numbers proved the Far North's tight financial management, he said.

"The claims by the Whangarei District Council that they don't want to incur Far North District Council debts are nonsense when finances are viewed in this light. The Far North doesn't want to be lumbered with Whangarei and Kaipara debt, which is mind-blowing."

Both councils, however, want the same thing from the local government reform process currently under way - separate unitary authorities for the Far North and Whangarei/Kaipara. The Northland Regional Council wants a single unitary authority for the whole region.

- Northern Advocate

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