It’s interesting that the Mayor and Councillors have chosen to use the media to discuss the “Nothing out of the ordinary Council debt” rather than front a meeting with the Chamber as offered at submission time, accepted then by Chamber and yet to eventuate some weeks later.
We were assured only two years ago that debt was to max out at $41m in 2018-19, reduction would then take place and all was well.
How come that has now blown out by double with no debt reduction strategy in sight? Wild variations of this nature are a concern despite an assurance from Mayor Sowman “MDC does not have a debt problem. In fact we are very comfortable with our potential debt levels going forward”.
Chamber President Nikki de Reeper said, “Is this really the response our business community accepts from our elected Councillors who are supposed to be the leaders in our community? It’s unprofessional”
It may very well be that Councillors are comfortable with the debt levels but at no point have ratepayers heard or been told as a community how that debt level will be repaid. You may note here that rates are projected to increase by over 50% in the next ten years.
We point out that since 2006/07 financial year, MDC borrowings have increased every year.
Of the $1.4b worth of assets Mayor Sowman states that Council owns, this is mostly infrastructure, which can’t be sold.
In our submission 2015 among other things we recommended that the Council reduce debt through the strategic sale of selected Council owned assets such as the Kathmandu building and that now was not the right time to spend borrowed money. $23m on a public library and $30m on the Flaxbourne Irrigation Scheme.
In addition to this the Council guaranteed the loans for the Theatre. We don’t see this contingent liability recorded in the annual accounts or in the LTP. This raises another question, yes it may only be a few million dollars but if this has not been disclosed to the community, what else hasn’t?
With Marlborough recognised as a low income town and Statistics NZ showing a decline in paid employees by 5% and only 1% growth in business locations from 2006-2013, what is actually in place to recover the level of debt that not only has occurred but what is projected for the future?
- There has been no growth in cash reserves from 2013-2014
- Council needs to concentrate on core infrastructure and consolidate
- Sell assets that are not Council business.
- Stop being property developers
- Stop being in competition with Marlborough business people
- Buy and support locals
- Is the new library warranted given that MDC is now advertising that you can download eBooks from home just by using your library card?
- Is the art gallery or cultural centre warranted? Once again this is going into competition with business, examples being the Gillian Art Gallery and Rangitane Cultural Centre.
Our future should start now.
Look at other successful Councils around the county that live within their means while still maintaining their core responsibilities.
Consideration must also be given to our older generation whose pensions don’t increase at anything like the rise in rates year on year and our young homeowners with young families who are building the future of the Marlborough community.
Our Council has not managed to pay its way since 2006/07 financial year – so what has changed from 2006/07 to get the debt level to where it is now?
The Council’s own 10 year plan projects it won’t be able to pay its own way for many years to come.
Do remember that rates are projected to increase by over 50% in the next ten years.
Councillors, now is the time to face up to facts and issues.
MARLBOROUGH DEBT – IT’S NOT OKAY