After spending everything Auckland Council finds coins down the back of the sofa and wants to spend that too

So Auckland Council has shoved up rates at excessive levels for years, borrowed heavily – and now is close to having a credit downgrade.

I used to think that the only muppets who could make such a financial balls-up are gamblers, boozers and meth addicts who spend all their paycheck and don’t look after their families.

But no – it appears Auckland Council are also drunken out of control spenders.

The Auckland Council is looking at using a “rainy day” fund to reduce the risk of a credit-rating downgrade and higher rates.

The council is set increase rates by 2.4 per cent this year, but its $7.5 billion debt is placing pressure on further rates rises.

Credit rating agencies have warned the council of a rating downgrade if its debt-to-revenue ratio approaches 270 per cent.   

Mayor Len Brown’s latest budget forecasts a debt-to-revenue ratio of 265 per cent.

A one-notch downgrade, he said, would lead to an $11 million rise in interest costs.

Interest costs are funded by rates. A $14 million increase in running costs equates to about a 1 per cent rates rise.

To create headroom, council officers have suggested drawing down $100 million over each of the next two years from a diversified investment portfolio, currently valued at $335 million, to manage the debt ratios.

The “rainy day” reserve fund is part of the liquidity policy of council, a budget report says.

Some rate payers might find it acceptable if they could see massive capital investment.

But Auckland Council has nothing to show for it. Not a brass razoo. Which is why they are muppets.

I hope ratepayers can get up off the apathy couch to make a song and dance about this.

 

– NZ Herald


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As much at home writing editorials as being the subject of them, Cam has won awards, including the Canon Media Award for his work on the Len Brown/Bevan Chuang story. When he’s not creating the news, he tends to be in it, with protagonists using the courts, media and social media to deliver financial as well as death threats.

They say that news is something that someone, somewhere, wants kept quiet. Cam Slater doesn’t do quiet and, as a result, he is a polarising, controversial but highly effective journalist who takes no prisoners.

He is fearless in his pursuit of a story.

Love him or loathe him, you can’t ignore him.

To read Cam’s previous articles click on his name in blue.

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