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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  • Just me

    Just when you think Len and the rest of the incompetent nimrods couldn’t make it any worse… here we are…

  • The Fat Man

    Yes sell whats left of the family silver only it will struggle to cover the interest costs or pay for the new Palace.

    $7.5 Billion is a serious number any idea on how much that is per rate payer.

    • johcar

      Probably north of $30K per ratepayer….

  • RobT

    Yes it’s all that much easier to spend someone else’s money. Different story I bet when they are setting their own budgets and drawing up “must have” lists at home.

  • Crowgirl

    One last gouge before they all get the heave-ho shortly methinks.

  • Tiger

    I am appalled as an Auckland ratepayer that these idiots think the party can continue. We do not want to end up like Detroit – http://www.nytimes.com/2013/07/19/us/detroit-files-for-bankruptcy.html?_r=0
    Vote wise Aucklanders.

    • contractor

      Chicago’ debt equals NZ$27 billion, and I think their population is 8 million, so debt per head is $3,375, Auckland $7.5 billion 1.5 m population = $5,000 per head! Leighton was right when he told Brown post election to his face that he would bankrupt Auckland.
      Edit sh be Detroit, maybe half the size of Chicago.

  • “I hope ratepayers can get up off the apathy couch to make a song and dance about this”? probably not, and there is a better than average chance they will vote in Goff who will carry it all on unchecked.

  • edenman

    These muppets want to spend billions on a rail track which will require massive subsidies by ratepayers forever. This will just add to the debt which we the ratepayers will be burdoned with. They are out of control.

    • OneTrack

      And they still haven’t produced one person who will start taking the train once the loop is in. A real worthwhile expense, as long as they are using other peoples money.

  • Toby

    wow just wow.
    this should be the lead item in the news tonight and the front page of every newspaper.
    the silence on it is deafening.

  • Win

    The Auckland Council spend up has gone to useless frills such as a pedal powered library and other nonsense dreamt up by Ludo Campbell and his cohorts.

  • Why is it every time these clowns spend more on nothing, their first idea to pay for it is put up rates…….. How about acting prudently for once like I have to in business and cut your expenses.

  • Anthony

    They’ve spent $1.2B on an unfinished IT system, and $157M on a leaky office tower that is going to cost another $31M to fix. All this while paying themselves bloated salaries.
    Labour Party controlled council.
    This is how the money has gone.

    • rexabus

      It’s disgusting and the bare facts of their misspending should be plastered all over the front page of our auckland daily newspaper.

  • Keanne Lawrence

    Phew, what a break they have a rainy day fund. Surprise, surprise. A Tui Moment in the making.

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