As part of a ratings review, Standard & Poor's has reviewed New Zealand councils financial operating performance between 2009 and 2012 and found "generally strong financial management".
Rated councils have responded to the softer economic outlook during the period with more conservative forecasting, S&P found, and they cut back on capital expenditure plans.
S&P has credit ratings on 15 New Zealand local and regional governments at high investment-grade, ranging from 'AA' to 'A+'.
Only Christchurch and Dunedin have a 'negative' outlook on their current rating, the rest are 'stable'.
S&P says New Zealand's institutional framework is "extremely robust" and this encourages strong financial management. Because of this S&P thinks New Zealand councils can tolerate more debt than some international peers.
Council rates revenues from 2010-2012 did not rise as much as they forecast in 2009 because of slower population growth. As a result, the councils have cut their forecast operating and after-capital account balances in their 2012-2022 Long-Term Plans. Global uncertainty has taken a toll on economic growth over the past three years and depressed several councils' investment income, the S&P review shows.
The performance of Auckland Council dominates the review and now represents more than 30% of the sector. It too delivered results lower than the 2009 forecasts of the eight councils that were combined into the 'SuperCity'.
Auckland Council's adjusted cash operating surpluses as a percentage of adjusted operating revenues averaged 12% over 2010-2012, down from those 2009 forecasts of 15%.
Likewise, its 2012 Long Term Plan forecasts now expect surpluses to average 17%, down from 21% in 2009.
To address this weaker revenue growth, Auckland Council expects to spend less in its adjusted cash operating expenditure, by about 7% per year in its 2012 LTP forecasts, relative to the 2009 forecasts over the same time period, says S&P.
Auckland Council capital programmes were under spent during the transition phase as well.
Under spending on capital projects is an issue across all councils surveyed, and the ratings agency expects that trend to continue. However, if councils achieve their entire capital-expenditure programmes as budgeted each year, it is likely to increase their debt levels, S&P says.
The reports concluded that "despite New Zealand councils' expectations of weaker revenue growth, we consider the rated New Zealand councils as being able to maintain their credit quality, largely because of the country's strong institutional framework and councils’ generally strong financial management."
Not all councils are performing so admirably.
Unrated Kaipara District Council has fallen on hard times and is under management by Government-appointed commissioners. And now Westland District Council is suffering from similar issues with local ratepayers protesting high debt and sharp rates hikes.
4 Comments
Councils' revenue is strong, and it should be considering all the money we pay them!
Councils' disburstments are weak, hence their strong financial position!
Is this a good situation? I think not, considering I used to pay less than $700 per year to the Waikato District Council in 1995, when I bought my house. Today I pay $2400 to the WDC and $600 to the Waikato Regional Council, who used to be Enviroment Waikato after they split from the WDC. Furthermore, the $700 included rubish collection, for which we payed $30 per year and we could dump rubish for free as long as we took it to the collection spot. Also, once a year we could place unwanted items for collection, old refrigerators, matresses, and the like, and they would collected it for free. It was a great system!
Then they privatized the rubish collection operation in 2000, and today we pay $2.60 per bag of rubish collected. That adds up to more than $100 per year if you only put one bag per week; we pay $45 per cubic meter for 'green waste' which they turn into mulch and sell for $10 per bag of 20 liters, and recently I took a few old corrugated iron sheets which will probably be recycled and was charged $20 dollars after I unloaded it. No warning, no signs, nothing to say how much it would cost me.
To add insult to injury, their valuation of my property has dropped by $200,000 since the GFC, but my taxes have stayed the same. They managed this trick by increasing the rate at which they charge property tax, and now with real estate booming again, I am bracing for an upward revaluation of my property, and hence more taxes to pay!
Is it any wonder they are doing so well?
HGW
sheesh Kimy.....manhole itself suggests no digging...they are meant to remain exposed
Manhole located , the Council drainage plan should show you where the storm water goes.
50, 000.00 for a connection....what are you running there Maui..?
Sounds like your being groomed to me there Kimbo, sack em all, go have a consult with the drainage inspector...and ask relevant questions to save money as in the ASA3000 stnd......if you don't ask what is acceptable under the requirement specifically , they certainly wont tell you...as it allows them more revenue on rescource and inspection.
Somebody's doing something at your expense........If Transit N.Z. have covered the Manhole, the onus is on them to restore it as shown on the plan...... unless it was a proposed manhole.....
It would be worth you having a chat to a contractor familiar with the Area...cuts out the bull before you go back to the Engineer.
Roskill.....eh ..? Countdown or May Rd....both are fraught with massive upgrades, yet sit upon billions of tonnes of scoria...Should convert the Three Kings Quarry into a lake or a multilevel carpark with transit hub......ha ha.
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