Multi Million Dollar Rates Deficit

Multimillion-dollar rates deficit revealed in NPDC report

The New Plymouth District Council has revealed a significant shortfall in its budgeted surplus for the most recent financial year. VANESSA LAURIE / TARANAKI DAILY NEWS

A $37.3 million shortfall in its projected surplus for the 2023-24 financial year has been revealed by the New Plymouth District Council in its draft annual report.

The deficit, and the drop in projected surplus from a budgeted $54.6m to $17.3m, comes at a time when New Plymouth residents face an average rate increase of 12.4%.

Council chief executive Gareth Green said the surplus shortfall, combined with the deficit and the continual rise in budget costs, highlighted the importance of last year’s restructure as the council sought to find considerable savings across its operations.

“This [restructure] resulted in reducing the number of positions by 73 and achieving around $7m saving in operating costs for the next financial year, 2024-25,” he said.

“We are confident in meeting ... a $10m operational savings target next financial year.”

However, the draft report also highlighted that the council’s operating expenditure had reached $233.6m, which was $18m higher than budgeted.

That rise was reported as being “beyond our control” given a $4.1m loss on derivatives, $2.5m in depreciation, $2.3m in asset disposals and$7.9m of increased direct costs across various areas of the council, the report said.

Adding to the grim financial position was the council’s operating revenue, which came in more than $19m short of budget.

New Plymouth mayor Neil Holdom has outlined the pressure caused by rising council costs. (File photo)VANESSA LAURIE / TARANAKI DAILY NEWS

In the draft report, New Plymouth mayor Neil Holdom highlighted the impact that global inflation was having on councils across the country. They had faced a 27% rise in civil construction costs since 2020, he said.

Included in the financial summaries was a $1m drop in revenue from building consents owing to lower activity levels, $1.5m of over spending on wastewater treatment, $1.9m of overspending on water supply, and a $700,000 drop in parking revenue.

However, the biggest discrepancy came in the council’s transportation department, which reported a $3.4m shortfall because of the redirection of spending from capital renewals to its operations budget.

That figure was questioned by several councillors at last Tuesday’s finance, audit and risk committee meeting. They were told the transportation department would be taking a different approach to its operations over the next financial year.

Former interim council chief executive Miriam Taris, whose remuneration for the six months she spent in the job was also in the report. (File photo)VANESSA LAURIE / TARANAKI DAILY NEWS

Meanwhile, the draft report also revealed the sums spent on the total remuneration, including any non-financial benefits, of top council managers

for the 2022-23 financial year after the sudden resignation of chief executive Craig Stevenson.

Tarris flew in and out of the city over a six-month period, working three days a week.

Stevenson also collected remuneration of $168,029 during that financial year.

The published figures followed a refusal last year by the council to reveal a breakdown of what each boss was paid.

Also revealed was Green’s $407,804 total remuneration for the 2023-24 financial year.

Overall, the council paid salaries to 778 employees, 114 of whom were paid between $100,000 and $119,999.

Sixty-two were paid between $120,000 and $139,999, followed by 18 between $140,000 and $159,999, and 13 between $160,000 and $199,999.Six were paid between $200,000 and $319,999.

Of the elected members, Holdom received $155,465, while deputy mayor David Bublitz received $89,541.