Council under double strain

John S. Wilson
John S. Wilson
The loss of development contributions towards future growth projects has become a "double whammy" for the Queenstown Lakes District Council as it is forced to borrow more money.

Last month, the council announced it was facing an "unacceptable" level of debt to fund population growth projects by the end of the next 10 year plan period.

In the economic boom, growth-related projects attracted contributions from developers, but in the economic recession payments had slowed.

The reality of higher debt is that the QLDC is being forced to borrow more to pay for projects.

"We are being hit by a double whammy - lost development contributions and also hit by interest," finance and corporate accountability committee chairman John S. Wilson said.

In yesterday's committee meeting, accounting manager Ian Stewart said revenue for the year to March was "about $3.5 million below budget" and operating costs for many departments were high.

Water utilities were responsible for a large portion of the budget blowout - the establishment fees for contractor United Water (UW) accounted for $420,000 of the variances in the report.

QLDC finance general manager Stewart Burns said there had been an assumption in the annual plan the money was to be paid over three years.

Instead, it was paid as a lump sum, straining the 2008-9 utilities budget.

Mr Burns said the extra money had been raised through a loan - as had been money to cover additional expenses from higher service demands being dealt with by UW.

Water services debt amounted to about $80,000 for Queenstown and about $30,000 for Wanaka.

When asked by Cr Vanessa van Uden who would pay, Mr Burns said "the community", but if the council had negotiated three year instalments, higher charges would have been passed on from UW.

Other interest was from land sales "not coming to fruition" in the economic downturn, Cr Wilson said.

Community services were also over budget - Alpine Aqualand made up a large portion of the $633,000 budget shortfall in that area.

Mr Burns said there had been "clear signs" since December the council was "heading for an overspend", but action was taken.

Management reports were carried out and managers were asked to explain where additional money was being spent and also to offer solutions.

Add a Comment

 

Advertisement