'Prudent' financial path for Timaru District Council

Timaru District Council appears to be pressing ahead with its Long Term Council Community Plan (LTCCP), a 10-year plan that prioritises spending on infrastructure and services, despite acknowledging it is not sure how the global economic downturn will affect it.

The council will rely on ‘‘conservative financial management'' to hold the district in good stead.

The Courier put a series of questions to chief executive Warwick Isaacs relating to measures being taken in tougher economic times. Mr Isaacs declined direct comment, instead referring the questions to chief financial officer Tina Rogers.

But despite confirming that the council keeps up with economic developments as part of its normal operations by obtaining regular economic briefings and engaging specialist advisers for assistance with managing investment and loan portfolios, Mrs Rogers said the council did not know how it would be affected by the worsening worldwide fiscal crisis.

‘‘We are unaware at this time as to what impact it may have on us.''

She said that as of November 4, 2008, the council had $7.2 million in general funds, which were all bank deposits on a short-term basis, $2 million longer-term deposit reserves and $16.5 million of bonds in a variety of organisations.

She regarded that position, as well as ‘‘prudent economic management'', as a buffer against a worsening serious financial downturn.

‘‘The world, including New Zealand, is facing a slowdown that will affect South Canterbury.

‘‘Hopefully we come from a sound financial base and are small and flexible enough to adapt to whatever happens globally to minimise the effects locally,'' Mrs Rogers said.

She said the council operated in a prudent manner and, like everyone else, was only being affected in the interest rate market at this stage.

‘‘An example [of being prudent] is putting in place lending facilities, but not drawing on them, well before they are needed.''

But unlike the banking and some industrial sectors throughout the world, Mrs Rogers was unaware of any governmental financial lifeline to the council in case the situation became dire and the district could not pay its bills. ‘‘There are none that we are aware of at this time.''

She said the 10-year plan was currently being prepared by council staff and it was unchanged by the economic outlook. ‘‘Discussions are also being held with council and community boards.

‘‘The draft LTCCP will be considered by the council in late March 2009 and public consultation is planned to commence mid April,'' Mrs Rogers said.

Asked whether the council's capital works programme was facing cuts or reviews because of changed economic circumstances, Mrs Rogers said none were planned at this stage.

‘‘Most of council's capital works are for essential services such as sewer renewals, which are planned over many years,'' she said.

A downturn in the building industry would also not be worrying the council unduly. A reduced income stream from fewer building consent applications is not seen as a serious threat to the council's viability.

‘‘This would have only a minor impact as the council budgets for $1 million in building consent fees out of total revenue of $56 million,'' Mrs Rogers said.

She considered the council was not overstaffed and took ‘‘a prudent approach to staffing''.