Some of the illustrations of lack of substance in the OW submission were shown in a recent blog OW Breakaway all at Sea which focussed on the issues of Council infrastructure and the risks from natural hazards. This blog concentrates on the deficiencies in the OW submission regarding debt, debt servicing costs, legal costs and start-up costs. The OW submission also takes little account of the responsibilities of a Unitary Authority and associated costs. These will be the subject of a future blog.
OW have estimated a Contingency Allowance of $1,000,000 but admit in Para. 15 of Appendix J that if the Local Government Commission determined that the debt transferred from Auckland Council was double the figure anticipated then the debt servicing cost alone could nearly double to around $2,000,000 P.A.
The current debt per household in Auckland is $20,000. With just over 5000 households on Waiheke that makes the total debt liability around $100 million that Waiheke would inherit from Auckland Council. Even if a generous LGC determined to only transfer half of this amount it would single-handedly blow the ‘contingency fund’ figure out of the water.
There is nothing in the OW budget for legal costs. Legal fees incurred by some members of the Waiheke community (in excess of $400,000) in support of their opposition to the Matiatia marina RMA application are a clear indication that court costs alone could potentially run into hundreds of thousands if not millions of dollars. Waiheke is a highly litigious community and any future Waiheke Council would have to bear the legal costs. It is highly irresponsible of OW to make no provision.
The Waiheke economy is dependent on the visitor industry and hospitality accounts for the highest number of employees. There is no allowance of a fee for the continued use of ATEED’s services or a stand alone marketing and development department even though ATEED have made it quite clear that they are accountable to Auckland ratepayers as a whole and would have no mandate to represent a de-amalgamated Waiheke. It would be naïve of OW to expect such professional services to come at no cost to Waiheke residents and businesses.
There is no provision for general advertising and PR for a new authority. There is no allowance under set-up costs for the branding of a de-amalgamated Waiheke.
The OW budget also fails to provide for the development and on-going maintenance costs for a future local swimming pool even though Our Waiheke have promoted this ‘modest’ development as one of the greater benefits of de-amalgamation.
All in all, the OW budget is a fairy tale that feeds the delusions of grandeur of the Waiheke Local Board and a small number of its supporters. The lack of budgeting skills demonstrated by OW in no small measure shows why we have a Waiheke Local Board that has achieved so little, some would say nothing, with the $4 million discretionary spending it has had during the last three years.