The Government's recent announcement that Local Government is in for a shake-up, with its intention to re-focus Councils on core business and rein in ever increasing levels of expenditure and debt, has been well received in the trenches.

Stuff initially set up a talking point around Council expenditure and debt per population, but this was never going to be useful in terms of measuring the financial management of Councils. Economies of scale are by far the biggest factor in terms of looking at financials on a per capita basis. Smaller Councils generally have larger debts per population, but they also generally have larger asset basses per population.

To get a better indication of where Councils are at financially, I’ve compared all of New Zealand’s Local Bodies equally ranked on three factors: Debt ratio (total Liabilities over Assets) (where lowest is best), Financial Costs as a proportion of total Operating Costs (where lowest best), and Financial Costs as a proportion of Loans (where highest best).

The combined ranking (1st is worst) of these three factors is intended to compare Councils on what they’re borrowing, how fast they’re paying it back, and how much impact any borrowings are having on the Council.

Debt Ranking	Council	Region	Type	Assets $000's	Loans $000's	Liabilities $000's	Fin Costs $000's	OpEx $000's	Liabilities / Assets (%)	Fin Costs / OpEx (%)	Fin Costs / Loans (%)
1	Kaipara	Northland	District	557,630	82,745	89,004	3,596	40,334	15.96	8.92	4.35
2	Waitomo	Waikato	District	294,552	45,372	50,639	2,524	22,840	17.19	11.05	5.56
3	Hamilton	Waikato	City	3,550,352	394,076	459,482	20,470	207,249	12.94	9.88	5.19
4	Dunedin	Otago	City	3,035,728	325,873	400,374	11,171	201,387	13.19	5.55	3.43
5	Auckland	Auckland	City	30,626,000	2,976,000	4,146,000	173,000	1,318,000	13.54	13.13	5.81
6	Tauranga	Bay of Plenty	City	3,592,992	398,774	485,948	23,621	147,584	13.52	16.01	5.92
7	Tasman	Tasman	District	1,246,828	139,587	160,366	7,372	91,643	12.86	8.04	5.28
8	Rotorua	Bay of Plenty	District	1,068,194	134,066	170,213	7,797	107,318	15.93	7.27	5.82
9	Taupo	Bay of Plenty	District	1,328,462	150,464	171,937	8,987	80,233	12.94	11.20	5.97
10	Whangarei	Northland	District	1,552,495	147,937	177,195	8,049	119,160	11.41	6.75	5.44
11	Greater Wellington	Wellington	Regional	834,603	161,284	161,284	5,424	170,714	19.32	3.18	3.36
12	Western Bay of Plenty	Bay of Plenty	District	1,167,417	150,437	174,755	10,341	69,896	14.97	14.79	6.87
13	South Taranaki	Taranaki	District	870,078	82,154	91,192	4,938	53,926	10.48	9.16	6.01
14	Timaru	Canterbury	District	782,743	60,655	77,203	3,555	55,744	9.86	6.38	5.86
15	Queenstown-Lakes	Otago	District	911,035	98,227	114,893	6,469	79,012	12.61	8.19	6.59
16	Wanganui	Manawatu-Wanganui	District	895,250	88,550	106,606	5,854	64,851	11.91	9.03	6.61
17	Bay of Plenty	Bay of Plenty	Regional	493,057	0	91,654	0	77,121	18.59	0.00	0.00
18	Far North	Northland	District	1,636,506	109,323	133,425	6,187	103,145	8.15	6.00	5.66
19	Kapiti Coast	Wellington	District	829,607	66,547	91,841	4,473	54,791	11.07	8.16	6.72
20	Matamata-Piako	Waikato	District	582,265	34,999	44,042	1,929	42,382	7.56	4.55	5.51
21	Palmerston North	Manawatu-Wanganui	City	1,346,591	139,672	165,451	11,132	103,781	12.29	10.73	7.97
22	Christchurch	Canterbury	City	7,593,726	504,126	700,979	25,712	729,289	9.23	3.53	5.10
23	Buller	West Coast	District	325,419	23,024	29,909	1,512	24,531	9.19	6.16	6.57
24	Ashburton	Canterbury	District	615,207	38,544	44,510	2,235	47,286	7.23	4.73	5.80
25	Whakatane	Bay of Plenty	District	670,422	40,510	55,733	2,146	60,623	8.31	3.54	5.30
26	Horowhenua	Manawatu-Wanganui	District	421,043	31,000	41,218	2,099	37,956	9.79	5.53	6.77
27	Masterton	Wellington	District	706,738	26,780	37,241	1,464	32,919	5.27	4.45	5.47
28	Wellington	Wellington	City	6,683,757	331,437	487,401	19,872	400,039	7.29	4.97	6.00
29	Otorohanga	Waikato	District	248,767	13,448	16,175	857	14,253	6.50	6.01	6.37
30	Ruapehu	Manawatu-Wanganui	District	355,573	26,320	33,227	1,894	28,698	9.34	6.60	7.20
31	Selwyn	Canterbury	District	1,193,034	53,080	67,617	3,198	58,242	5.67	5.49	6.02
32	Hutt	Wellington	City	1,258,384	77,993	109,279	4,640	123,269	8.68	3.76	5.95
33	New Plymouth	Taranaki	District	2,242,586	104,354	125,162	6,272	121,480	5.58	5.16	6.01
34	Westland	West Coast	District	399,947	13,528	17,145	435	16,731	4.29	2.60	3.22
35	Manawatu-Wanganui	Manawatu-Wanganui	Regional	420,008	25,000	33,272	1,485	47,471	7.92	3.13	5.94
36	Northland	Northland	Regional	122,859	0	5,938	38	25,497	4.83	0.15	0.00
37	Hurunui	Canterbury	District	335,835	11,402	16,542	448	28,358	4.93	1.58	3.93
38	Waikato	Waikato	Regional	437,697	0	18,611	257	94,274	4.25	0.27	0.00
39	Southland	Southland	Regional	76,517	0	3,333	42	20,170	4.36	0.21	0.00
40	Waimakariri	Canterbury	District	1,084,036	38,065	55,495	2,212	61,212	5.12	3.61	5.81
41	Nelson	Nelson	City	1,222,642	59,745	76,966	4,566	76,248	6.30	5.99	7.64
42	Hawke's Bay	Hawke's Bay	Regional	429,236	11,352	20,086	544	35,561	4.68	1.53	4.79
43	Taranaki	Taranaki	Regional	78,374	0	3,901	0	18,620	4.98	0.00	0.00
44	Grey	West Coast	District	328,293	13,467	18,874	858	23,429	5.75	3.66	6.37
45	Hastings	Hawke's Bay	District	1,554,089	58,171	81,469	3,712	90,233	5.24	4.11	6.38
46	Chatham Islands	Chatham Islands	District	46,129	576	2,380	28	6,527	5.16	0.43	4.86
47	Kaikoura	Canterbury	District	163,284	6,275	8,555	418	9,495	5.24	4.40	6.66
48	Opotiki	Bay of Plenty	District	185,233	4,185	7,519	209	10,799	4.06	1.94	4.99
49	Thames-Coromandel	Waikato	District	1,243,983	45,540	70,062	3,130	73,977	5.63	4.23	6.87
50	Invercargill	Southland	City	694,551	37,597	52,246	2,692	68,805	7.52	3.91	7.16
51	West Coast	West Coast	Regional	68,981	2,399	6,457	170	8,596	9.36	1.98	7.09
52	Porirua	Wellington	City	1,147,201	40,239	63,209	3,137	66,960	5.51	4.68	7.80
53	Marlborough	Marlborough	District	1,302,239	17,396	38,082	598	85,612	2.92	0.70	3.44
54	South Waikato	Waikato	District	357,741	6,576	12,204	337	27,265	3.41	1.24	5.12
55	Hauraki	Waikato	District	517,616	16,769	24,230	1,141	27,778	4.68	4.11	6.80
56	Rangitikei	Manawatu-Wanganui	District	485,110	0	5,843	16	30,846	1.20	0.05	0.00
57	Gore	Southland	District	349,316	10,949	13,824	746	17,040	3.96	4.38	6.81
58	Stratford	Taranaki	District	294,940	3,201	5,448	146	13,774	1.85	1.06	4.56
59	Canterbury	Canterbury	Regional	700,776	6,975	23,934	359	128,391	3.42	0.28	5.15
60	Wairoa	Hawke's Bay	District	208,990	0	4,812	0	22,982	2.30	0.00	0.00
61	Central Hawke's Bay	Hawke's Bay	District	723,871	12,501	14,958		27,722	2.07	0.00	0.00
62	Otago	Otago	Regional	425,875	0	6,247	0	45,814	1.47	0.00	0.00
63	Waipa	Waikato	District	1,113,401	31,000	40,868	2,174	58,176	3.67	3.74	7.01
64	Upper Hutt	Wellington	City	604,057	20,512	27,986	1,592	41,582	4.63	3.83	7.76
65	South Wairarapa	Wellington	District	374,347	8,399	11,708	639	14,819	3.13	4.31	7.61
66	Mackenzie	Canterbury	District	185,520	0	1,464	0	10,421	0.79	0.00	0.00
67	Central Otago	Otago	District	645,757	0	4,840	0	31,497	0.75	0.00	0.00
68	Tararua	Manawatu-Wanganui	District	869,011	16,052	20,737	1,151	28,818	2.39	3.99	7.17
69	Gisborne	Gisborne	District	1,846,479	33,874	52,887	2,890	74,603	2.86	3.87	8.53
70	Manawatu	Manawatu-Wanganui	District	579,071	12,024	19,852	959	38,718	3.43	2.48	7.98
71	Carterton	Wellington	District	150,095	1,636	4,419	117	13,191	2.94	0.89	7.15
72	Waikato	Waikato	District	1,403,585	24,225	42,177	1,954	70,375	3.00	2.78	8.07
73	Clutha	Otago	District	904,919	15	6,181	1	37,303	0.68	0.00	6.67
74	Napier	Hawke's Bay	City	1,345,845	4,036	19,813	394	71,964	1.47	0.55	9.76
75	Waimate	Canterbury	District	376,270	1,280	2,969	161	12,504	0.79	1.29	12.58
76	Kawerau	Bay of Plenty	District	64,165	3	1,696	1	9,435	2.64	0.01	33.33
77	Southland	Southland	District	1,341,241	387	11,134	31	58,652	0.83	0.05	8.01
78	Waitaki	Otago	District	690,162	11	8,002	3	41,451	1.16	0.01	27.27
	Total			107,416,335	7,652,720	10,300,330	438,581	6,713,392	9.59	6.53	5.73

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Figures are based on the Financial year ending June 2011. Note that both the Kaipara and Tararua District Councils have yet to publish their audited Financial Reports, so the 2011 Annual Plan figures have been used for both these Councils.

This is the submission that I made on the Timaru District Council's 2011 Draft Annual Plan:

Submission on Timaru District Council Draft Annual Plan (DAP) 2011-2012

I would like to thank that Timaru District Council for giving me an opportunity to make a submission on the Draft Annual Plan (DAP). I feel that that Council has not yet given adequate thought to some key areas of the DAP and I urge Members of the Council to give the items below more than just a fleeting glance.

It is unfortunate that Councillors on the Timaru District have a very strong feeling around what rates the community can afford while they seemingly have little understanding of the effects of increasing Council debt will have on the future of the District.

Council Debt must be Controlled

The Council has widely publicised that General Rate rise has been pegged back from the forecast rise of well over 8% to a value of 5.8% in the DAP. Planned and deferred expenditure has also been covered well, but what hasn’t received any scrutiny is the proposed change to debt levels.

I would like to pay particular attention to the Council's planned Debt/Asset ratio, as this is a both a reasonable tool to indicate Council's solvency position over time and as a measure of the Council’s performance against other District Councils in New Zealand. More...

With fellow Mayoral candidate Ron Bishop starting a campaign to keep Century Pool open, it's an opportune time to review the Timaru District's operational expenditure on Recreation and Leisure. The first chart shows the planned expenditure for the 2009/2010 financial year alongside the planned operational expenditure for the 2012/2013 financial year. The 2012/2013 financial year will be the first year in which the new Aquatic Centre will be in full operation. For Swimming Pools, the difference of $3.8 million between 2009/2010 ($1.5 million) and 2012/2013 ($5.3 million) results from both the projected $4 million running costs of the new Aquatic Centre and the closing of Century Pool.

Chart 1: Timaru District Council planned Recreation and Leisure expenditure. Note that Other includes the Art Gallery, Museum, Theatre Royal, Halls and Community Centres, Motor Camps, Fishing Huts and Forestry.

More...

This ad was run in the election pull-out in today's Timaru Courier:

Mission Statement

My name is Andrew McMillan and I’m standing for Mayor of the Timaru District Council. This is my first time standing and you might think it’s a bit cheeky to be standing for the top job. I have put a lot of time and energy into preparing my campaign and I’m up for the job. I would be very proud to represent you as Mayor.

My policy is in clear contrast to the direction that the outgoing Council has set and I am prepared to work with everyone to advance democracy, a healthy District and a change in fiscal direction. More...

Back in July I put together a financial analysis around the Timaru District Council's (TDC) growing debt problem. For that article I used a series of histograms to show the TDC's financial position worsening from 1999 (where it was placed 25th worst) to 2009 (where it was placed 16th worst) and finally 2019, which projects the TDC having the 5th worst debt to asset ratio of all 56 District Councils (including Unitary Authorities) in the country.

The Rodney District Council is going to become part of the Auckland City Council and the Tasman District Council is a Unitary Authority. So strictly speaking by 2019, the TDC is projected to have the 3rd worst debt to asset ratio of all District Councils in the country, behind the Queenstown Lakes and Kapiti Coast District Councils. More...

When I was putting together my submission on the Timaru District Council's (TDC) Long Term Council Community Plan 2009-2019 (LTCCP) last year, I noticed that the TDC was planning to take on a serious amount of debt. The TDC currently has just under $58 million in total liabilities (as at 31 March 2010) and this expected to balloon from $65 million at the end of the 2010 financial year to $158 million by the end of the 2016 financial year. At the end of the planning period, in 2019, total liabilities are expected reduce by a fraction to $150 million. More...