Council’s General Fund has operated at a loss each year since the amalgamations in 2004. The loss is an accounting loss after providing as an expense, an amount for depreciation (and eventual replacement) of assets. This provision is a substantial amount each year, say around $30M. In affect Council has not been fully funding the depreciation expense. On a cash basis, which is different to the accounting result, Council has operated responsibly.
Council has to put the General Fund in a profitable operating position, by finding about $15.5M from increased income and reduced expenditure, by the year 2020/21. Council has to satisfy the Office of Local Government that a plan is in place to achieve that result.
It is planned that about half that amount will come from a reduction in services involving the loss of some 24 mainly indoor jobs of which 16 are vacant, and the other half of the amount from a Special Rate Variation of 8% (including estimated rate peg of 2%) per year for each of 3 years 2018/19 to 2020/21.
In very brief terms, that is Council’s adopted position at the moment which will form part of community consultation following Council’s May meeting. There is another option rather than the SRV, that is more cuts to services which would result in the loss of a further 25 jobs (it may be a lot more), bringing the job losses to well over 50 in total. I doubt that a majority of the community would want to go down that path but it is an option.
While the General Fund rate is planned to increase commencing in 2018/19, the rate for next year, 2017/18 will fall by an average of 3.2%. The cumulative increase of 25.9%, including rate pegging, will follow a reduction of 3.2% for next year.