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Local Government

TCDC’s Social Services Extravaganza – Proposed 2024/34 LTP $4.4m Spend

TCDC Chief Executive Ms Aileen Lawrie agrees, in the Coromandel Informer, 12 March 2024, in a well-structured “right of reply” to my opinion piece “Leave social services to Wellington” (5 March 2024), that Flemming is right when he argues that in these tough times TCDC should focus on delivering essential services”. She also argues that “…Council is not a delivery agent [of social services], but we play a role”.
 |  Flemming H Rasmussen  | 

1. Context

TCDC  – After the 2023 extreme weather events, central government (Wellington) supported our district. One area of support was funding through a temporary government storm recovery grant. TCDC used part of the grant to employ “social navigators or social connectors” You might have seen some driving around in TCDC-branded cars in the last +12 months.

Recovering from the extreme weather events required extraordinary initiatives. The timing and funds of the grant were well received. The social navigators have performed important tasks in aiding our district in getting back on its feet.

By its very nature, a grant is time limited. In this case, the government’s grant runs out in 15 months (30 June 2025)—a reasonable time from when the events occurred in Q1 2023.

2. TCDC   Stepping Outside Its Statutory Purpose

TCDC, in its 2024/34 Long Term Plan (LTP)Consultation Document (CD) (p. 25) headed “Investing in connected communities”, proposes to make this social service permanent. TCDC wants to make a social service permanent, which Wellington stepped in to provide and fund on a time-limited basis under extreme circumstances.

Essentially, TCDC proposes that you and I, the TCDC ratepayers, fund this $4.4m social service (in addition to the taxes we all pay Wellington to deliver social services).

This is but one example of TCDC not focusing on its obligation to deliver core (essential) services only— that is what we pay our rates for. Nothing more, nothing less.

Wait, it gets better. In the TCDC world, spending this $4.4m on social services allegedly has no impact on our debt (really)!

3. Service of Debt (Interest) – Quadrupling (x4)

In their “let’s do some social good” (“we do not pay,” the ratepayers do) modus operandi, our yearly TCDC finance costs (interest) in the LTP balloon from $3.6m this year to $14.5m in 2033/34. That’s a quadrupling (x4). They plan to borrow an additional $146m over the next eight years. That is on top of the almost $80m we already owe ($79.4m by 30/6/24 to $225.8m by 30/6/32) (TCDC “Financial Statement”, p.4 “Prospective Statement of Financial Position”). Maybe that is where the money is coming from. Borrowings. Debt.

4. The Real World, Our World

In the real world, most of us go to work to make a living, pay rent or a mortgage, pay taxes, and put food on the table. In our world, not spending this $4.4m would constitute a $4.4m saving, enabling us to borrow $4.4m less money and pay less interest!

5. Conclusion

I do not know about you, but I’m unsure about TCDC’s rationale. I would appreciate it if the Mayor, his merry Councillors, and the ever-increasing head count of Council staff could please let us know where the tree is and where the money grows. Until then, Council must focus on delivering core services only, most cost-effectively and efficiently. Nothing more, nothing less.

What do you think? Would you go to the bank and borrow an additional $4.4m you do not have to spend on something you are not required to do?