A quick guide to council overspending

The biggest complaint I hear about our council is that rates are too high, and the services we get does not match the gold-plated bill.

A lot of the problem is about head office costs. These are the costs of running support services at Barkes Corner, the council HQ. These swallow one-third of your rates, even before a lawnmower is turned on or a truck leaves the depot.

Every organisation has some support costs so we cannot expect HR, technology and other costs to be zero, but we should expect good value for money.

Note that this bill does not include the cost of building roads and running wastewater treatment plants and libraries, for example. I am just talking about support services.

Council official documents (annual reports, annual plans and long-term plan) show that support services costs have jumped 45% in the past five years (the attached line graph).

They started ballooning when the former CEO started and have only recently come somewhat under control through the efforts of our interim CEO and councillors (including me) in the current council term (between the green and red lines).

Earlier, there was a bizarre belief on council that operational costs were outside the purview of the mayor and councillors, but we have challenged that belief.

There is much more to be done, as shown by the sharp rise in HO costs forecast in coming years in the graph (this data is from the council’s long-term plan). We must focus on this issue to get council costs (and rates) under control.

However, this is still flying in the dark with no instruments if we do not know how our council compares with similar councils around the country.

An independent economist has done for me a comparison of WBOP with peer councils in Hastings, Waipa, Whakatane and Selwyn. (The peer group for WBOP is defined by the government).

When you compare our head office costs with those councils, both as a percentage of rates (blue bar graph) and as a percentage of operation costs (orange bar graph), our council’s bill to ratepayers is head and shoulders above the others.

This is not a full benchmarking exercise (council has never done one). It is a desktop exercise using publicly available data, but the scale of the difference is clear. You, as ratepayers, are paying too much.

These very high support costs at WBOP also affect the amount of work that gets done on roads etc as these costs are then distributed across the council departments, limiting their ability to do their work as well.

It needs to be fixed.