Council debates principle of spending surplus

June 8th, 2012
[by David Armstrong]

What does a responsible council do when it has a surplus in part of its roading and drainage budget approaching year end - spend it on other needed work or bank it to reduce rates for the next year?

This was the essence of one debate at yesterday's meeting of TDC's Engineering Services Committee, held as it occasionally is at Motueka's Memorial Hall. It was a debate that produce a tied 6-all vote, requiring the chairman's casting vote to decide.

A $60,000 surplus was signalled in a report of an expected under-spend of funds in Council’s Low Traffic Road Seal Extensions Account, which helps private landowners get nearby low-use roads sealed through a 50% subsidy. Fewer applications for these subsidies were received through the year than expected, and council staff requested that the $60,000 saved be declared surplus and returned to Council’s General Account.

Several councillors argued that if money had been saved it should go towards reducing the budget for the following year, thus reducing rate demands by a small amount. This is what ratepayers were expecting of a prudent council in tough financial times.

Others said if there was money left over it should be spent on any other roading or drainage projects that have been cut from the budget as a result of council's belt tightening this year. They said there are so many important improvements and repairs that are unable to be done, which could be enabled by using this unspent $60,000.

The issue was strongly argued with all councillors having their say, and a division called for. The 6-6 vote was settled by the casting vote of Councillor Norriss, and a subsequent resolution passed that the money go into the roading and drainage account.

What do readers think? If you have an opinion on the issue of spending surplus money, use the email link below to let us know.

Comment by Sjors Brouwer:
[Posted 10 June 2012]

In life you have both windfalls and unexpected extra cost. One with experience in budgeting will have learnt that if you spend a windfall, you end up borrowing (more) for the next, unavoidable, unexpected extra cost.

Good budgeting, where one takes care of the bigger picture, says that you do not spend it, but you put it aside for bad times. Unfortunately this is not the norm. Unfortunately 'budgeting' often means to always spend the full budget, or else........ (what will happen to the - strictly departmental - budget next year).

I am disappointed that so many councillors, who should consider the overall wellbeing of their council, all departments, all rate payers, in this case chose the narrow-and-short-term option. PS In writing this reply, I could find many synonyms for windfall, but could I find a satisfactory antonym?

Comment by Jo-Anne Vaughan:
[Posted 15 June 2012]

Golden Bay residents in Pohara and beyond are desperate for safe cycling through to the schools and Takaka township. For this we need a cycle lane along Abel Tasman Drive. The cycle lane has been in the plan for a long time but keeps getting put back (currently still planned but for the 2022-32 LTCCP.

The Pohara area has a population close to 800 people and they are land locked for using any transport other than motorised vehicles. They are desperate. The road is flat, a short distance from Takaka but narrow and dangerous to cyclists. Some families need two cars to transport children to various activities in Takaka. This $60,000 would be brilliant for the purpose of creating a cycle lane from Pohara to Takaka.

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