Any the wiser?

To date two main reports have been published on the financial implications of Wairarapa becoming a separate unitary body in the proposed unification of the current nine local bodies in the lower North Island. Each report predicts widely differing outcomes.

The Martin Jenkins (MJ) report ,commissioned by the current Wairarapa councils, predict an operating expenses over income shortfall in delivering services of $1.8 million. This would result in an equivalent additional $78 rise in the 23,000 Wairarapa rateable properties.

The PricwaterhouseCooper (PwC) report, commissioned by the Greater Wellington Regional Council, predicted a deficit of $7.9 million dollars requiring a $344 per property rise – plus a further $2.6 million if the current cost of public transport was added, a $457 per property rise.

The Local Government Commission has now commissioned BERL to produce ’an assessment of likely levels of costs to any future Wairarapa unitary authority. Of particular explaining the differences between to two existing sets of estimates ( MJ and PwC)’.

The now released BERL report considers that the MJ or PwC reports are not directly comparable and neither are true estimates of a Wairarapa Unitary Authority’s viability.
BERL sees the MJ report as reflecting costs of delivering services under current governance rather then being about a Wairarapa Unitary Authority’s financial viability. Likely future expenses such as required capital investments, transport, environmental requirements and policy changes are not taken into account.
Likewise the PwC report is seen as ‘not an estimate of financial viability but rather a reflection of the status quo at the regional level’. BERL considers that this report needs more detail to allow for a good understanding of how the exact allocations are done.

In it’s concluding summary BERL points out that the best case scenario (MJ) would require a further rates increase of an average 3.5%. However BERL has concerns that this best case scenario is reliant on some treatments for which robust evidence is absent. If the PwC allocations are accepted a rates increase of 15% (or 19.5% with transport) would be required.

BERL concludes that a Wairarapa Unitary Authority is unlikely to be viable in the long term.
Which is succinctly summed up by Carterton District Council CEO Colin Wright who is quoted as saying: “The real question is whether Wellington is going to pay for a whole lot of things in Wairarapa or would they be funded by targeted rates on the area benefiting?”

The full report can be obtained at www.lgc.govt.nz.
To date hundred of thousands of ratepayer’s dollars have been spent on reports and advocating the preferences of the various involved councils. And doubtless more will be spent. Anyone for the status quo?