Council has reserves to meet emergencies

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Council has reserves to meet emergencies

Marlborough residents can be assured that Council has structured its reserve funds in a way that will ensure it is in a strong position to meet future emergencies, says Councillor Mark Peters.

Mr Peters is chair of the Council subcommittee preparing Council’s 2018-28 Long Term Plan and a member of Council’s Audit and Risk Committee.

Mr Peters says the Audit and Risk Committee has put a great deal of time and effort into reviewing the reserve fund structure and the level of exposure faced by Council.

“It may be that some councillors don’t understand the healthy position of our various reserve accounts,” he said.

The Emergency Events Reserve was just one source Council could draw on for repairs; the Infrastructure Reserve was also available.

“In 2017 the Emergency Reserve didn’t reach its revenue targets and is required to fund 2016 earthquake costs but, conversely, the Infrastructure Upgrade enjoyed better revenues that expected which compensates for that.”

Mr Peters says it is inaccurate to suggest Council’s capacity to meet an emergency was being ‘cut’.

“The figures in our LTP budgets are projections for the years ahead. Because catastrophes cannot be accurately forecast, the Emergency Events Reserve is never going to be right on target for all events in any particular year. People also need to understand these are figures that are not set in concrete; they’re reviewed annually.”

For many years before the first big earthquakes there was $10M sitting in the Emergency Events Reserve and councillors had been questioning why Council was sitting on a fund as large as that, he said.

Council’s insurers, central government and the NZ Transport Agency also contribute to emergency repairs and renewals. In a very large event Council could, if necessary, choose to defer capital expenditure to free up funding for emergency reinstatement.

‘We look at the whole financial picture when we plan our budgets. As a Council we are very strong in the area of forward planning and we have certainly taken climate change into account. That strength that has been confirmed by the AA credit rating awarded to us by an external rating agency.”

Council encourages submissions to the proposed Long Term Plan. The consultation document will be available from Thursday 5 April with submissions closing on Monday 14 May 2018.

Disclaimer

The information in this media statement was correct at time of publication. Changes in circumstances after the time of publication may impact on the accuracy of the information.