Phillip Jacobs

In the Beacon on Wednesday, March 18, Mayor Nandor Tanczos wrote about a council focus on prudent financial management. Amongst other things, he talked about progress on the development of the 2006-27 Annual Plan, which under section 41A(2) of the Local Government Act 2002 is the mayor’s role to lead. I think our new mayor’s financial leadership of the 2026-27 Annual Plan is lacking. Specifically:

Why was the proposed 9.4 percent rates rise and allocation of $1.35 million of savings (real and inflation reductions) to reducing the operating deficit, approved by council without a set of draft financial accounts, without line-by-line comparisons of council spending (last, current and next year) and without a serious discussion about council’s current year projected $22.9 million operating deficit, which needs to be eliminated before rates capping arrives in a couple of years?

Why did our council on December 4, 2025 accept the staff recommendation that staff should be asked to find $790,000 of budget savings and why on February 4 did staff then produce a list of savings that added up to $786,687?

First, it is up to council to exercise its right of governance and choose what level of savings to impose in each annual plan.

And secondly, if the savings found was not a list that existed on December 4, why did staff stop looking for savings at $786,687 when perhaps with a little more work, council could have been presented with options to save another $1 or $2 million?

The mayor refers to “inflationary pressure to put rates up more.” That is not correct – the proposed 2026-27 Annual Plan includes $725,000 inflationary cost reductions because current inflation rates are less than forecast in the 2024-34 Long Term Plan. If council was under any pressure to put rates up more, it would be due to new spending requests.

I also note the comment that “staff are really focused on doing more with less”. Nice words, but where is the evidence in a 9.4 percent rates rise?

And let us be clear – the council’s expected accumulated operating deficit over the first three years term of the 2024-34 Long-term Plan is about $60 million. Applying $1.35 million in savings (most of it being a benefit of reduced inflation) is but a drop in the bucket of a huge problem that the elected council simply does not understand.

And as for council’s so called contingency fund. That is cookie jar accounting – a slush fund for unbudgeted council spending. With respect, I would say that the council should never use contingency funds – it should manage its costs and budget overruns in a visible way as they occur. And finally, how come council accepted a $213,800 budget staff cost reduction against its plan not to recruit 16 staff positions included in council’s forward plans? At an average salary cost of $100,000 per staff headcount, where has the remaining $1.4 million of savings gone?

Perhaps council staff have created a $1.4 million contingency fund for their pay rises when the current, long-running, staff salary review finishes in July – conveniently within the 2026-27 Annual Plan financial year where the staff cost budget has not been fully adjusted for the proposed 16 FTE headcount reduction.