Taupō's District Council's meeting last week included reports on how it had been affected during the lockdown. Photo / File
Taupō's District Council's meeting last week included reports on how it had been affected during the lockdown. Photo / File
The Taupō District Council's finances may have taken a battering during the lockdown but its investments have since mostly bounced back.
Head of finance and strategy Alan Menhennet told last week's council meeting its finances were in a better state than most other councils coming out of the Covid-19 crisis,despite unforeseen personnel costs due to cancelled annual leave and the deferment of work on capital projects.
"Council is in a really strong financial position leading into the next financial year and we hope to be able to say that in 12 months time when we go into the Annual Plan, so compared to a lot of other councils we should be happy with what we've achieved."
The council's $60.8 million TEL fund is valued at around $500,000 lower than at the start of lockdown. Only 13 per cent or so of the fund's value is in shares so it was not badly affected by March's sharemarket slump. Most of the rest of the fund is invested in fixed-interest. The council's net debt was $24.8 million at the end of April and is related to large individual infrastructure projects such as the Taupō water treatment plant.
However, the remainder of council finances has been hard hit. Loss of income from fees and charges during lockdown and lease fee waivers have all impacted council revenue. On top of that, council has slashed its proposed spending in its Annual Plan to deliver a promised zero per cent rates rise in the coming financial year.
Mr Menhennet told the council meeting he divided recent times into three - Before Covid-19, During Covid-19 and After Covid-19.
Taupō District Council head of finance and strategy Alan Menhennet. Photo / TDC
"We are starting to see the effect of During Covid," he said. "And we don't know when we are going to move to After Covid, that's part of the challenge of the Annual Plan.
"We've done a forecast for the year which is still showing that we are going to end up pretty much in line with what the budget is."
Mr Menhennet said managing council's investment portfolio during the Covid-19 crisis had also been "a challenge".
"When you have a 2.5 per cent OCR [official cash rate] and you are budgeting for yields of around 3 per cent it's nigh on impossible," he said.
The efforts of Mr Menhennet and his team were commended by Cr John Williamson who said he had "always been a fan of the stewardship of Mr Menhennet and his team and [want] to give a vote of confidence in your team."
GOLOCAL
Some of the extra costs during the lockdown came from running the Southern Emergency Operations Centre which was a joint effort between the Taupō District Council and five other councils. Head of regulatory and risk Brian Fox said some parts of his staff team had been heavily involved in civil defence operations over that time.
"There was a unanimous decision that Taupō was the best place to run that activity...it's times like this that we see that investment that council makes in peacetime being used in wartime," he said.
When Taupō district mayor David Trewavas queried the cost of running the Emergency Operations Centre, Mr Fox said the costs fell where they lay with different councils and that welfare costs could at some stage be recoverable from central government. Direct welfare costs such as putting people in hotels during the lockdown came from central government.
