Kaikoura Council Running On Empty, ECCO Secretary Warns

Tuesday, 28 April 2020, 10:14 am
Article: Lois Williams - Local Democracy Reporter

Lois Williams
Local democracy reporter

Kaikoura ratepayers who want to join Marlborough say the impact of Covid-19 will show the Kaikoura District Council is running on empty.

The East Coast Community Organisation (ECCO) has lobbied for the KDC to be dissolved, on the basis that it is too small to be sustainable, and ratepayers cannot afford to support it long-term.

The economic downturn triggered by Covid-19 'will stretch council resources to the max, according to ECCO secretary Chris Wilson.

Mr Wilson, who was a finance executive with Royal Dutch Shell for 30 years, and now owns Sleepers Vineyard at Kekerengu, is the council's independent member on its Finance, Audit and Risk committee.

"This is the risk we (ECCO) have been warning about for some time, that KDC does not have the resilience to face another relatively high-impact event.

"It has no reserves left, apart from some forestry which doesn't generate income at present; it's used what reserves it did have to keep rates down since the earthquake; it's borrowing and now it's facing a serious loss of revenue."

Marlborough in comparison, would not have that problem, he said.

"They are much bigger, they have lots of reserves and the downturn won't have the same impact."

KDC rates were supported by the district's two main industries - farming and tourism, Mr Wilson said.

"Farming will still be there - but tourism will not. Businesses that supply the rural sector will carry on but the ones that service the visitor industry will be in trouble.

"The government is saying we will have quarantine at the borders until there's a vaccine for the virus - and not many tourists want to spend two weeks locked up before they start their holiday."
The council had been planning to increase rates this year, but that was now unrealistic, Mr Wilson said.

"I don't know what they're going to do once Level 3 kicks in, I will be raising this at the Finance, Audit and Risk meeting. "

The council was currently being run by a small emergency management group, Mr Wilson said, and there had not been much feedback on what it was planning.

Chief executive Angela Oosthuizen has said the council was now reviewing its draft annual plan to see where costs could be cut to reduce the impact on ratepayers.

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