Ashburton District Council could be forced to rewrite its draft annual plan to factor in rising fuel costs and mounting budget overspends.
Revelations of higher-than-expected budget over runs at the three waters committee meeting last week sparked concerns the draft annual plan will need to be revisited to reflect increased costs.
Chief executive Hamish Riach acknowledged councillors would need to discuss the impact of the fuel crisis and the possibility of reviewing its draft annual plan. That is expected to take place later this month.
Councillor Phill Everest had wanted answers on the drinking water services going over budget, “potentially $1 million by the end of the financial year”.
“And where is that money coming from?”
Riach said the council “pay cash and we record a deficit in the water account”.
“That deficit needs to be dealt with by the water account over time.”
Deputy Mayor Richard Wilson wanted assurance that the increased costs were being updated in the annual plan.
Riach said the question is should we recommence examination of the draft annual plan signed off by council on the basis of things that have altered, most particularly a fuel crisis.
“We are wrestling with whether or not a whole host of budgets are adequate and should we come back to council to examine that.”
Riach said it presents a timing issue, as any amendments to the annual plan need to be completed in time for it to be adopted before June 30.
The first step will be to discuss fuel crisis impacts and “how does the level of service collide with the budget limitations”
The council’s executive team hadn’t yet reached the point of calling for a redo of the annual plan, but the decision lay with councillors, Riach said.
Wilson said that, like the rest of the commercial world, “some parts of council will have to work within their existing budgets and absorb those costs”.
Drinking and wastewater can’t do that, and the increased costs will have to be put in the annual plan, he said.
“We have no choice but to do it”.
Riach said it was a “much broader conversation around council activity than just water [services]”.
Everest was concerned the fuel crisis was being used as an excuse, and the budget overruns, which many predate the fuel cost increases, were outrageous.
He said the three waters budget to the end of March showed an 11 per cent overrun, “which is $1.936m, of which half of that is overheads”.
Everest wanted more detail to explain and understand the overspends as “it’s just intolerable to have that sort of increase”.
“We can’t just have that thrown into a budget that wasn’t approved.”
He was also concerned that it hadn’t been accurately factored into the annual plan.
“It’s something we need to take a look at as council, as this has just blown up in my face, and we really do need to deal with it.
“We need to account for it, and I don’t feel we have in terms of our discussion to date for the annual plan.’’
