The 2013 Local Government League Table

February 25th, 2013 at 4:00 pm by David Farrar

has just published the 4th edition of his NZ Local Government financial sustainability and community affordability League Table.

The LGLT scores-ranks each of the 67 NZ territorial local authorities in order according to the strength of each Council’s financial sustainability as well as the affordability of Council rates and charges to their local communities.

The top ranked Councils are the Clutha and Southland District Councils. The bottom ranked ones in order are Kaipara, Horowhenua, Kawerau, Buller and Whangarei.

A video of Larry talking about the league table is above, and the full league table is below.

2013 Lglt Final-7feb13 by

Local Government Mag has some further details also.

Tags: ,

11 Responses to “The 2013 Local Government League Table”

  1. Harriet (4,514 comments) says:

    “….but with high net equity[households]….” is in places like Auckland and Christchurch, and if house prices go up anytime soon – so too will the rankings of the councils.

    Or is the ratings weighted to reflect that?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  2. Michael (896 comments) says:

    You get marked down for not having low commercial and investment holdings, and for disclosing liabilities for earthquake strengthening. So a council like Hutt City, who have run modest surpluses, small rates rises (usually at inflation), reduced debt while not fallen behind on council infrastructure spending get a poor score, but sprendthrift, high rate rising, owning commercial enterprises like Zealandia, Wellington City Council gets rated highly.

    Doesn’t seem right.

    Vote: Thumb up 2 Thumb down 0 You need to be logged in to vote
  3. wrightingright (138 comments) says:

    It seems he suffers from “Vertical Video Syndrome”:

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  4. hmmokrightitis (1,508 comments) says:

    Michael: “You get marked down for not having low commercial and investment holdings, and for disclosing liabilities for earthquake strengthening”

    Correct. His method is weak, as is his understanding of what ‘strength’ actually means for a local body. He confuses what should be good – identifying risk – with bad – investments. And when asked to explain why, blusters.

    A self appointed expert of the first water.

    Vote: Thumb up 2 Thumb down 0 You need to be logged in to vote
  5. toms (301 comments) says:

    This just in: Angry old white man not happy with rates bill, waves fist at cloud.

    Vote: Thumb up 1 Thumb down 2 You need to be logged in to vote
  6. backster (2,077 comments) says:

    My local body comes in at No56 which seems a bit flattering but acceptable.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  7. Warren Murray (275 comments) says:

    Larry has been analysing local govt sector for years. First time ive seen the league table, results seem about right, although Id have to study it a bit further. IMO WCC is not as efficient as HCC, and Porirua is a disaster. Look out Tauranga

    Vote: Thumb up 1 Thumb down 0 You need to be logged in to vote
  8. lazza (358 comments) says:

    Thanks for the responses folks.

    Please recall that the League Table measures Council FINANCIAL sustainability circumstances of so that perceptions of “our” Council being better/worse than “others” can? be wide of the mark.

    The League Table is intended to alert ratepayers to their Councils relative financial (not service and other) performance.

    A better raw League Table score is given to Councils who (for just one! of a number of other factors) hold higher levels of commercial, financial and other assets merely as resources that “could” be applied (to debt reduction) when required.

    All things being equal, (both Councils stats show the same scores) Council A will be scored higher than Council B if its holdings (strength of the assets side of their balance sheet) include substantial, feasibly realisable assets. Council A’s financial resilience (sustainability) is better, their service levels, rates and democratic process … may be another! story.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  9. jave (2 comments) says:

    I don’t think this analysis is particularly valid. You criticise a number of fast growing Councils for having high debt per person (eg Queenstown, Selwyn, Auckland) but I think the analysis is incorrect to spread the cost of funding future projects only over the current ratepayer base. In some of these areas the population may almost double in 20 or 30 years so the number of people actually funding these projects is much higher than the number of current ratepayers.

    The reason the debt is high for fast growing Councils is so that the cost of projects which benefit future generations can be paid for by the people who will use the services in the future. In this case I think that is a fair and appropriate way to fund projects – why should existing ratepayers pay $2,000 now for an infrastructure project when the person who moves there in 10 years benefits from it and should pay for some of the cost and the person living there now should only pay $1,000. That is why development contributions are in place so that people moving them in the future contribute to the costs and help repay the loan that was raised for the project.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  10. lazza (358 comments) says:

    Thanks Jave for your observations.

    You are correct in assuming Council debt is a prominent influence in the scoring of the LT.

    This is because in terms of financial sustainability (the objective of the LT assessments) debt is far and away THE most powerful of the financial influences upon sustainability.

    If proof be needed of this note that Kaipara has been brought to its knees by “Debt”

    “Some” manageable prudent levels of debt are great (your views of inter- generational equity and apportionment of current and future charges geared via debt correctly refer).

    It is when debt reaches “unsustainable” levels , like is now the case at Tauranga, Horowhenua and Kaipara for example that Councils find themselves painted into a corner.

    They end up with no wriggle room for further funding, with large parts of their reveues devoted/committed to debt servicing and with debt levels above the feasible workable norms.

    Any further debt increases are hus timprudent qua “unsustainable”.

    The 2014 LT is due out shortly and the basic notions re debt (above) are retained. Thanks for the “airing” of the topic though.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  11. lazza (358 comments) says:

    Further to above.

    BTW, Jave what would YOU want to see used as criteria for determining NZ TLA Council financial sustainability? (note not the Council’s performance/equal opportunity employee status or surveys of public opinion or “whatever’) … just “FINANCIAL SUSTAINABILITY”

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote

Leave a Reply

You must be logged in to post a comment.