Trading tough at council company

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Queenstown council-owned company Lakes Environmental is struggling to make a buck and may become a casualty of its master’s cost-cutting. 

With Queenstown Lakes District Council’s wide-ranging organisational review commencing this week, and LE already declared an at-risk species by mayor Vanessa van Uden (right), Mountain Scene looked into the regulatory company’s latest financials. 

LE only just scraped into the black with a miniscule pre-tax profit of $6479 in the year to June 30, 2012. 

LE is a not-for-profit company – but the previous year’s profit was a far healthier $248,028. 

What’s whacked the bottom line is revenue plummeting more than costs – income is down $568,000 or 7.5 per cent but costs are just four per cent lower. 

The revenue reduction was almost solely due to a decline in consent processing – resource consent fee income was down six per cent and the drop in building consent income twice that. 

LE’s annual report says the company has, for some time, had a “sinking lid policy” on staff – numbers have slimmed from 80 to 62 over the past four years. 

However, those 62 remaining staff cost $4.8 million in wages, according to LE’s annual report. 

Simplistically, that’s an average of $77,419 per person – although staff leaving during the year would inflate that somewhat. 

No doubt LE boss Hamish Dobbie and his board have found the going tough since the property boom ended, but they can’t say they haven’t been warned about black clouds. 

Announcing her council’s far-reaching review last month, Van Uden singled out LE for special mention: 

“Lakes Environmental has now been operational for five years and it’s timely to review its operational processes and the ongoing suitability – in terms of cost, efficiency and effectiveness – of the council-controlled organisation model and any alternative models for service delivery,” the mayor said in December.