Heat on QLDC

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The local business community wants a fresh face to lead Queenstown Lakes District Council.

The Chamber of Commerce is telling QLDC it’s “time for a change” of chief executive.

The chamber call reflects a poll of businesses – commissioned by Mountain Scene – in which two-thirds of those with an opinion didn’t want current council chief executive Duncan Field reappointed. After nearly 12 years at the helm, Field’s contract expires soon and QLDC has advertised nationally – applications closed on October 12.

Field is known to have thrown his hat in the ring for a renewal of his $280,000-a-year role.

The Chamber issued a statement yesterday on behalf of its nine-strong board. One unnamed board member abstained “because of conflict of interest”.

The Chamber claims whoever runs QLDC is virtually king of Queenstown: “Arguably, it is the most important position in the district.”

All QLDC decisions and expenditure stem from its boss.

If council debt rises “near predicted levels of upwards of $400 million”, alleges the Chamber, “future rates will make a huge impact on the whole community”.

“[Rates rises could] seriously affect the affordability of living in Queenstown,” the Cham­­­ber believes.

The debt mountain of QLDC and its quangos grew by $31 million in the year to June 30 and sits at $123m.
“Council administration [must] have an in-depth understanding of economic matters.”

The Chamber statement continues with a carefully-worded paragraph warning councillors against reappointing Field:

“In all these circumstances, the Chamber board considers it is time for a change. The Chamber considers any council CEO should be a person with very strong business and finance skills, as well as a strong ability to engage with the community and work with central government to negotiate win/win deals.”

Field is a qualified lawyer with local government experience at both Wellington and Dunedin city councils before joining QLDC in 1998.

Saying “hiring the CEO is arguably the most important decision councillors make”, the Chamber implores QLDC to choose carefully.

If you can’t find the right person then consider re-advertising, it says – and instruct “recruitment consultants to be more aggressive in headhunting to ensure the district approaches the next decade with the right person at the helm”.

Despite several ap­­proaches, neither Field nor mayor Clive Geddes responded by deadline.

Before becoming mayor, Geddes was the Chamber’s executive officer.

The Chamber chief executive is Ann Lockhart. Its board members are: Julie Hughes, Jan Hunt, Anthony King, Andrea Lambie-Shaw, Alastair Porter (chairman), Richard Thomas, Kim Wilkinson, Miles Wilson and Phil Wilson.

DISCLOSURE: Chamber board member Richard Thomas is the publisher of Mountain Scene.

Looking at the books

Queenstown Lakes District Council has been hard-hit by grim economic times.

Its newly-released an­­­­nual report reveals a loss of $6.1 million in the year to June 30, 2009.

This compares with a planned surplus of $31.5m – a reverse of $37.6m against budget.

Profitable contributions from QLDC “subsidiaries”, as our corporate-speak council calls them, reduce the combined loss to $4.3m.

The scale of the $37.6m reverse has some business critics wondering: “How on earth could your final bottom line erode so badly from your business plan?” Particularly with rates and user-charges revenue jumping 11.5 per cent to $62m, and council cutbacks flagged earlier this year.

Two big reasons for QLDC’s red ink are highlighted here – spiralling debt and a ballooning wage bill.

Council boss Duncan Field also blames paper losses on property and forestry, plus an actual reduction in development contributions from the downturn. These total more than $25m, he says.

Field maintains the bottom-line loss is “a satisfactory financial result”.

Wages balloon

Payroll costs for QLDC and its quangos jumped $2.8m in the 08-09 council year – to $15.25m, more than one-fifth up on the previous year.

Staff directly employed by QLDC accounted for $1.1m of the increase, with quango staff costing $1.73m more.

Some of the extra QLDC dollars could be attributable to taking engineering staff back in-house – they were previously employed by a subsidiary – but some quangos, notably Lakes Leisure, are also known to have boosted staff numbers.

QLDC’s annual report doesn’t split out how much went on extra staff and how much on pay increases for existing employees.

QLDC boss Duncan Field wasn’t among those getting a raise – his total pay package dropped $12,530 to $280,936.

Debt rockets

The debt mountain of QLDC and its quangos grew by $31m in 08-09 – to $123,121,000.

The new total equals $6207 of debt for each of the 19,836 ratepaying properties (2007) in QLDC-land.
Interest costs ballooned to $8.2m – up 35 per cent.

QLDC admits “borrowings were around $18m more than expected”, mainly due to declining “development contributions” and “lack of progress” on redeveloping its old Queenstown Motor Park.

Under loan terms, $80m of the $123m debt mountain is scheduled to be repaid inside two years.

Since the cutoff for the 08-09 fiscal year – from which these figures are drawn – QLDC has also announced it’s raised $30m from large financial institutions in a virgin bond issue.

Rates/User Charges

QLDC and its “subsidiaries”, as it calls them, raked in $62m in rates and user charges during 08-09 – up 11.5 per cent on the previous year.

The increase is the combined effect of a rates hike, plus new “targeted rates” such as the per-household Alpine Aqua­­land charge – together with new properties coming into the rating net as they’re completed.

User charges do not include $5m garnered by quango Queenstown Air­­­­port Corporation from landing fees.

Vehicles

QLDC and quangos shelled out $590,000 on “motor vehicles” during 08-09, adding 39 per cent to the total value of its fleet during the financial year.

The annual report doesn’t specify vehicles bought so Mountain Scene asked QLDC money-man Stewart Burns for details.

About two-thirds of the cost was spent by the council itself, the remaining one-third by quango Lakes Leisure, Burns says.

LL spent $207,000 on an Izuzu truck, trailer and heavy rollers. QLDC spent half its $383,000 on setting up the new “in-house horticulture team”, with vehicles including utes, a tractor, trailers and something called a “gator”.

The balance was spent on QLDC funding half the cost of new fire brigades for Makarora and Luggate, the Fire Service funding the other half.