Analyst puts WDC on 'red alert'

The Whangarei District Council is facing a financial "tsunami" but does not seem interested in sheltering from the storm, a local government expert says.

Finance and policy analyst Larry Mitchell said the council was financially unsustainable and drastic changes were required to balance the books.

However, the council rejected Mr Mitchell's reading of the figures saying a better assessment of the council's financial position was the AA-credit rating given by Standard and Poor's.

Mr Mitchell has released a copy of his Local Government League Table to the Northern Advocate - a report ranking New Zealand's councils based on their published 2011 financial information.

Rating councils on measures of sustainability and affordability, Mr Mitchell's league table ranks the Whangarei District Council 62 out of 67 councils, just three places in front of its struggling neighbour the Kaipara District Council.

The WDC performed particularly badly on sustainability measures such as debt per ratepayer, surplus/deficit and debt servicing to rates.

Mr Mitchell said if the patterns did not change in the coming years, the council would find itself in deep trouble.

"Whangarei should be on red alert, the tsunami sirens should be going off because there's a tsunami coming."

Mr Mitchell sold his league table and financial consultancy to councils but many, including the WDC, were not interested in listening to his warnings.

"They don't like these league tables. They're using every tactic under the sun to discredit them, but someone's got to say this because we do have the Kaiparas and the Waitomos and California has got Stockton."

Stockton is a city council that has recently filed for bankruptcy because of its overwhelming debts.

WDC group manager support services Alan Adcock said the council had previously subscribed to Mr Mitchell's reports but had decided against it because of "inherent flaws in the approach taken".

Mr Adcock said the AA- credit rating given recently by Standard and Poor's was a more "robust and credible approach".

"We believe WDC is in a perfectly sound financial position, and with the recent adoption of our Long Term Plan, which has been given an unqualified opinion by AuditNZ, we are well placed for the future."