Plans to cut emergency fund
Emergency reserves proved to be a valuable backup over the past two years, as floods and earthquakes caused havoc across the Marlborough region.
But despite the devastation caused by extreme weather and natural disasters, the Marlborough District Council is planning drastic cuts to the region’s emergency events reserve in its 10-year longterm plan.
The council is proposing to cut its emergency events reserve from just under $6 million in the 2018-19 financial year to just over $2m in 2024-25 before increasing it to $4.79m in 2027-28.
Ra¯ rangi Civil Defence Group coordinator Glenys Scott said the proposed cuts were ‘‘worrying’’.
‘‘Given the increasing number of events we’ve been having and we’re going to continue having as a result of climate change and other things it does seem worrying. I can’t understand why they would be doing that.
‘‘You do feel quite vulnerable here [in Ra¯ rangi] so any cutbacks of course is going to worry us,’’ Scott said.
The cuts also came as a ‘‘surprise’’ to councillor Laressa Shenfield, who was on the longterm plan working group last year and adopted a recommendation contrary to the draft plan.
‘‘There are recommendations to the long-term plan working group around the item of which one of them was to agree to increase the
‘‘You do feel quite vulnerable here [in Ra¯ rangi] so any cutbacks of course is going to worry us.’’ Glenys Scott Ra¯rangi Civil Defence Group co-ordinator
total value of the disaster recovery reserves to approximately $30m over the period covered by the long-term plan.
‘‘So you can understand my surprise when the reserves balance at the end of the long-term plan being just above $4.5m,’’ Shenfield said.
Shenfield said she was concerned about the ‘‘disconnect’’ between the draft long-term plan and the recommendation by the working group.
She was also surprised at the proposal due to the importance of the reserve.
‘‘We know as a council we’ve really had to rely on that reserve over the last couple of years or more. On the back of our earthquake repairs, we’ve had storm surges and storm events that have created issues.
‘‘Now potentially there are some really good reasons why that’s occurred. But I just felt as though it was a surprise to see the reserve itself, come the end of the long-term plan, was at a such a low level,’’ she said.
A Marlborough District Council spokesperson said the emergency events reserve worked alongside the Local Authority Protection Programme (LAPP) which was a local authority insurance scheme.
‘‘Council insures some of the regional infrastructure and river control works through a local government insurance scheme (LAPP), supplemented by some commercial insurance. The uninsurable asset components are covered by council’s emergency reserve funds,’’ the spokesperson said.
The draft long-term plan stated that work was undertaken last year with the treasury, insurers and engineering consultants to come up with ‘‘maximum probable loss predictions’’ with a loss funding plan.
That work determined the recommendation which set out the reserve balances for the next 10 years, the report said.
Shenfield said one of the sources of funding for the reserve was the council’s interest rate, which was reduced to 5.5 per cent in the draft long-term plan from the previous 6 per cent.
‘‘The comment was made during the council meeting [last week] about what the funding source would be and I’m sure the ratepayers wouldn’t want to be rated for it but I think the council really needs to think about some of our other income streams and prioritising where we put our money.
‘‘There are obviously decisions that have to be made about the emergency events reserve and how much we keep in balance knowing what might be around the corner when we’re seeing more and more requirements on the reserve to deal with damage,’’ Shenfield said.
In the 2017-18 financial year, the emergency events reserve has been utilised for numerous projects which included $4.09m for strengthening the Marlborough Lines Stadium 2000.
Roading flood damage repairs of $1.23m would also be covered by the emergency reserve.