The report that Western Bay of Plenty District Council's finances are $14.78 million `in the black' has been greeted with disbelief by some ratepayers but Mayor Ross Paterson is standing by the figures.

'There is no way this is creative accounting,” says Ross in response to comments on the SunLive website.

Western Bay of Plenty Mayor Ross Paterson is standing by figures showing the Western Bay of Plenty Council is in surplus.

'I stand by the figures, which are reflected in the annual report and are being audited now. With any balance sheet people can have their own view.”

The surplus is $5million more than forecasted but Ross has reiterated it is not a cash surplus and the money has been spent on capital works. The surplus is the result of three years of tight fiscal policies which have included staff reductions, reduction in the use of consultants and savings on interest.

'We saved $2million two years ago, $1million last year and are looking to save $500,000 next year.”

Council had considered selling some of its properties to reduce debt but decided the losses would be too great in the current economic environment, Ross says.

Councillors will receive the full, audited financial report on September 26.

Katikati Ward Councillor Mike Williams says the true cash surplus is $300,000, which has gone into a reserve account.

'We did have a $2.3million reserve account but a lot of that was used in the last two to three years to cover interest costs.”

Council has managed to save around $500,000 in interest cost by joining the Local Government Funding Agency, Mike says.

The region's major capital projects such as water and waste water schemes are complete, putting it in a better position going forward as maintaining new infrastructure was less costly.

'Council has faced huge capital expenditure in the last 15 years but has now consolidated its position.”

Katikati Ward Councillor Norm Mayo has also welcomed the positive financial outcome but says he's not happy with the means by which it was achieved.

'Council has increased rates and the costs of its services at a time when people are struggling financially which I don't think is right.

'I am not in favour of the cost accounting method of achieving these results. Council has got a lot of farms and reserves it doesn't need which could be sold. We were promised a list of properties to consider for sale but we've never seen it.”

Norm says council could also have delayed tarsealing some roads to make savings.

'Being in the black is a good result but I'm not completely happy. It's a bit like going to town with a wallet full of cash, knowing you'll come home to a letter box full of bills.”

Te Puke ward councillor and former mayor Michael Pittar says council's finances needed to be in a better state.

'The debt is horrific so it's good to see council making some headway.”

He believes council was slow to respond to the looming world economic crisis in 2007, staff did not react until 2010.

'The annual plan has cut spending close to the bone but the concern for our district is we haven't got the rating base to pay for everything which needs to be done, and if we can't keep up the maintenance of roads and essential services, it will come back to bite us.

'The other concern is we didn't have a contingency fund to cover anything unexpected and although one per cent of the rates are being set aside in a fund now, if something major happens we'd be back in the red pretty quick.”

Kaimai Ward Councillor Don Thwaites says he was aware council was heading for a surplus.

'Council has taken a prudent approach to cut back some debt and we need to live within our means and not borrow a large amount for infrastructure ahead of time.”
Council also faced significant costs such as purchasing land for roading to meet projected growth at Omokoroa, which has now stalled.

'I am pleased with the result achieved but more capital works will probably be needed for storm water at Waihi Beach, Katikati, Omokoroa and Te Puke especially if the kind of weather events we have had continue.”