Tuesday, March 12, 2013

WELLINGTON CITY COUNCIL AND FOG

This morning our current CEO suggested Wellington City Council has a lazy balance sheet. That caused me to reflect on the state of our books. 

Our Closing Gross Borrowing for 2013/14 is $397,513,000.00
Our total liabilities 2013/14 are $539,272,000.00

We have revenue from rates of 2013/14 $233,567,000.00
Other income brings our 2013/14 revenue up to $420,262,000

Our total expense 2013/14 is $388,242,000.00

Wellington City Council has a borrowing target of of 105 percent of operating income.

For a household that might work as long as income holds up but if there is a loss of income then it spells disaster. It's called debt based economics. Don't kid yourself Council is in trouble like all economies that are debt based.
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