In their LTCC plan, CHBDC will defer renewal and maintainence work until after 2019. However, after rates have been struck and any of this work becomes urgent, it will be funded from the depreciation of assets process. What happens, if that depreciation finance isn't in a reserve fund when those assets require them ? For example, I believe CHBDC's vehicles have a five year depreciation duration. Depending on when that is, for what they have now, they could require a renewal twice before 2019. Many more plant components will have similar replacement time tables and depreciation. If there is another miscalculation in council's expenditure budget due to some 100 year old use by date,core facilities etc. and they have used up depreciation and reserve funds, with overall debt expected to be $18million plus by 2019, with replacements overdue?

Haven't we been in this situation before when CHBDC's owned Central Hawkes Bay Works operational funding was used ? The result of this being, we became minor shareholders in INFRACON,and the $1million payment, as part of that deal, did not go into reserves as explained it would. If my information is correct, Central Government has recognised how often district councils find themselves in similar positions and as part of the resorce process to build new plant councils now have to have renewal reserves.

What is the current situation with our shareholding in INFRACON ? From the work INFRACON now contracts for considerable capital investments have been required. With the current economic downturn and council's deferring everything but essential repairs and maintainence work, what exposure do we have if there are liquidity problems ? At a time when a dividend on that shareholding would be most welcome, the only reference I can find in Council's LTCC plan are that those shares are a strategic asset !