The Variable Estimates of the LGC
What confidence can citizens have in the cost and savings estimates published in the draft proposal?
The graph below shows how three estimates have changed considerably in the documents the LGC has published.
The LGC published documents in 2014, 2016 and 2017 in relation to reorganising local government in Wairarapa. Those documents showed the following information:
- the estimated IT costs to integrate the three councils IT systems into one
- the estimated financial benefits of amalgamation
- the transition costs (which comprise the IT costs plus other costs)
- 2014 $25.5m - based on the mid-point of estimate of $21m-$30m from a study conducted by Deloittes
- 2016 $10m - based on an estimate produced by the LGC working group
- 2017 $2.3m - based on a report produced by Morrison-Low February 2017 from quotes received from the supplier of the core system used by the councils (MagiQ)
- 2014 $6.5m - based on Table 37 of Supercity proposal document, $1.3m annual saving after year 4/5 - multiplied by 5 for 10 year figure
- 2016 $0m - from Table 8, page 15 the Morrison Low "Wairarapa Local Government - Assessment of Options - June 2016" report
- 2017 $10.1m - from page 14, para 62 "Draft Proposal for Wairarapa District Council - March 2017"
Transition Costs (less IT)
- 2014 $6.5m - based on Table 37 of Supercity proposal document, total transition costs $32m less $25.5m IT Costs gives $6.5m
- 2016 $13.3m - from page 51, section "4.9 Financial" in the Morrison Low "Wairarapa Local Government - Assessment of Options - June 2016" report, total transition costs $23.3m less $10m IT Costs gives $13.3m
- 2017 $18.7m - from page 14, Table 3 "Draft Proposal for Wairarapa District Council - March 2017" costs $21m less $2.3m IT Costs gives $18.7m
Note: A future blog post will examine the 2016 Consultation documents and detail the sources of the 2016 figures.