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City Council increasing spending and borrowing; concern about “rating affordability”

News from WCC
Wellington City Councillors met yesterday to agree on the city’s direction for the next 10 years. Mayor Andy Foster put forward a draft budget for the Council’s consideration.

“The decisions we make on what to include in the draft budget and what to leave out are still subject to final approval,” said Mayor Foster.

“The budget outlines what we will be investing in, how much it may cost and how this will be funded. It is a budget for infrastructure and resilience and strikes the balance between what we have to do, rating affordability and a debt level that leaves headroom for both expected and unexpected future challenges.

“It provides guidance on how we will make Wellington an even better place to live, work, play and visit as we go into the future.”

A draft consultation document will be provided to the Annual Plan/Long-term Plan Committee meeting on 4 March. Councillors will give final approval to this draft document, which will then go out for public consultation in April before a final plan is adopted in June.

The key decisions made at yesterday’s meeting include:

· A significant uplift in capital spending – directed to infrastructure including for three waters.

· Setting the Council’s debt to revenue ratio limit at 225%

· Exploration of new funding mechanisms for city housing, the central library and sewerage sludge investment.

Councillors agreed to reduce the library budget for new physical items for years one and two. This will not reduce the current collection size, or the budget for buying new digital items.

They also voted to enable partnering for commercial space in the Central Library. This would see the costs for remediating the Central Library condensed into years three and four, by agreeing to make milestone payments to the developer who the Council engages to carry out the remediation work. This would allow the Council to stay within a responsible debt level while still rebuilding the library in the preferred timeframe.

Key dates:

4 March – Annual Plan/Long-term Plan Committee meeting:

· Consultation document to approve.
· Agreement to consult.
· Approval of budgets

30 March – Annual Plan/Long-term Plan Committee Meeting:

· Draft consultation document approved.

April – Public consultation

30 June – The Long-term Plan 2021-31 is adopted.

Minutes of yesterday’s meeting

10 comments:

  1. Ray Chung, 19. February 2021, 21:43

    There’s so much publicity about the huge blowout of council budgets and a concerted effort by Mayor Andy Foster making a list of 11 last minute proposed budget changes to try to balance the books and I have to give him full credit for this. However, I hold in complete disdain the councillors who continue to act as if they have the money tree growing in their garden. There was a successful motion to include an extra $45 million for cycleways and amendments for $3.8 million for climate change initiatives and $2 million for a resource recovery park (what the heck is this anyway?) Do lets identify all the councillors who voted for these so we know what they stand for at next year’s election. Really, what part of trying to save money don’t they understand?

     
  2. TrevorH, 20. February 2021, 8:10

    Wellington has become the most expensive city to rent. Further increases in rates will be passed on to renters. Do Councillors consider the consequences when they insist on adding their pet projects on behalf of some pressure group to the budget?

     
  3. Rainbow Lorikeet, 20. February 2021, 8:22

    Spot on Ray. In a dystopian future, having run out of money again, Mayor Fitzsimons proposes raising the debt cap to 500 with a 100% rates increase. Councillors Morgan and Dyer immediately propose and second an amendment to re-seal the cycleway network with gold nuggets. The annual car crushing festival in civic square has its budget increased along with the tumbleweed removal team for the golden mile. Working with her central government colleagues, the mayor agrees to house WINZ clients in the derelict David Jones building. Having taken the novel approach of daylighting the sewer network to prevent pipe breakages, deputy mayor Matthews proposes marketing the city as the Venice of the South Pacific and funding an e-gondola trial.

     
  4. Harold Rodd, 20. February 2021, 8:49

    In answer to Ray Chung the Councillors who voted “to include an extra $45 million for cycleways were Condie, Day, Fitzsimons, Foon, Free, Matthews, O’Neill, Pannett, Paul and Sparrow.

     
  5. Claire, 20. February 2021, 9:32

    Councillors should understand we need austerity for a few years.
    Auckland’s mayor has announced a 5% rates rise. He has been through and done reviews; ie the new Watercare guy does not now get paid $750,000.
    Our suggested rates increase will be the highest in Nz. We need to get it below 10%.

     
  6. Bruce, 20. February 2021, 10:05

    The three Labour councillors and Tamatha Paul appear to have supported every amendment to increase spending, and voted against every amendment to reduce costs. The view seems to be that borrowing should just be extended even further than planned, which seems incredible in a year when rates are projected to rise by at least 14%. I’m not really clear what (if anything) they were prepared to compromise on.

    Andy Foster doesn’t get a pass though, as a champion of the Convention Centre, the biggest white elephant since Sesqui 1990. Sell it (if anyone wants it) or move the Library there.

     
  7. Bing Bang Bong, 20. February 2021, 19:01

    It’s mildly amusing to see some of the loudest proponents of the council taking on more debt also claiming that they can’t afford a house or that housing is unaffordable. To them I say, borrow more, there’s never been a better time to take on debt (apparently).

     
  8. Ray Chung, 20. February 2021, 20:44

    Thanks for these names Harold, I sincerely hope that ratepayers take note of these names when election time rolls around next year! I consider it the height of irresponsibility to be in council and make claims that they’re there for the ratepayers.

     
  9. TrevorH, 23. February 2021, 12:25

    Here’s an excellent account of how the City Council ignored basic principles of financial management to bring about the three waters crisis Wellington faces, which they expect us to pay for twice to fix.

     
  10. michael, 23. February 2021, 12:50

    @TrevorH: Lets not forget our current Mayor has been on council for 30 years!

     

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