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Rates increase of 13.53% approved at marathon city council meeting

Report from RNZ
The Wellington City Council has finalised its budget for the next 10 years, proposing a rates increase next year of 13.53 percent, and an average increase of 5.77 percent over the next decade.

The marathon meeting lasted nearly the entire day.

The Long-Term Plan Committee meeting began with two hours of public submissions, followed by a number of amendments as councillors tried to force their own agendas through.

What was agreed upon will now go to the community for consultation, before it is then re-considered and adopted by council before 30 June.

Mayor Andy Foster has described the budget as the city’s most ambitious as the council reckons with some of the most pressing issues its ever faced: historical under-investment in water infrastructure; a severe housing shortage with escalating rents and prices; numerous public buildings closed due to poor resilience; and an ever-present climate crisis.

To fund its operational costs, the council is proposing a rates increase next year of 13.53 percent, and an average rates increase of 5.77 percent over the next 10 years. To pay for some of the capital expenditure, the borrowing limit would be scaled up from 175 percent to 225 percent.

The capital budget programme is set to exceed the previous Long Term Plan by $1.1 billion.

What is the money going towards?

Over the 10 years, this is where most of the money will be spent on:

$2.6 billion on three waters investment
$108 million on cycleways investment, including the Eastern Connections routes
$27 million will go towards a fully-funded Te Atakura implementation plan to help the city achieve its carbon emissions goals
$178.7 million on strengthening the Central Library

There are, however, other projects which the council still has no firm funding route for:

$163 million for sludge minimisation – Council is hoping to find an alternative funding source through the Infrastructure Funding and Financing Act, but if it is not possible, either the project won’t proceed, or an alternative Public Private Partnership would need to be considered
$1.4 billion for Let’s Get Wellington Moving: just $220 million of funding is included in the Long-Term Plan, but the final cost to the council could end up being six times that
$430 million investment in City Housing is needed, with the council hoping either government financial support, or the establishment of a Community Housing Provider, would get them there

A number of opportunities to raise money are being suggested, including divestment of the council’s assets, including its 33 percent stake in Wellington Airport, as well as its portfolio of ground leases.

Last-minute changes during the meeting

Some councillors added last-minute proposals to the budget.

That included the removal of a $75 million loan to the airport, the removal of which the airport has described as “mystifying”.

Councillor Fleur Fitzsimons also won support for her amendment to remove the proposal to partially privatise the Central Library. The decision to look to sell off the office space above the library was made in a meeting a fortnight ago, seen as a way to cut costs, by splitting the $180 million needed to strengthen the building with a private company.

Dropping the proposal will mean the council will exceed its debt-to-revenue ratio for the first two years of the plan.

During the meeting, the funding cuts to libraries’ collections budget was also reinstated, after that had been agreed upon two weeks ago.

Other amendments to go through included councillor Rebecca Matthews’ plan to have an extra $300,000 added into the Grants fund to enable non-council event organisers in Wellington to apply to be Living Wage events.

Predator Free Wellington will get their budget ramped up from $250,000 per year to $500,000.

Councillor Jill Day was successful in getting an extra $2 million for the first year, and then $3 million for the next nine years, to be added to the Māori and Mana Whenua Partnerships budget.

She said it would help the council effectively deliver its three programmes: He waka eke Noa Effectiveness for Māori framework, Te Taurapa Strategy, and Te Tauihu Te Re Māori Policy.

17 comments:

  1. TrevorH, 5. March 2021, 8:05

    Unbelievably irresponsible. Eighteen months till we get to clean out the stables.

     
  2. Bored Mostly, 5. March 2021, 8:44

    13.53 increase is seriously unaffordable – people have been impacted by COVID (many losing income and even jobs), sky-rocketing rents and now this. WCC councillors continue to live in la la land. Bring on some Independents at the next election.

     
  3. Citizen, 5. March 2021, 9:29

    Some of you will get a shock. Your rates increase will likely be much more because of the increase in valuations – 13.53% is not the rates increase for you, it is the increase in the rates take, that is that much more rates money to spend this coming year on Council ‘things’, some essential. And then there is the regional council rates.

    It’s no fault of yours that you live in your now highly valued house … is it?

     
  4. Kara, 5. March 2021, 9:53

    Even $220m for LGWM could be used elsewhere (except the airport) to lower the rates to a reasonable level.

     
  5. Ray Chung, 5. March 2021, 10:35

    Councillors with their own ideology agenda – Jill Day with an extra $5 million, Rebecca Matthews with an increase of $300,000 for some nebulous events! There are no doubt many more projects that ratepayers will have to pay for just to benefit the egos of these councillors. Not one gives a hoot for ratepayers. So Fleur, how about figuring out where the shortfall is going to come from?

     
  6. Concerned Wellingtonian, 5. March 2021, 11:34

    Citizen, the much-vaunted 5% for this year was, in fact, usually 6-7%. This had nothing to do with changes in valuations, it was more the false way that “only 5%” was put out by the Wellington City Council.

     
  7. Claire, 5. March 2021, 11:48

    Wow I am amazed. First the WCC votes to privatise part of the library building, then votes to not do that. Someone goes off and tells tales to the AG, who is not interested. Now we have a rates rise. Please WCC focus on the many ways to get this rise down. You have 1000 people, salaries, and bloat, a good place to start.
    Citizen: yes it will likely be higher as our properties have increased in value. WCC – You are not reading the city, people are not happy with that rise at all. Any extra spending is an insult.

     
  8. Mike Mellor, 5. March 2021, 13:02

    Citizen/Claire: the changes in valuation don’t in themselves increase the rates take, just the distribution of who pays. If your property has increased in value by more than the city’s average, you will be paying a greater share; it its value has increased less than the average, the share you pay will be less.

    So “Your rates increase will likely be much more [than the proposed 13.53%] because of the increase in valuations” is not the case – it will be just as likely to be much less.

     
  9. Ray Chung, 7. March 2021, 12:01

    Not a single councillor has looked at the budget to see what can be trimmed, and only Andy Foster has made suggestions on how spending could be cut to reduce the increase.
    When the plan goes for “public consultation,” will this be a genuine consultation or just lip service?

     
  10. Kara, 7. March 2021, 17:33

    Ray, how do you know that “not a single councillor” has looked at the budget to see what can be trimmed. All councillors work hard to make sure they understand what they are voting about.

     
  11. Concerned Wellingtonian, 7. March 2021, 19:17

    Kara, I can vouch for Ray’s statement about councillors. You only have to look at the resolutions they passed ten days ago and see that these were totally ignored last Thursday to see that they are not interested. Ray is right.

     
  12. Ray Chung, 7. March 2021, 20:14

    Hi Kara, have you seen any councillors suggest where savings can be made? Have you looked at how many vanity projects have been added to the budget despite the huge 13.65% rate increase? I’ve spoken to councillors numerous times about the council budget and they’ve come back to say they only employ one person in the council, the CEO, so they can only ask her to look for savings. Council officials said they had $50 million to spend on installing water meters but this has never been discussed or presented so where did this money come from and how many of these jam jars are there in the council budget? I disagree that all councillors work hard to understand what they’re voting about. Some vote solely according to their ideology and don’t even read the briefing notes.

     
  13. Mike Mellor, 7. March 2021, 20:38

    The statement that “not a single councillor has looked at the budget to see what can be trimmed” looks to be a personal opinion rather than a statement of fact, because there is no way that anybody could know how every individual councillor looked at every item; and it is appears to be an opinion that is not supported by the facts, since a majority of councillors must have looked at the budget in that way in order to vote to remove at least one item, the $75m for the airport.

     
  14. Northland, 7. March 2021, 22:59

    Kara and Mike – I wish the Councillors would work hard to actually bring the budget under control. From the outside it looks like none of them are too concerned that ratepayers will have to fork out for the extra millions in spending. Have they discussed downsizing the staff footprint? Have they discussed pay cuts (esp the senior exec team)? Not good enough.

     
  15. Kara, 8. March 2021, 11:04

    My suggestions for bringing the budget under control:-
    1. ditch the expenditure on LGWM
    2. sell the convention centre to any private companies

    The funding freed up would not only allow rates to be lowered but also maintain our public libraries.

     
  16. Hel, 8. March 2021, 17:40

    What is needed is a good hard look at the bloated people budgets at Council. Reduce the size of the senior management, the PR machine and middle management. The fat and inefficiency in this organisation shouldn’t take too long to identify, but as the old saying goes turkeys don’t vote for Xmas.

     
  17. Toni, 3. April 2021, 9:58

    There is something seriously wrong in NZ when councils (and now power companies) can go years without maintaining their infrastructure and then, without any consequences, are able to hike up costs and charge the consumers to fix this problem. This situation is untenable.