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City Council delays its public debate on rates increase of 9.2%

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The Wellington City Council was on Thursday due to be discussing a proposed rates increase of 9.2 per cent – the highest annual increase, by far, for many years. It has been told that an alternative increase of 7.9 per cent would not be enough to cover infrastructure needs. But the meeting has been postponed.

News from WCC
Wellington Mayor Andy Foster says the developing Covid-19 situation is behind his decision to postpone the 2020/21 Annual Plan meeting scheduled for Thursday (19th) to Thursday 2 April. The full Council meeting scheduled for Thursday 2 April will be rescheduled to Tuesday 14 April.

Mayor Foster told City Councillors tonight that the delay will allow the Council to consider the potential impacts of Covid-19 on the city and its economy.

“The Council is on a tight timeline to move through the process to adopt the final Annual Plan and set the rates by the end of June. Nevertheless, I have decided in consultation with the Chair of the Annual Plan/Long Term Plan Committee to adjust our planned decision-making process and take some extra time to consider the implications of COVID-19, the Government’s response and any possible mitigation, before approving the draft Annual Plan for consultation.”

Thursday’s meeting time will be used for an elected members’ closed workshop on the draft Annual Plan and the implications of the COVID-19 pandemic.

News from WCC – March 16
Resilience and transport are key focuses of the Wellington City Council’s draft 2020/21 Annual Plan consultation document which will be debated by the Mayor and Councillors this Thursday.

“This year’s draft plan seeks to address some of the big issues facing our city, while still providing core services and maintaining Wellington to ensure it remains a capital city fit for the future,” Mayor Andy Foster says.

The total proposed rates increase is 9.2 percent after growth in the ratepayer base. There is also an option for a 7.9 percent increase, but that would not address the additional infrastructure and planning that is required. The 2018/28 Long-term Plan signalled a rise of 7.1 percent.

The proposed rates increase is made up of 5.2 percent for day-to-day services, 0.9 percent for the Let’s Get Wellington Moving transport project and 3.1 percent for resilience related projects, which includes water infrastructure, Te Ngākau Civic Precinct, and advancing the work on the Central Library.

Mayor Foster says the Council needs to focus on addressing infrastructure issues. ”It’s clear through recent events with our water network, through our traffic congestion, and through our earthquake-damaged buildings that we need to take action now.

“It’s especially important that part of the rates rise this year will enable us to better investigate our pipe network, including detecting leaks, assessing the pipe conditions, and checking private connections.

“Te Ngākau Civic Precinct is the heart of the city. We need to plan well for its future and not delay the work that needs to be done to bring back the civic heart of our city.

“Usually we are able to deliver our day-to-day services with a 3 to 5 percent rates rise that takes into account depreciation and inflation,” Mayor Foster says.

“However this year, a revaluation of our core infrastructure has seen them increase in value, which has resulted in an increase in the depreciation costs that need to be funded from rates. It allows us to replace our assets in years to come. That is why the proposed increase in core services is 5.2 percent.

“We’ve done our best to minimise the rates rise by also setting an organisational savings target of $3.2 million, which will see the Council reduce its spending, and also change some fees and charges, such as building consent fees, to increase the Council’s revenue. We’re also proposing carrying more risk ourselves to reduce insurance costs, which can be significant.

“We’re also very conscious that COVID-19 will have an adverse economic impact on many businesses and households. Therefore I have asked the Chief Executive to explore all practical options for how the rates impact could be mitigated further and to report back with options in June, when we are scheduled to finalise the Annual Plan and strike the rates.”

The draft budget options and consultation document will be considered by Councillors at the Annual Plan and Long-term Plan Committee this Thursday.

The final recommendations, including the decision on the proposed rates increase, will be adopted by the full Council on 2 April.

The public will be able to have their say from 3 April to 10 May.

The final Annual Plan will be adopted on Wednesday 24 June.

27 comments:

  1. Hel, 16. March 2020, 18:32

    Seriously is this a joke because it is not funny! 9.2% rates increase after growth, whatever that means, this is just unacceptable.

     
  2. Traveller, 16. March 2020, 18:43

    Seems the worst possible time to expect people to be able to pay such a big increase in rates.

     
  3. Brendan, 16. March 2020, 19:06

    No it’s not Traveller because you’ll be able to stay at home self-isolating and saving enough money to pay your ridiculous rates bill for a Wellington’s new Conference Centre and Andy Foster’s Leadership Course.

     
  4. B. Dover, 16. March 2020, 19:27

    Pffft – only 9.2%? Meantime the city is falling apart around us. Must’ve been some decent vanity projects over the last few years.
    No accountability, just excuses and buck passing (from the ratepayers to the Council).

     
  5. Andrew, 16. March 2020, 19:37

    Just defer what ever needs doing WCC. It has not bothered you in the past.

     
  6. Punching Down, 16. March 2020, 20:04

    New mayor – same old rates rises. Time to cancel all the nice to haves: cycle lanes, rainbow coloured anything, re-naming stuff etc. Forging ahead with the conference centre now is the height of stupidity. Hard to see the world wanting to travel for a long time and we face a raft of bigger priorities.

     
  7. Northland, 17. March 2020, 7:21

    Someone needs to tell them that the world is about to enter recession, people are losing their jobs, markets are crashing and kiwisavers are evaporating. The public sector is going to have to reflect the new times. Cut back workforce and activities. No convention centre, no $30,000 trips to improve leadership. Do they live in a bubble!?!

     
  8. Don M, 17. March 2020, 7:22

    After the leadership course, Andy will now know that in this situation organisations and individuals re-prioritise to keep overall costs down. Oh, hang on, cost-plus organisations like Councils don’t have to do that.

     
  9. TrevorH, 17. March 2020, 8:34

    I have no difficulty with ramping up expenditure on water but this should be accommodated in large part by cutting unnecessary expenditures like the convention centre. LGWM has also proven to be a total waste of time and should be terminated – not another cent!

     
  10. Keith Flinders, 17. March 2020, 10:08

    As part of the process in standing for election to any council or local authority, a test of fiscal literacy must be introduced and those who fail be disqualified. Had such a test been in place prior to the last elections then the make up of the present WCC would be vastly different. More “fluff” than substance is what I see.

    The comment from Wellington Mayor Foster that core assets have been revalued and their increased depreciation costs must be factored into any rates rise, begs the question as to why the money collected for depreciation has not been used to maintain and update said assets to increase their value. The core assets have actually lost value due to lack of maintenance attention, whilst rates collected for depreciation have been squandered on vanity projects. That useless convention centre and its $200 million price tag for a start.

    As part of the belt tightening we are now being subject to there should be a review of what positions in the WCC enhance our enjoyment of our city, and those that have little or no value should be axed.

    A recent episode I was involved in with the WCC was to get a damaged light on a pedestrian crossing replaced, six months on from when it was hit by a truck and removed. Two months from the start of my involvement, with 30 email messages back and forth, plus a traffic management plan, the light was back in place just in time for Christmas albeit incomplete. Back when the Wellington M.E.D. looked after street lighting just one phone call would have seen a replacement street light installed and operational within 24 hours. And that efficient process should be the norm now.

     
  11. michael, 17. March 2020, 11:27

    If the council expects us to tighten our belts and fork out more money for them to waste on vanity projects like the $200 million convention centre, then they had better start by taking a good look at ways to cut back on their own indulgent expenses. Time to get back to basic responsibilities.

     
  12. Neil Douglas, 17. March 2020, 11:50

    Keith – Councils caught onto the idea of valuing or increasing the value of their assets so they can circumvent borrowing limits and persuade banks to lend at cheaper rates. Kapiti did this in 2013 by valuing the land under its roads at $300 million.

     
  13. judy siers, 17. March 2020, 17:07

    Well let’s give Andy a break. He’s prepared to do it and enhance his ability to lead the city. Not many of us would be up to the type of training he enrolled for. I was on the WCC with Andy many moons ago and leadership was not his greatest attribute. He will be a great Mayor given support, and I applaud him for trying to upskill where he needs it. Let’s be positive in this time of huge anxiety about our future. Take your rates and divide them by 365 and admit we rate-payers get a great deal per day in a wonderful place.

     
  14. Keith Flinders, 17. March 2020, 17:50

    Neil: In other words, creative accounting of the type that could be deemed to see the need for its authors to spend time in one of our incarceration facilities, if carried out by captains of private industry.

     
  15. Keith Flinders, 17. March 2020, 19:08

    Judy: Surely the issue is one of confining councillors to governance and employing people with the right skills to do the managing, not the other way around. Learning on the job in a business the size of the WCC would not be entertained in private industry. The fastest way to lose shareholders funds is to do what the WCC is doing.

    My earlier message about fiscal literacy:

    In the 10 years to 2019
    WCC rates have increased by 42.95%
    The single pension by 27.62%
    The average hourly wage by 24.47%
    The minimum hourly wage by 38.82%

    So therein lies the problem with many of those facing a rates hike of 9.5%, They still have to fund the extras for their children’s education, health care, dental care, and food, let alone rent or house maintenance.

    Cap rates increases to the same as pension or average hourly wage ones and avoid the confrontation with ratepayers.

    On the face of it those on the minimum wage have fared better, but we need to recognise the low base their figure started from and still isn’t enough.

    Massive rates increases whilst infrastructure maintenance and replacement was forsaken by the financing of less urgent facilities as well as frivolities. All this mis-management has become patently apparent since late 2019, although warned of over a decade ago.

     
  16. Northland, 17. March 2020, 22:24

    Keith – I agree, the Council rates should be tied to the average wage or better still the average income. They should be allowed to spend no more than this amount. With the Coronavirus outbreak, average incomes are going to plummet as people get laid off or their jobs shrunk to 3 or 4 day weeks.

    Judy – try telling taxi drivers, cafe workers or airline stewards who have lost their jobs that they should be happy to pay 9.2% more rates this year.

     
  17. Dave B, 17. March 2020, 23:48

    But of course rates have to rise. I WANT A CONVENTION CENTRE!
    (just kidding)

     
  18. michael, 18. March 2020, 0:00

    Judy we are now suffering because the council has been ignoring its basic responsibilities for years and been irresponsible in its spending. Andy Foster has been on the council for nearly 30 years and has been part of this mismanagement and the fact he needs upskilling to lead the council is concerning. I think councillors need to become more professional and start working together to trim their own budget before expecting us to continue shelling out more money. What is going to happen to those who just cannot afford it.

     
  19. Roy Kutel, 18. March 2020, 8:35

    Commissioners need to take over WCC and GWRC as would happen to a bankrupt business when liquidators are called in.

     
  20. Lockdown, 18. March 2020, 10:38

    The government has just announced a massive package to help save the New Zealand economy and the WCC are talking rates rises. They should be talking rate holidays or cuts. All non essential spending put on hold indefinitely.

     
  21. Ian Apperley, 18. March 2020, 14:54

    Yet another closed meeting. Also, remember that it won’t just be rates going up. You can expect to see significant rises in charges.

     
  22. Tony Jansen, 18. March 2020, 16:22

    Folks, it’s called “Disaster Capitalism” (read Naomi Klein). They know exactly what they are doing. As for Andy and his 28 years of service – if anyone knew the lack of investment and expenditure in our vital infrastructure, it was him. Does anyone recall Andy telling us that this was a cluster bomb waiting to happen? I don’t recall, but I do recall approval for the Convention Centre was unanimous, Andy included.

     
  23. Diane Calvert, 18. March 2020, 19:23

    Our economy, businesses and people need unprecedented support. The draft budget needs a serious re-think. [via twitter]

     
  24. Justin Lester, 18. March 2020, 23:03

    The proposed rates increase is a real disappointment. There was a promise to reduce rates and yet this is the highest increase in decades. One has to be prepared to make some hard and sometimes unpopular calls and, most importantly, bring ideas and leadership to the table. [via twitter]

     
  25. Chris Lynch, 18. March 2020, 23:11

    Several Christchurch City Councillors have written to Christchurch Mayor Lianne Dalziel calling for the next rates rise to be put on HOLD for 12 months – meaning the Council would operate with a zero percent rate increase. [via twitter]

     
  26. N.D., 19. March 2020, 7:43

    What hard and unpopular calls did the last Mayor make? Wasn’t one to proceed with the Conference Centre which was a highly unpopular call with me and most other hard-pressed rate-payers.

     
  27. James Gould, 30. March 2020, 15:30

    Will the WCC follow Dunedin’s lead and not only freeze rate increases but also take pay cuts through the period of the COVID crisis?