I have been asked for guidance on making submissions on the Whangarei District Council's Long Term Plan. The process will be similar for other councils around New Zealand.
The long term plan lays out, among others things, Council’s intentions regarding rates and spending. It is proposing to increase its rate take from $65m today to $119m in 10 years. To the average householder paying $1,500 in rates, that means they will be paying close to $3,000 in 10 years time - and a renter about $30 a week more in rent. The increases average out at an annual rate of 6.3%, or about three times the rate of inflation.
The proposed rate increase has nothing to do with repaying council’s high debt, which will remain at $160m. It's all about spending more.
To put the council’s current predicament into content, the Peter’s council of 2004-07 lost control of their finances (it did not even have a Finance Committee!) and went on a reckless debt-funded spending binge to the point of breaching it’s own debt policy limits. Since 2007, successive councils have contained debt by selling investment assets to fund capital spending and by operating deficits. The new council does not have spare ?debt nor does it have a large number of investment properties to sell so is turning to ratepayers to pick up the bill.
There are volumes of detailed financial costs and policies that sit behind the fancy words, smiley faces and trite references to low-cost grocery items in the Long Term Plan. These reports are available from the Council's website but you need to go digging to find them and have a lot of free time to read them.
Here are some of the more important figures from the financial reports:
- Rate income (excluding water) is expected to rise 83% from $65m this year to $119m in 10 years.
- Total operating expenses will increase 36% from $122m to $165m.
- That means rates will rise at more than twice the rate of council’s operating expenses (83% vs 36%), so less than half of the proposed rate increase is to fund increases in operating costs.
- The current year operating deficit is $2.9m. In 10 years time it will be a surplus of $22.5m.
- Spending on capital projects over the next 10 years is expected to total $560m. About $120m will be funded from the proposed rate increases.
- $28m on council support services including $10m on new council premises, $4m on council vehicles, and $6m on a new council computer system.
- $12m on a new theatre and $2m on the Northland Events Centre.
- $57m on parks, including $20m on sports fields and $12m for a "sense of place".
- $4.5m on pensioner housing.
- $4.7m on cycleways.
- Limit annual rate increases to no more than 3% (not 6.3%), and
- Cut $5m a year from its $122m operating budget (something it could do without great difficulty in my view), and
- Cut back capital spending by $30m (out of $560m) over the ten years (cutting out the new council offices and the theatre alone would save $22m!).
If you don't speak up now, you will have no say at all and only yourself to blame when your rates bill is double what it is today or your rent is $30 more a week than it is now.
Submissions must be in writing but do not need to be in any set format - just include your contact details and make it clear you are making a submission to the Long Term Plan. If you want to speak to councillors about your submission then state that also. Submissions can be emailed to firstname.lastname@example.org or dropped in to the Council at Forum North.
Remember, submissions must be in no later than this Friday!