The rate rises would increase the average rates bill by $260 and is likely to cause rents to rise by at least $5 a week. It comes at a time when households are having to cut costs as the living cost crisis deepens.
The Northern Advocate has the story:
Ratepayers across Northland are facing big rates rises as all four territorial local authorities are planning hikes of between 5.3 per cent and 11.4 per cent as the cost of living crisis deepens.
Northland Regional Council (NRC) is topping the bill, proposing an increase of as much as 11.4 per cent.
Whangārei District Council (WDC) comes next with an up to 10.9 per cent increase. Far North District Council (FNDC) is proposing an 8.63 per cent lift and Kaipara District Council (KDC) 5.34 per cent.
Kaipara Mayor Craig Jepson said,
“I am confident that, if anything, we will be going lower than that 5.34 per cent,”…He said he had campaigned on prudent council management and keeping costs down when he became mayor – as the council and its community headed into the difficult financial times ahead. The council’s draft 5.34 per cent proposed increase was a manifestation of this.”
The other councils in Northland need to follow Kaipara’s lead.
The WDC says, “We’ve found cost savings (around $640,000) and reprioritised work where we can. Councillors have issued a clear directive to find further efficiencies wherever possible throughout the coming year.”
$640,000 is petty cash on annual spending of $321 million!
Clearly, the council has not looked hard enough or had the wrong people looking!
To reduce the rate hike the Council could do two things. It could either cut costs from its $200m operating budget and/or defer some of the projects on its $121m capital spending programme for 2024.
Deferring capital spending delays the cost rather than reduces it but nevertheless does shift the rating burden into the future when economic conditions may be more favourable.
The point here is councillors are required to make a choice between starting the project now or later (or not at all).
So where can savings be made?
Operating costs
The WDC’s operating costs for 2024 are forecast to be $200m (numbers are rounded for simplicity). The main cost areas are:
• $59 million for asset replacement due to wear and tear (depreciation).
• $36 million employee costs.
• $12 million on finance (interest) costs, and
• $93 million for “Other” expenses.
The “Other” costs have not been detailed in the 2024 Draft Annual Plan but based on the Council’s annual reports a substantial part of the will be the cost of hiring contractors and consultants (to do what is not disclosed), community grants, and “other”.
Presumably within the “other” Other expenses there are a large number of minor expenses, like the annual membership cost of being a part of Local Government New Zealand (which is believed to be around $80,000 a year).
Only council staff, and presumably councillors, have the detail necessary to undertake the review.
Capital costs
The total capital spending budget is around $120 million in 2024. Transport is the largest cost area at around $49 million. The big-ticket items are:
• Repairs and resurfacing sealed roads $10m
• Kamo and Raumanga shared path extension $8.2m
• Waka Kotahi low-cost-low-risk projects $7.2m
• CBD bike and public transport facilities $4m
• Whangarei City Centre Plan implementation $3.8m
• Metaling unsealed roads $2.5m
• Springs flat roundabout $2.5m
• Cycleways $2.3m
It explains the cycleways and share path projects as follows: “The final stage of the Kamo Shared Path is planned, which will take the path right through to Kamo Village. We also have plans for new cycleways in Bream Bay (Waipu to Waipu Cove) and connections through the City Centre. We’re also planning a new Tikipunga Shared Path to connect Tikipunga, Otangarei, Kensington, and the AH Reed Memorial Park with the central city.”
About the City Centre Plan it says, “We are continuing with investigation and design work to connect the waterfront and city centre through shared spaces, cycle connectivity, more pedestrian spaces, seating, lighting, native planting and water quality treatment as part of upgrades to John Street and surrounds. Alongside this, investigation, design, access, engagement, and consenting work will continue on connecting the Pocket Park along Waiarohia River, across Reyburn bridge, and back down the river to Hihiaua Cultural Centre and the Hātea Loop, while also improving stormwater quality outcomes.”
Community development and Civil Defence projects account for $10 million, including:
• Improvements/repairs to community buildings (details are not specified) $6m
• Replace Tsunami sirens $1.9m
“Community Planning” costs include:
• $1.6m goes to “Improve community wellbeing and placemaking”.
• $1.5m has been allocated to what is called the “Blue/Green Network”. The WDC says the purpose of the scheme is to address the “disconnect between humans and nature that has arisen since the industrial age”.
• $760,000 has been allocated for new pensioner housing.
Parks and recreation has been allocated $8.5m, including:
• Refreshing existing sport and recreation facilities $2m
• Refreshing Neighbourhood & Public Gardens $1.5m
• Developing new sport and recreation facilities $1.1m
$11.4 million has been allocated to reroof the Northland Events Centre stadium. They say “The stadium roof has reached the end of its life and will be replaced with a permanent structure that provides for more useable upper level spaces in both summer and winter.”
There is $700,000 to evaluate the new airport site. It says this is “In order to inform a feasibility study for a new airport in Whangārei District, investigation work will continue into the suitability of a site at Ruatangata.”
There is $5.14m for a new dog pound.
The amount of additional support for the Hundertwasser Art Gallery is not specified in the plan.
These are all items that presumably have been reviewed by councillors, or council staff, and are considered more important than the alternative, which is to make rates more affordable.
To bring the rates increase down to a level comparable with Kaipara, some $6 million would need to be cut from the $321 million spending. That would reduce the rate increase from 10.9% to 5.9%.
So what could councillors cut?
There are some obvious areas for saving.
Shelving the feasibility study into the new airport would be a good place to start. It’s hardly urgent. That’s $700,000 on just one item.
Exiting Local Government NZ would save another $80,000, and there are certain to be many more savings to be made within the “other” spending category.
Other possibilities could include giving less priority to “unlocking Tikipunga as a growth node” or reviewing the timetable for the Kamo Shared Path, the new cycleways in Bream Bay, or the Shared Path to connect Tikipunga, Otangarei, Kensington, and the AH Reed Memorial Park with the central city.
Or deferring “the investigation and design work to connect the waterfront and city centre through shared spaces, cycle connectivity, more pedestrian spaces, seating, lighting, native planting and water quality treatment as part of upgrades to John Street and surrounds.”
Without having the detail behind the figures, it is unreasonable to expect the public to be specific about the arrears to cut.
However, the public can be specific about what an acceptable rate increase would be. It is then for councillors, using the detailed information they have at their disposal, to prioritise their spending to fit within the rate increase cap. After all, that is their role as our elected representatives.
Submissions close on 05 May 2023, 04:30 PM
INFORMATION
The 2024 Draft Annual Plan >>>
WDC Submission form and further information >>>
HAVE YOUR SAY MEETINGS
Ruakākā Recreation Centre, 17 April 2023, 06:30 PM
Forum North, 19 April 2023, 05:30 PM
Ngunguru Hall, 26 April 2023, 06:30 PM
Online webinar, 27 April at 7pm on Facebook.com/WhangareiDC
