Then, now, and into the future

I commented recently that there appeared to be little interest in the local body elections. That changed with the arrival of a team waging a serious challenge to the Whangarei District Council (WDC) with a full slate of candidates and a high profile campaign.

Among their policies is a nil rates increase, which is likely to create interest given rates is emerging as an election issue, and a common complaint about the current council. To see how justified those complaints are, I compared the rates a householder was paying immediately before the current council was elected, to what they pay now – last week in fact, when the first rates instalment was due.

I then looked at the council’s projections to see how much that same householder will be paying in three years time should all of the existing councillors and the mayor be re-elected. Here are the results.

Then and now

General rates – Three years ago the general rate take was $40.5 million. Now its $47.7m – up 18%. Then, a typical household in Whangarei was paying around $1,800 in rates; today that same property owner is paying $2,100.

WDC debt position – Three years ago debt from external sources was $156m. Now it’s $152m, but total debt (including money borrowed from reserve funding) has gone from $180m to $190m. In other words, total debt has gone up because the council has used money held in reserve for other purposes to fund its activities. At some stage that reserve must be repaid, so it is treated as a debt obligation – it cannot be ignored as some councillors would have you believe.

The bottom line is council has had more money to spend because rates have increased much faster than the rate of inflation, but it has borrowed more too.

Now and into the future

So looking ahead three years, what is the council projecting – assuming they are all re-elected on the 8th of October?

They are planning to increase general rates 20% from $47.7m to $57.1m. That means the householder paying $2,100 today will be paying $2,500 in three years time.

On debt, they expect external debt to increase from $154m to $170m, up 10%. (Internal debt projections from reserves were not detailed, but there is every likelihood the council will continue to sell investment property and borrow those funds instead of reinvesting the money as is stated in the council’s property policy.)

Although the current council has done some good things (the Hatea Loop is very good and will only get better) in my view it has pretty much failed in every other area. There are some councillors that have genuine intentions and good ideas, but as a whole, the council has appeared indecisive and muddled (the tortuous stop-start, yes-no-maybe, process regarding the Hundertwasser is an example).

What it has done has also come at a high cost – much higher rates and higher debt, which is unfortunate given our district has one of the lowest household incomes in New Zealand. One would hope that our politicians would have acknowledged that and responded by having one of the lowest rate charges in the country also.

I accept the WDC is confronted with difficult decisions – and the spendthrift nature of previous councils (which included many sitting councillors) has not made their task an easy one. It’s for that very reason that having decisive leadership based on clearly expressed priorities is so important.

There has also been little regard to the economy. By way of comparison, in the last year the council spent some $3m on “economic growth”, but $16m on “planning and regulation” – which is a handbrake on economic growth. (The $3m was probably mostly on staging events in our district – like the Motor Rally – rather than on creating long-term economic wealth.)

Spending $5.30 on planning for every $1 on economic growth is an indictment on the council’s priorities. Unfortunately, it has been all too happy to milk commercial ratepayers without giving much in return. But even worse than that, by failing to revitalise the economy they are doing absolutely nothing to create employment opportunities for a significant section of our community.