Len Brown backtracks on rates rise promise
Auckland’s overall rates bill is set to rise by 3.5 per cent every year for the next 10 years.
Auckland Council voted 16-7 on Wednesday in favour of the rise which will head out for public consultation in January. The move was a backtrack for mayor Len Brown on the proposal he put forward last week.
After this week’s discussions he says he could not see a scenario that allows the rates to be kept below a 3.5 per cent annual increase over the 10 years of the Long Term Plan.
His original plan was to keep rates in the 2015/16 year to a 2.5 per cent overall increase and a 3.5 per cent increase over the following nine years of the plan.
‘‘The 2.5 per cent I’m proposing does not match up with what the community wants. I’ll take that on the chin and I’ll be out explaining why we have to start at 3.5 per cent.’’
A report by financial planning and strategy manager Ross Tucker says contractual commitments mean there is less flexibility to reduce capital expenditure than was expected when the mayor tabled his proposal.
This has resulted in a $14 million increase in operational costs and if the 2.5 per cent rise was retained then a larger than planned increase would be required in the 2016/17 year.
As well as higher rates than initially planned, a last-minute change was made to the Long Term Plan funding proposal by chief executive Stephen Town.
Development contributions are now proposed to increase in line with inflation every year and the council will add a $20m increase to the funds they plan to gain from the sale of ‘‘non-strategic surplus assets’’.
The extra money gained will also go towards paying for priority parks, community and lifestyle projects which total $790m over the next 10 years.
Under this decision the net debt of the council group, including CCOs such as Watercare and Auckland Transport, is expected to hit $11 billion by 2025.
Councillor Christine Fletcher called out the mayor for his ‘‘lack of leadership’’.
She questioned why the councillors had been through six months of ‘‘private meetings’’ only to be informed at the last minute that the situation is not what they had been told.
Councillor Cameron Brewer says the extra funding can be found internally without raising the rates beyond 2.5 per cent next year.
‘‘We can look into our $3b, 12,000 staff organisation and find cuts.’’
Brewer tried to push through an amendment to carry on with the original plan of a 2.5 per cent next year but was voted down 16 votes to seven.
Brown says he agreed with the sentiment of the amendment but it would not practical at the moment.
The council also agreed to raise the cost of water and wastewater by 2.5 per cent for the first two years of the Long Term Plan and 3.6 per cent for the remaining eight years. The plan’s budget will go out for consultation on January 23 and be formally adopted on June 25.
Rates rise: Len Brown will ‘‘take it on the chin’’.