Len Brown back­tracks on rates rise prom­ise

Auckland City Harbour News - - NEWS - By JAMES IRE­LAND

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.

Photo: DAVID WHITE

Rates rise: Len Brown will ‘‘take it on the chin’’.

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