$100m spend-up to push up rates bills
Homeowners in Lower Hutt will face a rates increase of an average 5.1 per cent and in poorer areas the hike could be well above that.
Hutt City councillors agreed at a meeting on Tuesday to spend $100 million on projects and allow debt to rise as high as $235m - but the expenditure will see homeowners’ rates rise.
The councillors grappled for 10 hours with their draft annual plan, which will soon go out for public consultation.
They abandoned a long-running financial strategy that had capped debt for more than a decade at no more than $125m.
The new strategy will cap debt at 150 per cent of total revenue and use it to finance major projects. The council’s total budgeted revenue for 2017 is $155m.
Mayor Ray Wallace emphasised the need to rejuvenate the city, as politicians ticked off more than $100m in spending.
The expenditure will have some unintended consequences.
Although the average rates increase for residential ratepayers was set at 2.3 per cent, the news is in fact much worse.
Changes to the business differential (the percentage of rates paid by businesses) and the recent revaluation of residential properties had a major impact.
The amount of rates paid by businesses declines on average, by between .06 per cent and 8.8 per cent.
With residential ratepayers having to meet the difference, residential rates increase by an average of 5.1 per cent.
Poorer areas like Taita, Naenae and Wainuiomata, where residential valuations increased significantly more than average, face increases well in excess of 5.1 per cent.
Ironically, the big winner was the city’s largest ratepayer, Queensgate.
Business rates in the central city decline, on average, by 8.8 per cent.
Wallace began the meeting by telling councillors the city was ‘‘tired’’ and after years of financial restraint, the time had come to invest in rejuvenation.
The council had begun that process with the new Events Centre, the Town Hall upgrade and the Stokes Valley Hub.
It was now time to look at projects like the $39m Hutt River Promenade that would transform the central city.
He urged his colleagues to ignore the ‘‘nice to haves’’ and instead concentrate on projects that would drive growth.
Ten hours later the list included funding for the living wage for council staff, new roofs for the Dowse Museum and Petone Library, an extra $3.7m for the Events Centre, more than $10m to refurbish wharves, $12.2m for sports hubs and $39m for the river promenade.
A frustrated Cr Lisa Bridson accused her colleagues of living in ‘‘la la land’’ and shying away from making hard decisions.
Council officers were asked to provide more information on many of the projects and how they could be prioritised.
Bridson said that was unfair on officers and it was up to councillors to make the hard decisions.
After the meeting, Wallace said he agreed with Bridson.
It was only the beginning of the annual plan process, however, and there was still plenty of room for manoeuvre.
Once the council had more information on some of the projects suggested by officers, it would be better placed to set priorities, he said.
The reality was that after years of tight financial management, the city desperately needed investment.
Debt was the best way to fund it and although a level of $235m seemed a lot as a percentage of the council’s income, it was manageable.
The draft plan will go out for public consultation.
Wallace said it was now up to the community to have its say.
Cr Chris Milne, who drove the change to a new strategy, said debt was the best way to fund growth.
Councillors had to be restrained, however, and not push debt beyond 150 per cent of revenue. .