What services and amenities are you willing to do without?
It seems like the city council is everyone’s whipping boy at present. So, to rein in city rates, what do we cut? Across the country, local government is facing real affordability issues. The services councils provide are simply not being matched by their income — and that’s before looking at upgrades or investing in new infrastructure. This year, many councils are looking at double-digit percentage rate increases ranging from the low teens to the mid-20s. Without central government intervening to relax unnecessary and inhibiting legislation, or offer extra revenue or funding streams, the sector has little, if any, room to move.
In Palmerston North, the average rate of $2960 is in the middle of the range nationally, and in the lower quartile of the metros, with Auckland topping out on average at more than $4100 (including Watercare). Our 11.3 per cent rates increase proposed through our long-term plan (LTP) consultation puts us in the lower range.
This month we are asking our communities for feedback on the LTP and its associated budgets for the next decade.
No one wants to increase rates! But just as your household has had unavoidable cost increases, so has the council. These come from:
■ debt repayments 2.1 per cent
■ interest rate rises 4.2 per cent
■ labour costs and meeting market conditions 3.6 per cent
■ utilities and insurance 0.4 per cent
■ licence renewals 0.6 per cent
■ maintenance renewals 0.8 per cent
■ contractor/professional services 0.4 per cent.
That adds up to 11.3 per cent with the council able to raise that money only through rates, user charges and debt. Debt funds our capital programmes, which are multi-year and in some cases generational.
Debt spreads those costs so they don’t just fall on the ratepayers of the day.
Setting LTP priorities and trimming any fat has already taken place, so there isn’t much left in the system. To significantly alter rates, cuts will need to be made.
So, what services and amenities are you willing to do without? Should we close a branch library, cut swimming pool hours, reduce museum services, or stop some community grants? These will be the hard decisions that need to be made.
My challenge is this: if you believe the council can do better and is either living beyond its means or spending too much, please identify specifically where we can cut back.
Also, if you think we have got it right, tell us that too.
Remember, the council doesn’t run hospital services, the city buses, or look after river management.
I don’t think the reason the sector has affordability issues is because we are poor managers or building “vanity projects”, as some people claim.
I would say it’s often because central government mandates lumber local government with additional requirements and services with little or no connected funding.
The new freshwater legislation is an example of overreach, in my opinion. Here, we supply some of the country’s best drinking water but the new Government’s regulator has pushed some $50 million of extra infrastructure onto us at our aquifer bores for little community protection or benefit.
A decade or more ago, much of the council’s work was focused on roading, water, community facilities, parks and reserves.
Nowadays we provide far more people-orientated services — social housing, youth initiatives, safety and security programmes — all requiring multi-sector community funding.
In terms of value for money, I think the city council looks after its residents well.
While we provide more than some councils, with facilities like the airport, theatres, stadiums, aquatic centres and premier parks, the cost of living here remains relatively affordable while our amenities are equal to or better than some larger centres.
Councils provide more than 50 per cent of the public services we enjoy daily — yet they manage this with just 10 per cent of the combined national income from taxes and rates. It’s time local government had a more equitable share of that revenue.
This would go some way towards easing our rates burden.