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Property and water rates in Auckland City are forecast to soar by 37.3 per cent and 30 per cent respectively over the next three years if October's local body elections do not force changes of policies.
Mayor Dick Hubbard and the City Vision-Labour ticket must defend a term in which rates rose by 21.4 per cent and projections from council documents that they would rise 37.3 per cent more under current policy.
The opposition Citizens & Ratepayers and their unofficial mayoral candidate John Banks promise lower rates but are vague about how much and where big spending cuts would be made if they win control of the council.
A sweeping review of local government funding advised on Tuesday that rates were becoming increasingly unaffordable for many ratepayers and councils should restrain spending.
The inquiry into rates said Auckland councils needed to defer projects, borrow more and set higher user charges to soften the blow of significant rate rises in the next decade.
It found Aucklanders paid almost 40 per cent above the national average in rates. Auckland City's were 70 per cent above the average.
Mr Hubbard yesterday said he had no plans to cut or defer projects in his council's $1 billion spending programme over the next decade, but indicated the council would borrow more to reduce ratepayers' pain.
In his first term rates have risen 21.4 per cent overall and water bills 19.6 per cent. Residential rates are up 32.7 per cent and are forecast to soar 40.3 per cent in the next three years.
Mr Hubbard said the city was in catch-up mode for things like transport, stormwater and footpaths and had growth pressures to contend with.
When the council consulted ratepayers on its 10-year budget last year, people indicated what they wanted done from a mix of options, he said.
"If people want lower overall [rate] increases they will have to decide what comes out of that mix and match."
He said he got the impression ratepayers were comfortable when the council borrowed $23 million this year to reduce the overall rates increase from 8 per cent to 3.6 per cent. This was a first step in a 10-year, $1.3 billion borrowing programme.
The council could cut back on schemes affecting only local communities, such as a new swimming pool in Otahuhu. But he believed a pool was justified in a suburb with a tatty look in parts, street gangs and many residents who could not get to a beach.
Mr Banks and C&R managed to hold overall rates to the level of inflation during the 2001-2004 term, largely helped by selling pensioner housing and half the council's airport shares.
C&R yesterday released its manifesto, which promised to link rate increases to the council's audited rate of inflation. This is higher than the official rate of inflation because of expensive building, oil and other costs felt by the council. At one stage this year, officers estimated council inflation at 5.9 per cent, compared with the official rate of 2.1 per cent.
C&R finance spokesman Doug Armstrong said the council had to rein in spending and concentrate on the basics. The ticket would open the books and initiate a "value for money" evaluation of spending if it won office.
But when pressed on what major projects C&R would cut back on Mr Armstrong could only nominate savings to the $53 million repairs to the Civic carpark roof and $43 million of linked work upgrading Aotea Square.
Mr Banks, whose campaign slogan is "affordable progress", said the inquiry into rates was timely and he understood the message.
But apart from promising a line-by-line review of the 10-year plan, Mr Banks could not come up with any big savings. He was "deeply worried" about the liability to ratepayers from the leaky building issue.
Mr Banks, who reduced council debt to zero during his term, said he was not going to tick off $1.3 billion of borrowing over 10 years because it would make the council broke.
City Vision campaign leader Richard Northey said the 10-year plan had big rates increases over the next three years because funding was needed for a lot of big capital projects, including the 2011 Rugby World Cup. After 2010, the forecast rate increases were about 4 per cent a year.
City Vision would consider some of the rates inquiry recommendations.
