ARC caught in hot seat

By ANNE BESTON

The first rumblings of the ratepayer revolt that would eventually shake Auckland Regional Council to its foundations were detectable about three months ago.

Selling the new Auckland Regional Council rates system to local councils, ARC chief executive Jo Brosnahan reported to her council in April that reaction "ranged from friendly to hostile".

Over the previous couple of months, councillors who trekked to some of the 300 or so meetings to explain the new rates reported a similar reaction.

While most councillors will now argue that the mood back then was one of gloomy acceptance, by the time the May annual plan hearings rolled around, those with reasonably good political antennae could sense things were about to turn pear-shaped.

Although the annual plan's 63 per cent hike in the transport budget, from $36.8 million to $58.7 million, was seen as a necessary evil both within and outside the council, some of the 592 people who made submissions and turned up to the plan hearings described the new rates that would pay for it as excessive and totally unacceptable.

A few demanded the council be disbanded forthwith. One who made the visit to the ARC's Pitt St offices to make his views clear was Glenfield Ratepayers and Residents Association president David Thornton.

"This was a huge step by an inexperienced council, but I went there and thought: these guys just aren't listening," he says.

Thornton has become a leading figure in the charge to try to force the ARC to take the radical step of re-setting the rate this year and says he won't give up until he has achieved that goal.

To understand the crisis the ARC finds itself in, it's necessary to go back a bit.

For decades Auckland's seven local district and city councils collected rates money on the ARC's behalf. Not known for acting out of the goodness of their hearts, the councils grumbled, believing the ARC rate was virtually hidden from ratepayers while they copped ratepayer fury head-on every time rates went up.

Late last year the councils got their wish when Parliament passed the Local Government and Local Government (Rating) Acts, decreeing that councils must adopt rating systems that were "transparent" and as simple as possible.

Transparency, the ARC decided, meant the regional council must send its own bill to its ratepayers, all 460,000 of them from Wellsford to Waiuku.

But it was nervous. Historically the council's profile with ratepayers was low. Now many would probably notice it for the first time.

Another problem the council faced was that it had to find a rating system for the whole region when local councils all had their own particular way of collecting rates.

It also had to find a way to pay for the rise in transport costs that would fairly spread the burden, and it would have to pay for the rates to be collected.

By last October, a series of informal "workshops" had been under way for some months, taking place behind closed doors.

At the October workshop, ARC finance director Tony Darby and his team supplied councillors with a raft of information including analysis of rating systems, the effect of differentials and the transport rate.

Staff demonstrated the pros and cons of capital versus land value rating systems at that workshop, telling councillors that land value "tends to favour lower to average value residential properties but rates were higher for rural, coastal and undeveloped inner-city properties".

The system would need differentials to even things out, they said. Capital value hit businesses and commercial property harder but would also have a "negative" effect on lower and average value properties.

Generally they advised that capital value was a simple, transparent system that would need fewer tools in the rating mix to even things out, just what the council was looking for under the new act.

But staff warned that when the Waitakere City Council had tried to introduce capital rating a few years back, residents had complained loudly, so the system "might be harder to sell to ratepayers".

After months of "modelling" the figures for councillors, the impact of rating this way or that, a key vote was taken at a special meeting on December 2.

What is interesting about that meeting is that only one councillor, Manukau-based farmer Bill Burrill, voted against capital value, yet the system being voted on was virtually the same as that which five councillors would turn against six months later, when the council adopted the new rating system by seven votes to five.

Burrill's beef was the decision not to impose a uniform annual general charge. Staff could find no justification for such a charge, which is levied against all households at the same rate regardless of property value.

Burrill, one of the most experienced regional councillors and long-time chairman of its parks and heritage committee, would eventually fall into line, but by May this year Paul Walbran, Sandra Coney, Brian Smith and Mike Lee had broken ranks, voting against the adoption of capital value, no differential and the way the transport rate was targeted. (Lee says he would also have voted against at the December meeting but wasn't there.)

Walbran says by May he had decided the figures presented by staff weren't telling the whole story. "It was a suicidal increase, but that didn't become clear until earlier this year," he says.

"It wasn't something that was kept from us. The case studies just didn't show the magnitude of the increases."

Like Walbran, Coney was opposed to doing away with any form of business differential whereby businesses are rated at double or more that of residents.

"It all came together during the annual plan process when it was noticeable that business groups were largely absent, obviously because they were mightily pleased with the outcome for them," Coney says.

Councillor Brian Smith, a wily and experienced local body politician with a strong following in his Rodney ward, was opposed on the same grounds but, more importantly, the decision to hit all Rodney residents with the same transport rate meant that if he hadn't voted against, he would have been "dog tucker".

"When it came to the ARC's decision to charge Rodney people across the board for the transport rate, I thought: forgive them, Lord, for they know not what they do."

He argued that the transport levy should be "stepped" - higher for people who had an adequate bus service, lower for those who didn't. He lost.

That looked to be the extent of the "noes" until the key annual plan vote on June 23. By then five of the seven councillors, Walbran, Lee, Coney, Smith and Craig Little, voted against.

Once Auckland City councillor and Chamber of Commerce chief Michael Barnett abstained, the 13-member council was saved the humiliation of not being able to adopt its own plan by just two votes.

Barnett had made a submission on the plan and was told that disqualified him from voting on it.

The big surprise at the June 23 meeting was Little, an experienced Auckland politician who stood for the ARC at the last election on the pro-business Advance Auckland ticket.

Seemingly without warning, he joined the rebel ranks.

He has since said he opposed the rates because his fellow councillors gave no thought "to the effect this would have on individuals".

But most believe Little saw the writing on the wall and, astutely, switched sides when he realised how unpopular the rates would be.

Not only had he voted consistently in favour of the rates up to then, at a special meeting on June 3 he seconded chairwoman Gwen Bull's motion to adopt them.

So seven votes carried the day, including those of Bull, deputy chairman Philip Sherry, councillors Ian Bradley, Dianne Glenn, Judith Bassett, Catherine Harland and Bill Burrill. Those councillors (except Burrill, who is on a two-week holiday) are now feeling the full force of ratepayer fury as residents are asked to pay regional rates increases of between 100 and 600 per cent.

Bull is described as having a "spine of steel" but is considered by many to lack the political skills to lead the council in what Lee describes as the "intense rivalry and poisonous relations" of Auckland's local body political climate.

But she has stoutly fought her corner, defending the new system to the hilt before finally conceding late this week that a full review would be needed next year.

While that may not be enough to save her job - Little and Barnett are widely rumoured to be planning a coup after the next election to install Little in the chair - everyone agrees there could be far more serious ramifications in all of this.

It's almost certain ARC councillors will now lack the authority to impose their planned 20 per cent rates rise next year.

"I think we may have to think about that and what we are going to do," says Bassett. The money for transport will have to come from somewhere.

Smith says if "someone with the right brand of snake oil" comes along and sells Aucklanders a way out of their rates woes, then most ARC councillors will be out on their ear come the next election.

But Auckland's transport problems are not going away.

"This would have to be the last gasp, if we get away with it, for passing transport costs on to archaic property laws," Smith says.

"Houses don't drive cars, motorists do, and if you went to the average motorist in Auckland and said, 'Listen, mate, would you give me $100 if I could get this congestion fixed?', they couldn't get their chequebooks out fast enough."

Since it was set up more than a decade ago, the ARC, like its fellow regional councils around the country, has struggled to get noticed by ratepayers who either didn't know it existed or had no idea what it did.

After a wet and cold July, that has all changed.

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