Council blowout revealed in Whangarei

Whangarei ratepayers face an almost 100 per cent rates rise over the next 10 years with the council's debt set to soar by an extra $22 million this year.

The council budgeted to have a debt level of about $58 million by the end of the 2005/06 financial year.

But documents the council discussed behind closed doors last week show the debt is expected to soar to $80 million by the end of June and could rise to $142 million by 2011.

As a way of combating the escalating debt, the council is proposing rises over the next 10 years that will see general rates almost double.

The average rate in Whangarei is $764 per property but that would rise to $1283 by 2016 if the annual increases are implemented.

The council collects $28 million in rates a year, increasing to $51 million if the rates rises are implemented.

The council is also proposing to increase its "pan charge" from $244 for each toilet to $588 by 2016. The cost of metered water would rise from $1.33 per cubic metre to $2.05 over the same period.

The council is also looking at more than doubling development contributions for people building homes. Development costs average $14,069, including parks and reserves, roading, sewerage and water contributions, and could rise to $29,697 on average by 2016.

Outspoken district councillor Frank Newman has attacked the debt level as a major problem for ratepayers.

"This is a very serious issue and one that ratepayers will not be happy about. Ratepayers will be paying a big cost for the mistakes of the council," Mr Newman said.

A number of factors contributed to the budget blowout, he said, including the cost of the Re:Sort rubbish transfer station doubling from $3 million to $6 million, $3 million of extra property purchases and the council not selling $3 million worth of property as it had budgeted to do.

The council also had millions tied up in the failed Project Arrival scheme for the Blue Goose that would not make a return for another four or five years, Mr Newman said.

"Myself and Councillor (Crichton) Christie have been warning that this blowout was going to happen but we have been ignored," he said.

In 2001, when the council had a debt of $20.6 million, the council was 12th best among the 34 provincial district councils around the country with a debt per capita of $200.

By the end of June Whangarei will be 26th on the list with a debt per capita of $1133. Some local authorities have no debt, while Rodney District Council will be the most indebted provincial district council by June with debt per capita of $2100.

"About 60 per cent of our ratepayers are on fixed incomes and only get a cost of living increase of about 3 per cent a year. If we increase costs to them more than that we are hurting their quality of life," Mr Newman said.

"There are no boundaries for staff who are spending up ratepayers' money. Ratepayers won't stand for this."

He said the council needed to impose some fiscal discipline and cut spending on non-core services.

"But I don't think this council has the guts to do that and instead will rate its way out of this major problem," Mr Newman said.

Whangarei Mayor Pamela Peters' response to the debt forecast:

"Whangarei District Councillors, chief executive officer, staff members and I attended a workshop on February 2, to discuss capital works projects for the next 10 years, including debt levels for the next Long Term Council Community Plan which will be issued for consultation in April.

"Although with a very conservative debt profile, nationally and in comparison with other major cities, Whangarei is growing rapidly, with resultant pressure on its council to provide increased infrastructure and protection of its environment.

"There appears to be little point in having a low debt ratio per capita and at the same time inadequate infrastructure, and thus there is a possibility of debt rise above forecast due to increased need to meet infrastructure requirements. This is very dependent, however, on the timing and speed at which future projects are undertaken.

"Council constantly strives to create a balance between allowing and enabling our community to grow and providing that expanding community with adequate infrastructure and protection of its environment.

"As yet no decision has been made on this matter by council, but ratepayers are assured that the proper consultative process is being adhered to and any decision will be made in the fiscally responsible manner required of them."

- NORTHERN ADVOCATE (WHANGAREI)